Good return policies are transparent make things easier for buyers, customer service, and sellers. But with a simplistic return policy comes the significant potential for return requests to be abused. With this in mind, how does the Amazon return policy for sellers affect businesses? Find out in this article.
1. Why Amazon Has Changed its Returns Policy
The Amazon return policy for sellers has gone through multiple updates. The latest changes address a consistent approach for all involved. Regardless of customers buying from third-party sellers or FBA sellers, the Amazon warehouse return policy tries to simplify things to provide clarity across the board.
Today, most items have a return window of 30 days of receipt. Provided that the products are in original condition, you receive a refund via whatever payment method you had at the sale time. If the items are in unsellable condition, the fulfillment center will kick them back to your return address.
If you return the product due to cancellation, Amazon will not refund your shipping costs unless they are clothing items.
How the Policy Covers Low-Cost Items
When it comes to the Amazon return policy for sellers, low-cost items have the most considerable effect. Why? Because of returnless refunds. We will address returnless refunds later in this article.
2. Amazon FBA Return Policy
The Amazon warehouse return policy delves into FBA sellers.
Items with a used internal memory (like a smartphone or digital camera) are often automatically unfulfillable, as you must clear the memory on the device.
Much like the standard return policy, the customer has 30 days to return it. In most cases, the item needs to be returned within 45 days (to account for potential delays in shipping).
When applying this to the Amazon Prime return policy, there is no difference. It is subject to the same 30-day return window, which focuses on quick solutions and reimbursement of return shipping.
The Amazon holiday return policy offers an extended period of returns from October to late January. This situation applies to all products bought during the holiday shopping season (before December 31st).
If the items are in good condition, you can hopefully add them back to your inventory. Otherwise, you may qualify for reimbursement on things that you cannot resell.
What Happens When the Item is Returned to Amazon's Warehouse?
Because Amazon likes to keep their FBA sellers happy, they have the following procedures:
- An Amazon warehouse worker can evaluate the condition of the returned item.
- If they are unsellable, they decide whether or not you qualify for reimbursement.
- You can choose whether or not you want it returned to you or the warehouse.
You might receive automatic reimbursement for items deemed to be a safety risk. These can include personal care products, consumables, and products with expiration dates.
For items you want returned to use, there is an LPN (license plate numbers) label you can use. However, this may not be available to those who use the standard manufacturer's barcode, as those are harder to track.
If the item is not deemed risky or is still in the same condition as you sent it, it placed in your inventory for resale. Depending on the situation, you may also receive credit from the customer for a restocking fee or a returns processing fee for clothing items. However, if Amazon takes ownership of the item's condition upon sending, you may not be able to reapply it to your inventory, and you will not receive any restocking fee.
What Happens if the Customer Does Not Return the Product?
If the customer does not return the item within the given 30-day time frame or you do not receive it within 45 days, it is as if there is no refund request. The customer will receive a charge for the item, and you will receive the credit.
If you are subject to a returnless refund, this process does not apply.
- Extended Returns Time Frame
Amazon automatically grants a 90-day return time to FBA baby items. Amazon provides this extended time because Baby items need additional time to test their usefulness and durability. Because baby products expect to last as long as the baby, they have higher standards.
3. Amazon FBM Return Policy
Outside of the Amazon Prime return policy (and Amazon warehouse return policy) comes the Fulfillment By Merchant (FBM) policy. While Amazon does leave this up to the interpretation of the FBM sellers, there is one significant rule to be aware of:
- Third-party sellers must meet Amazon's customer return policy of 30 days.
You don't have the option of creating your return policies unless it exceeds the current Amazon return policy for sellers. With this in mind, you can follow Amazon's FBA return policies, meaning you don't have to take back items that are in a different condition than you shipped them.
If the customer claims that the item has defects, the situation becomes complicated. In most cases, you might want to eat the cost associated with this, as having a long-drawn-out battle with prospective buyers might cause you significant issues down the line.
What If a Customer requests a Return Outside of Amazon's Return Policy or the Product is Returned Damaged?
If the customer requests a return outside of the Amazon warehouse return policy, you do not have to honor that return. If the product has damage, find out why the customer returned the product.
If the customer did not mention that there was damage to the product due to a defect, you could inform the customer that you will not be refunding it due to this issue.
Keep in mind that FBM sellers must match or exceed the demands of FBA sellers. This situation means you are under no obligation to refund if the product has damage due to customer negligence. In cases of disagreement, you may appeal disputes to Amazon.
What are the Reasons Customers Return Products?
There are infinite reasons that customers return products; below are the seven most common:
- The product has not met customer's expectations.
- The customer has changed their mind on wanting the product.
- Your product arrived late.
- There is a defect that comes with your product.
- The customer gifted it to someone who did not want or need the product (See Amazon holiday return policy).
- The customer no longer wants or needs the product.
- Your customer is confused by some aspect of the product.
It is not safe to assume your customers are taking advantage of the return policy. If it falls under the Amazon return policy, it is best to accept the return with no argument. However, this is your opportunity to learn more.
How to Find Out Why Customers are Returning Your Product?
Whether it be related to the Amazon holiday return policy or another critical element, a vital part of those returned items is the story behind them. Why? Because they provide you with knowledge of everyday issues.
Let's say that you sell hardware kits that take advantage of a car's battery power to provide energy. Due to having a returns survey when you get the product back, you find that your instructions are somewhat lacking than your competitor. By modifying your pamphlet, you find you can reduce the number of customers taking advantage of your 30-day return window.
You may find that your customer's issue is related to something else entirely. The point being, the only way to find out why customers return your product comes back to asking. Amazon will automatically handle this in the first place. By finding out what causes your customer to request refunds, you can take future purchases with greater ease.
In some cases, you won't get that opportunity.
