Reduce E-commerce Refund Rates

Company Context

ShopLoop is a mid-market e-commerce marketplace with 12M monthly active users and a strong position in fashion, beauty, and home goods. The company earns revenue from take rates on completed orders and is under pressure to improve unit economics without hurting conversion.

Problem

Refund rate has risen from 8.5% to 9.8% over the last two quarters, driven mainly by fashion orders, delayed deliveries, and "item not as described" complaints. Leadership has set a goal to reduce refund rate by 10% this quarter, which means bringing it down to 8.8% or lower within 12 weeks. Customer support data suggests three major drivers: sizing mismatch, inaccurate product listings, and avoidable post-purchase cancellations.

A blanket policy change could reduce refunds quickly, but it risks damaging customer trust, seller satisfaction, and repeat purchase behavior. You need to identify where the biggest opportunities are and recommend a product approach that balances speed, impact, and user experience.

Deliverables

1. Define how you would diagnose the refund problem and segment it by user, category, and refund reason.
2. Identify the highest-priority user pain points and the jobs-to-be-done behind refund behavior.
3. Propose and prioritize product changes that could reduce refunds by 10% this quarter.
4. Define success metrics, guardrails, and how you would evaluate whether the solution worked.
5. Explain key trade-offs, including customer trust vs. refund prevention and short-term wins vs. longer-term fixes.

Constraints

• You have one quarter to show measurable impact.
• Engineering capacity is limited to one product squad (1 PM, 5 engineers, 1 designer, shared data analyst).
• Refund policy changes requiring legal review will take longer than 8 weeks.
• You cannot materially reduce customer support headcount or introduce high-friction checkout steps that are likely to hurt conversion by more than 1%.