Amazon's FBA return policy is one of the many things that make the eCommerce giant so popular. This article answers some of the most common questions about the new Amazon return policy and describes how Amazon seller policy can affect businesses.
When dealing with returns and refunds, many companies are ill-prepared. This lack of preparation can damage a seller's reputation. Transparent return policies make things easier for buyers and sellers. However, with a simplistic Amazon FBA return policy comes the significant potential for return requests to be abused. Check out this article instead for information on Amazon FBA reimbursements.
Amazon FBA Return Policy
Amazon FBA returns policy offers fulfillment and customer service to customer orders. It also processes customer returns and determines whether purchased FBA products qualify for a return. The Amazon FBA returns policy process can go one of two ways.
When a product is sent back, Amazon classifies it as either sellable (original condition) or unsellable (damaged or defective). If the product is considered sellable, it gets sent back to inventory for resale. However, if the product is unsellable, Amazon assesses it to establish how it was damaged to determine if you qualify for reimbursement.
Much like standard return policies, customers have 30 days to return the product after receiving it. Nevertheless, there are exceptions to the rule. In some cases, Amazon may accept return requests after the 30-day cutoff point.
Amazon FBM Return Policy
The return policy for sellers who fulfill their orders themselves is slightly different from Amazon's FBA return policy. For instance, when a customer orders from a seller that fulfills and ships their own inventory, returns are sent back to the seller and not Amazon. To get a comprehensive understanding of an Amazon seller's turn policy, you should check out the "Returns and Refunds Policy" section of the seller's profile.
According to Amazon, FBM sellers' return policy should comply with Amazon's FBA return policy and are obligated to refund customers within two days of receiving the returned order. The core difference between the Amazon FBA return policy and the FBM return policy is damage control. For example, FBM sellers do not have the opportunity to remedy concerns pertaining to returned products the same way that FBA sellers do.
What Happens When the Product Is Returned to Amazon’s Warehouse?
Several things may happen to a product after it is returned to Amazon's warehouse:
- The item is thrown away
- The item is resold
- The item is placed on hold
- The item is sold via liquidation
More often than not, Amazon liquidates returned merchandise either by selling them on Amazon warehouse or to eCommerce liquidation sites.
What Happens if a Customer Does Not Return the Product?
According to the Amazon FBA return policy, if a customer does not return the product within 45 days of receiving it, Amazon will reimburse the seller and charge the customer again. However, this process does not apply if you are subject to a returnless refund.
Extended Returns Timeframe
In some cases, the timeframe for returns is extended. For instance, the Amazon FBA return policy enables customers to return unopened products from categories such as "Baby" within 90 days. In these cases, Amazon is responsible for paying the return shipping at no additional cost to the seller.
What if a Customer Returns a Damaged Product?
If a product is returned damaged, you should find out why the customer returned the product. If the customer does not indicate that the product was damaged, you can inform the customer that you are not obliged to refund them.
If the customer requests a return outside of the Amazon warehouse return policy, you do not have to honor that return. However, keep in mind that FBM sellers must match or exceed the demands of FBA sellers. This means you are under no obligation to refund if the product has been damaged due to customer negligence. In cases of disagreement, you may appeal disputes to Amazon.
In some cases, the Amazon FBA return policy allows you to charge the customer a restocking fee. Of course, those products returned in original condition and within Amazon’s 30-day timeframe cannot be charged a restocking fee.
Why Do Customers Return Products?
There are infinite reasons that customers return products. However, below are the seven most common:
- The product has not met the customer's expectations.
- The customer has changed their mind and does not want to wait for the product.
- The product arrived too late.
- The product is defective.
- The product does not match the product description or photo.
- 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 crucial to determine why the item was returned in the first place to deter the likelihood of additional returns on the same product. Such insights provide you with knowledge of everyday issues. Return surveys help you identify what your product lacks and how it compares to your competitors. Moreover, the only way to find out why a customer returned a product is to ask. By finding out what causes your customer to request refunds, you can handle future purchases with greater ease.
