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How Amazon’s Return Policy Impacts Sellers

It doesn’t matter if your business is new or established, processing customer returns is something all ecommerce businesses must do.

It can be frustrating and demoralising to receive a return request. This is not just a loss of money for you, it’s also a sign that your customer is unhappy with your product.

Ecommerce sellers face returns every day. There’s no need to panic about them. This article will discuss Amazon’s return policy and what it means for sellers. We’ll then show you how you can reduce your return rate to make customers happy.

Amazon FBA Returns Policy

Amazon fulfils customer orders through its fulfilment centre . When determining whether an item is eligible for return, Amazon uses its customer returns policy. You, the seller, have no control over whether or not a product can be returned, even if the defect is clearly the buyer’s fault.

Most customers are able to request returns within 30 calendar days of receiving their order. Amazon may accept returns after the 30-day period, but this is a case-by-case decision.

Amazon will email the seller if there is an exception to the rule and inform them that they have initiated a refund. They also deduct the cost from the seller’s account balance.

What happens if the item is returned back to Amazon?

Once Amazon has received the return from the customer, it will evaluate the condition of the product and determine whether it is saleable. Amazon will return the product to you if it was in good condition and not used.

Amazon will determine who caused damage to the item or if it is unsellable. This could be Amazon, fulfilment or customer. Amazon is responsible for any damage caused to the product. You will be reimbursed for returning the product.

Amazon will not pay you if the shipping carrier or customer caused damage to the product. The product will then be marked “unsellable”.

Sellers must file a removal order for any item that has been returned to the fulfilment centre as “Customer Damaged” or “Defective” within 30 days.

What happens to the product if the customer doesn’t return it?

If the customer fails to return the product within 45 days after receiving it, Amazon will refund the customer, if applicable, and reimburse the seller.

Amazon usually reimburses you within 45 days. In rare cases, Amazon may require you to open a support ticket to receive your reimbursement.

Extended returns

Amazon customers can return eligible FBA products in the Baby category within 90 days. No returns are allowed for products that have been opened, or used. Amazon will cover the cost of returning the product to the seller.

Amazon FBM Return Policy

FBA does not offer returns for sellers who fulfil their own orders. Amazon has stated in their seller-fulfilled returns policy, that FBM sellers must comply with or exceed Amazon’s return policy. This means that you must accept returns within the 30-day return window of Amazon.

All returns must be sent to the seller account address and not Amazon. Within 2 days after receiving the returned shipment, you must refund the customer.

You will automatically be enrolled in the Amazon Prepaid returns label program if you are a professional seller . If a customer asks for a return, and the request falls within the acceptable time frame, Amazon will automatically send the customer a prepaid return shipping label through Buy Shipping Services. This program is only available to sellers who opt in.

Amazon will manually review any returns requests that exceed the terms of the return policy or are exempt from it.

What does this mean to FBM sellers? This means that the seller will not have the opportunity to contact the buyer in order to resolve the problem before the customer is automatically reimbursed.

What happens if a customer asks for a return that is not within Amazon’s return policy?

Amazon may allow sellers to charge customers a return fee in certain circumstances.

The restocking fee, which is a percentage off the item’s cost (shipping not included), and depends on the condition.

You may charge the customer a fee if you, the seller, accept a return after the 30-day period.

Restocking fees cannot be applied to items returned in their original condition and within the timeframe set by Amazon.

Below is a list of return requests that are eligible for restocking fees.

Return RequestRestocking Fee
A buyer decides to change their mind* and returns the item in its original condition within the return window.There is no restocking fee
A buyer decides to change their mind and returns the item in its original condition, if possible outside the return windowYes. Yes.
Due to any visible damage caused by shipping or carrier, the buyer may refuse delivery.There is no restocking fee. If they have purchased insurance, the seller will pay for return shipping.
The buyer will receive a damaged or used item.There is no restocking fee. If they have purchased insurance, the seller can file a claim against the carrier.
A buyer decides to change their mind and returns non-media items within the time frame. However, the seller is notified that the item has been damaged or in a material different condition than it was when it was shipped.Yes. Yes.
The buyer returns the book with no obvious signs of wear within the return window.Yes. Yes.
The buyer returns the CD, DVD or VHS tape within the return window.Yes. Yes.
The buyer decides to change their mind and returns any open software or games.Yes. Yes.
A buyer returns an item that is materially different to what they ordered.There is no restocking fee
Any other reason that is not listed here.See Refunds.

Why do customers return products?

Amazon customers must specify the reason they wish to return an order. This will establish who is responsible for returning shipping costs – the customer or the seller.

Amazon lists 72 reasons that customers can return their product . Customers are generally responsible for returning products due to their preference, incorrect size or change of mind. If the customer mentions damage or functionality, such as “damaged due to poor packing” or “missing parts and accessories”, sellers are considered responsible.

These are other reasons customers mention in the return process. Amazon is responsible for each.

