Coupang's delivery vehicles are parked in front of the company's logistic center in Seoul in March, 2021. Yonhap

By Kim Jae-heun

Coupang has decided to change its refund policy, which lets customers return any product they bought within 30 days of purchase without any conditions. The e-commerce giant said Sunday it expects the new measure will weed out troublesome customers and reduce snowballing losses as a result.

Until now, Coupang has allowed customers who ask for refunds on purchased products even after they've been used, because the return policy helped the e-commerce firm attract a large number of paid-membership users.

However, concerns have been growing over an increasing number of people abusing Coupang's refund system.

In one case, a consumer was caught returning an Apple laptop after using it for 20 days last year, but Coupang took it back without asking any questions.

To prevent the same incident from happening again, the online retailer posted a notice online that it will no longer take back items starting Sunday whose packaging has been damaged or price tag has been removed.

"We adopted the same policy before, but we have posted the notice to emphasize it," a Coupang official said. "We are trying to give a clear message to our customers about our refund policy."

According to Coupang's recent post, customers have to submit a prescribed document from a dermatologist when returning a used cosmetic product. Electronic devices that have been turned on at least once cannot be returned either. Apparels or accessories without their price tags are also not eligible for refunds.

This is likely to help Coupang cut its accumulating losses at the same time as most e-commerce firms here are showing refund rates of 20 to 30 percent. Coupang has been paying for all of the costs of refunds until now.

Last year, Coupang achieved record-high sales of 22 trillion won ($1.77 billion), but also suffered its highest-ever net loss of 1.86 trillion won. As a result, improving the company's profitability has become the top priority.

"Coupang has been put under pressure to cut accumulating losses. Raising the fee for its membership program and changing its refund policy are part of its efforts to reduce operating losses," an industry official said.