What Are Returnless Refunds?
A returnless refund is when a customer makes a refund request that is automatically approved. After this, the customer is advised not to return the item. In some cases, returnless refunds are economical; the return costs of the product are higher than the value of the product. This typically happens more with low-cost items. Product returns can be pretty expensive, so this part of the Amazon FBA return policy can help sellers save money in the long run.
Do Customers Abuse the Amazon FBA Return Policy?
You should not assume that customers take advantage of the return policy. If it falls under the Amazon FBA return policy, it is best to accept the return without arguing. Abuse can be a significant issue regarding returnless refunds and other aspects of the Amazon warehouse return policy. Regardless of what business you are a part of, you will always have someone trying to take advantage of you.
In some cases, customers threaten sellers by saying they will leave bad reviews if they are not issued a refund. For larger retailers, this is not a huge issue. However, smaller retailers might feel high pressure. Nevertheless, if you fall in the latter category, you have every right to contact Amazon if you experience reoccurring threats.
How Are You Affected by Amazon’s Return Policy?
Amazon is very customer-centric. As a result, the Amazon FBA return policy may benefit the customer more than it does the seller. This section outlines some of the advantages and disadvantages of the Amazon FBA return policy.
The Amazon FBA return policy allows you to prioritize. When return decisions are out of your hands, you can focus on more prominent areas of your business. These areas can include marketing, optimizing product listings, and managing inventory. Unfortunately, there is no profit in returns, so many businesses waste time arguing with the customer over this.
The Amazon FBA return policy helps you save money by charging a restocking fee. If Amazon does not claim ownership of any faults, you can charge a restocking fee. Whether you are an FBA seller or an individual seller, you can charge this fee.
A higher return rate can harm your seller rating. Amazon's system is incredibly customer-oriented, with a great deal of leeway in handling return shipping and addressing refunds in the customer's favor. However, this habit does not benefit sellers who offer items that do not match their product descriptions. It is essential to focus on quality offerings with clear and concise definitions of what your product is and does. That way, you can reduce your return rate.
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. Of course, that applies to any business, as you do not want to give anyone a "free meal" if you can help it. Proving fraud can be tricky with products that have gone through one or two uses only to be returned because they did not fit the bill. Due to the possibility that 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.
What Can Sellers Do to Protect Themselves From Amazon’s FBA Return Policy?
Return policies are extremely important to customers. On the other hand, sellers often struggle with them and are always looking to reduce them. Return policies might sometimes be problematic for both customers and retailers. Retailers need to consider other things, such as cost control and return factors, which impact the final pricing - but they also need to make sure the customers can return the item they do not want. To address problems with shady buyers and unsellable inventory, below are some tips that you can take.
Create High-Quality Product Listings: Creating high-quality product listings is an effective way to deter the likelihood of returns. For example, if a product listing is clear, straightforward, descriptive, and honest, the customer will know exactly what to expect. Reducing the element of surprise increases the chances of the customer keeping the product.
Know Your Rights: Your defense changes 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." There is no restocking fee if the buyer receives a damaged item (either from you or the shipping company).
Consider Insurance: One way to create unfulfillable inventory is to damage the product. Unless you do repairs, you will not be able to resell it. This situation can be problematic for expensive items when a smaller retailer cannot repair them. 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.
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's experience is to agree 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 to decide whether or not to issue the refund. FBM sellers who want to see their listing climb the ranks are further incentivized to provide refunds due to the potential threat of negative customer reviews. While Amazon does have a dispute process, playing damage control can be a massive waste of time.
This article covered the Amazon FBA return policy, answered common questions about returned Amazon products, and offered insights and tips on how to protect against Amazon return policies. It is the name of the game; selling on Amazon means abiding by its return policies. If you want to decrease the return rate of your products and simultaneously increase reviews and brand reputation, use an Amazon listing optimization tool. Such tools help you efficiently optimize your Amazon listing while assessing its compliance with product listing guidelines.
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