  • “Arrived too late” seller
  • Seller: “Not satisfied with quality”
  • Customer: “Better price is possible”
  • Customer: “I didn’t like colour.”

Why customers return your product

As a business owner, you should expect some returns. You should keep track of reasons customers return your products. You should be aware of any problems or recurring issues your products might have, especially if you are selling private label products.

Amazon can temporarily suspend your listing if you get a lot of complaints about your product.

If you sell a bike helmet and customers complain about the fit or size of the helmet, Amazon may suspend your listing, if not your entire seller account.

You need to figure out why your product is getting flooded with negative comments. You can request a removal order to return unsellable inventory so that you can inspect every unit.

You can view your Policy Compliance section in Seller Central to find out why customers return their products. Let me show you.

We’ll go to Seller Central and click on “Performance”, then “Account Health.” From there, we will be able to view “Policy Compliance.”

My Account Health Rating appears to be in the green, which is awesome!

Wait, there’s more! We can now see the complaint under “Product Condition Customer Complaints”.

We can now see that the reason was for a defective product. Amazon also took the necessary action to remove the listing.

You must click “Appeal” to have your listing restored. Then, submit a plan to Amazon. You will need to tell Amazon about the problem and what steps you took to resolve it.

A little detective work can help you determine the reason behind every return that was requested.

Go to Seller Central and click on the “Reports”, then “Fulfilment”.

Click on the left-hand side to access “Customer Concessions” and then click “FBA customer returns.”

You can generate a report showing you all FBA customer returns for a specific date. The Order ID, Merchant SKUs, ASIN, FNSKUs, Title, Quantity and Disposition of each return will be displayed.

Pay close attention to the Status, Customer Return Reason, Disposition columns. Customers may leave a note under Customer Return Reason describing what is wrong or missing from their order.

You should keep track of all returns to ensure you catch any issues before your listing goes down or customers leave negative reviews.

No Returns

Amazon’s Returnless Rebates policy was first introduced in 2017. However, sellers are still outraged by the fact that customers can keep certain products while still receiving a refund.

Amazon will do this if the value of the product is low, the return cost of shipping to Amazon is too high or the product is difficult to resell after it has been returned. Although we don’t know where Amazon decides to set its price threshold, we do know that Amazon takes a lot of time and money to process returns. It may not be cost-effective in some cases.

Sellers often find it easier to simply refund customers without having to deal with returning the item. This is especially true if the product was damaged or defective in transit. Amazon automatically refunded the customer without seller approval is the real problem for sellers.

FBM Sellers have the option to set Returnless Refund rules for their seller accounts. This can be done under “Return Settings”, in Seller Central. You can also set the price range, product type, reason, return window, and return window.

Are customers abusing Amazon’s return policy for products?

Amazon is known for doing everything possible to please customers. Amazon offers a generous return policy that allows customers to return any item they buy for any reason within 30 business days.

You will encounter customers who abuse your policy and want a refund for almost every purchase.

Amazon recognizes this behaviour and will ban customers from shopping at the site if they find any abuse of their return policy.

What should you do with your returns

Amazon offers several programs to help sellers recoup money or find new homes for damaged or returned items.

FBA Liquidations

The FBA liquidations program was created to assist sellers in liquidating excess inventory and customer returns, rather than having it destroyed. It also helps to avoid additional storage fees.

It works like this: Submit a Seller Central liquidation request and Amazon will review several factors to determine your average selling price. Wholesale liquidators will typically pay between 5% and 10% of the average selling price for your product. Amazon will pay you within 60-days after your inventory has been purchased by a liquidator.

This program allows you to recover money from surplus inventory, rather than paying Amazon to return the inventory or destroy it.

Resell and FBA Grade

The FBA grade and Resell program allows sellers the ability to relist unfulfilled inventory and sell it as used items instead of having Amazon destroy or return it.

It works like this: Submit your unfulfilled inventory to the program. Amazon will evaluate the condition of the item and give you a grade. After your product(s)have been graded by Amazon, Amazon will create a brand new listing.

This program is not about creating more waste or destroying unfulfillable stock, but rather helping sellers to recoup any potential losses from returning items.

FBA donations

You can also donate your overstock or returned items through Amazon’s FBA donations program. This program allows sellers of eligible inventory to donate to certain US charities.

This eco-friendly option gives your products a new purpose and saves the environment. Amazon has partnered Good360 in order to distribute FBA inventory donated by Amazon across a network of nonprofits in the US.

This program offers sellers a unique way to reduce waste and get rid of unnecessary inventory. They can also donate goods to those in need. This program may also provide tax benefits to sellers.

How is Amazon’s return policy affecting you?

You must follow Amazon’s rules if you wish to sell on Amazon.

We’ve already mentioned that returns are an important part of any ecommerce or Amazon business.

You can reduce your return count by creating high-quality products and listing optimizations that include as much information as possible.

Are you still unsure about Amazon’s return policy or have questions? Leave us a comment below!


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