4. What are Returnless Refunds?
A returnless refund is when a customer makes a refund request which is automatically approved. After this, the customer is informed not to return the item. That's because the return costs of the product are higher than the value of the product. As a result, this typically happens more with low-cost items.
A customer may have all the same reasons for refunding the item: it wasn't what they are expecting, it doesn't meet their needs, or they found a good substitute item. The point is that there is something with this item that makes it difficult to resell or not worth the hassle. In this case, the refund time is instantaneous, and there is no expectation of replacements to customers.
Product returns can also be pretty expensive, so this part of the Amazon return policy for sellers also has the potential to save money. If you have a product defect, returning hundreds of items can add up in cost. Sometimes, it is best to eat the materials cost and move on.
5. Do Customers Abuse Amazon's Return Policy?
Regarding returnless refunds and other aspects of the Amazon warehouse return policy, abuse can be a significant issue. Regardless of what business you are a part of, you will always have someone trying to take advantage of you. Customers will always try and abuse Amazon's return policy.
Given that Amazon is very customer-centric, you do see people threaten review bombing in some cases. If you don't provide them with what they want (typically a refund), they give you a one-star review. For larger retailers, this isn't a huge issue. However, smaller retailers might feel high pressure.
However, Amazon does protect its sellers with this knowledge in mind. Don't be afraid to contact Amazon for advice on the matter if you ever feel pressured.
6. How Are You Affected by Amazon's Return Policy?
Whether it be related to the Amazon prime return policy or FBM sellers, all can feel the impact of Amazon's return policy. Those impacts provide greater ease of use for handling returns but aren't always friendly to sellers on the platform.
Below are some of the advantages and disadvantages of this platform:
- The Amazon Return Policy Allows You to Focus on Important Areas
When return decisions are out of your hands, you can focus on other essential areas. These areas can include marketing, optimizing product listings, and managing inventory. There is no profit in returns, so many businesses waste time arguing with the customer over this.
- You Won't Have to Lose Money By Charging a Restocking Fee.
If Amazon doesn't claim ownership of any faults, you are allowed to charge a restocking fee. You can choose this fee whether you are an FBA seller or an individual seller. While it may burn a bit of time, it's understandable to charge the customer when they changed their mind.
- A Higher Return Rate Can Harm your Seller Rating
Amazon's system is incredibly customer-centric, with a great deal of leeway in handling return shipping and addressing refunds in the customer's favor often. However, this habit does not benefit sellers who offer items that don't match their product descriptions.
It is essential to focus on quality offerings with clear and concise definitions of what your product does. That way, you can reduce your return rate, which will negatively impact your ranking ability down the road.
- Proving Fraud Can Be Tricky
As a seller, you want to defend your product's quality. You maintain that defense by ensuring nobody takes advantage of you. That applies to any business, as you don't want to give anyone a "free meal" if you can help it.
But proving fraud can be kind of tricky with products that have gone through one or two uses, only be returned because they didn't fit the bill. Because there are so many potential places where the product might be damaged, you will have to prove beyond any certainty of doubt that the product is in worse condition than when you shipped it out. That can be tricky.
7. What Sellers Can Do?
To address problems with shady buyers and unsellable inventory, here are some tips that you can take as an individual seller and an FBA seller:
- Know Your Rights
Your defenses change based on the department you sell in. Selling electronic devices and video games is entirely different than selling T-shirts and cans of tuna.
Buyers are required to provide you with a restocking fee credit, depending on the inventory. For example, if the buyer changes their mind or has clothing in the wrong size, they need to pay you to put the item back "on the shelves."
If the buyer receives a damaged item (either from you or the shipping company), there is no restocking fee.
- Consider Insurance
One way to create unfulfillable inventory is through damage to the product. Unless you do repairs, you won't be able to resell it. This situation can be a problem for expensive items when you are a smaller retailer that can't repair your items.
If you sell a smaller amount of more expensive items, consider purchasing inland marine insurance that you can apply to items in transit. Check with a business insurance seller who will be able to provide it.
- See if You Can't Discover the Problem
Another common problem that ruins customer experience is the complication of usage. "Ease of Use" is a significant issue with many customers, which heightens your potential to return items. This issue can be more critical when applying the Amazon holiday return policy, as the buyer may not know what the "giftee" is looking for in whatever item they need.
By providing a willingness to assist, you can solve the problem and discourage a refund. Sometimes being a good company willing to help their customers can be enough to change their minds.
Those who pay for prime may have higher expectations, but the Amazon Prime return policy is no different from the regular.
- Be Willing to Process a Refund
Whether it be an unwanted gift that comes from the Amazon holiday return policy or another potential issue, an argument with your customers is something you want to avoid. The best thing you can do to improve the customer experience is by agreeing to provide a refund.
Provided that you are within the initial 30-day period, Amazon will take this decision out of your hands. But FBM sellers do have the potential to make their own decisions. In that case, it will be up to the individual seller whether to refund.
For FBM sellers who want to see their listing climb the ranks, they are further incentivized to provide refunds due to the potential of negative customer reviews. While Amazon does have a dispute process, playing damage control can be a massive waste of time.
8. Final Thoughts
When it comes to the Amazon Prime return policy, you need to receive the item back within 45 days if being returned. However, refunds can be instantaneous for qualified items on a returnless refund. The system is very customer-centric, but what can you expect from the most customer-centric company in the world?
For sellers who manage a large stock, the amount of information thrown at you from this can be pretty overwhelming. Those that lack the tools to manage it may find themselves losing the buy box and getting slammed by negative reviews. For both FBM and FBA sellers, this can be pretty overwhelming.
To address this issue, DataHawk offers Amazon product tracking that can assist you with conceptualizing strategy. You can also benchmark product detail changes, allowing you to see the potential of what that might do.
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