1. What is the RTO Assurance Program?
RTO (Return-to-origin) Assurance Program is a new offering from Meesho for a select set of sellers to help them manage their courier returns (RTO) better and cap the RTO% for the respective month.
2. How does the seller benefit from the RTO Assurance Program?
● Sellers will be informed of the maximum RTO % that they can have at the beginning of the month, giving them higher visibility on RTOs and enabling them to plan better
● Seller is protected against the uncertainty of incurring additional costs (packaging, labor, etc.,) on RTOs. Meesho will pay compensate for a monetary amount if RTOs exceed the capped RTO%
3. How does the RTO Assurance Program work?
● A seller would be informed of the capped RTO % (maximum RTO% up beyond which the compensation kicks in for the respective month), through email/WA
● The capped RTO % mentioned above will be the actual RTO % for the preceding month (running a 15th to 14th cycle. Eg: for the month of March, the capped RTO % will be the actual RTO % of orders shipped between 15th Jan and 14th Feb)
● In case RTO % for the current month exceeds the capped RTO %, Meesho will payout compensation at INR 20 per order on the incremental RTO orders (orders exceeding capped RTO%)
● In case RTO % for the current month is lower or equal to the capped RTO %, seller will have not be paid out any compensation under the RTO Assurance program
● For sellers whose RTO % for the previous month (running a 15th to 14th cycle) is less than 5%, RTO % will be capped based on their previous 3 month’s RTO % (during which they shipped at least 20 orders) or RTO % for the previous month (running a 15th to 14th cycle), whichever is higher. However, for sellers who have shipped less than 20 orders in the previous cycle (used for capping RTO % for the respective month) and have 0% RTOs in the same cycle, the capped RTO % will be fixed at platform average for the upcoming cycle. The same will be communicated to the seller and opt-out option will also be given post-communication.
(Refer to next page/scroll down for illustration)
Version dt. 21.07.2023
Illustration (assuming seller opts for the RTO assurance program)
| Case 1: Seller’s actual RTO % for the orders shipped in March > capped RTO % | |
| Seller’s RTO % for orders shipped between 15th Jan and 14th Feb | 20% |
| RTO % capped for Mar (based on actual RTO % between 15th Jan and 14th Feb) | 20% |
| Total orders shipped in Mar (assumed) | 1,000 |
| Total orders successfully delivered in Mar (assumed) | 700 |
| Sale revenue/order (assumed) | Rs. 200 |
| Total sale revenue for orders delivered in Mar (Rs.) | 700 x 200 = Rs. 1,40,000 |
| Fee charged for opting in the scheme (Rs.) | 1,40,000 x 1% = 1,400 |
| Seller’s actual RTO % for the orders shipped in Mar | 30% |
| Compensation under the program per additional RTO | Rs. 20 |
| Inflow to the seller (Rs.) | 10% x 1,000 x 20 = Rs. 2,000 |
| Net benefit if the seller opts for the scheme (Rs.): 2,000 – 1,400 = Rs. 600 | |
| Case 2: Seller’s actual RTO % for the orders shipped in March < capped RTO % | |
| Seller’s RTO % for orders shipped between 15th Jan and 14th Feb | 20% |
| RTO % capped for Mar (based on actual RTO % between 15th Jan and 14th Feb) | 20% |
| Total orders shipped in Mar (assumed) | 1,000 |
| Total orders successfully delivered in Mar (assumed) | 700 |
| Sale revenue/order (assumed) | Rs. 200 |
| Total sale revenue for orders delivered in Mar (Rs.) | 700 x 200 = Rs. 1,40,000 |
| Fee charged for opting in the scheme (Rs.) | 1,40,000 x 1% = 1,400 |
| Seller’s actual RTO % for the orders shipped in Mar | 10% |
| Compensation under the program per additional RTO | Rs. 20 |
| Inflow to the seller | NIL |
| Net cost if the seller opts for the scheme (Rs.): 1,400 | |
4. Do I have to incur any additional charge to participate in the program? You will be charged a nominal opt-in fee of 1% of sale revenue (as appearing in the seller panel) for the respective month to sign up for the RTO Program
Version dt. 21.07.2023
5. Will the opt-in fee be charged on the orders delivered in the last month on which RTO % is based?
No, the opt-in fee will be charged on the sale revenue (as shown above) for the current month for which scheme has been opted for
6. How can I opt-in to the program?
You can opt-in to the program by clicking here. You can opt-in to the program (if not already opted in) any time before the last date of the month preceding the respective month or such other time as may be communicated by Meesho. Eg: for the month of May, you can opt in before 30th April. Once opted in, the program will auto-renew itself every month unless explicitly opted out
7. Can I opt out of the program if I have signed up?
Yes, you can opt-out of the program by clicking here any time before the 29th of the month preceding the month for which you wish to opt-out or such other time as may be communicated by Meesho. Eg: for the month of May, you can opt out before 29th April. But once opted in, the program will auto-renew itself every month unless explicitly opted out
8. How will the payment of opt-in fee/compensation be settled?
● Collection of opt-in fee: Opt-in fee (as shown above) will be adjusted fortnightly from payments due for pending invoices
● Payment of compensation: Compensation (for RTO orders over and above the capped RTO %) will be paid to the seller as a lump sum in the middle of the following month. Eg: compensation for the month of May will be paid to the seller in the middle of June ● Opt-in fee will be exclusive of GST. GST will be charged separately on the opt-in fee
9. Is it applicable to customer returns as well?
No, the program is applicable only to courier returns
10. Is the RTO Assurance Program applicable to specific catalogs/categories? No, the program is applicable to all catalogs/categories and is at an account/seller level and not at a catalog level.
Version dt. 21.07.2023
11. Are we fixing the RTO% for all months?
No, RTO % cap will vary each month depending on the actual RTO% of the previous month’s 15th to 14th cycle
12. Will the opt-in fee be charged on the entire value of orders delivered or net value after deducting returns?
Opt-in fee will be charged on the entire value of orders delivered (excluding returns and RTO) for the respective month .
13. Is RTO Assurance Program the same as Returns Assurance Program that Meesho launched?
No, RTO Assurance program is aimed to solve for courier returns while Returns Assurance Program is a separate initiative aimed to solve for customer returns
14. Is there limit on the amount of compensation that a supplier can receive in a particular month?
A seller will be compensated maximum to the extent of 50% increase in RTO. For example, a seller’s capped RTO % for Jan’23 is 20% and they experience 45% RTO in Jan’23, then compensation will be paid on the incremental 10% RTOs (50% of the capped 20%). However, if a seller’s capped RTO % for Jan’23 is 20% and they experience 25% RTO in Jan’23, then compensation will be paid on the entire increment of 5% RTO orders
*RTO- Courier returns which go back to the sellers without the customer having raised a specific customer return request on Meesho portal
**Capped RTO%- Maximum RTO % in which assurance is provided
***Respective month- Month for which the seller has opted in for the scheme
Version dt. 21.07.2023
