Have you ever had someone return a product they purchased from your store? If you have, you can relate to the barrage of emotions that show up as a result. Not to worry, you aren’t the only one who has felt this way. Statistics show that at least 30% of online purchases are returned. Some customers shop on Amazon because the return policy is one of the easiest. So, if you sell on Amazon you’re likely to get some return requests. These return requests are the last thing any seller wants to see. You not only lose a sale on every return, but it also means you lost a customer.
Managing returns is frustrating and your business can suffer if you have too many. The policy is flexible enough to attract buyers. It is important that you understand how it works. So how does the policy work and where does it leave you? In this post, you will tell you all about Amazon’s return policy and how it works. We’ll also show you how to reduce your rates in 2023.
Amazon Return Policy For FBA Sellers
Fulfillment by Amazon (Amazon FBA) offers so many benefits. Under this service, Amazon handles major business processes on behalf of its sellers. Returns management is one of the processes that Amazon undertakes for FBA sellers.
The policy determines which products are eligible for returns. Usually, sellers have no say in deciding whether a product is eligible for return or not. Even in cases where the issue is from the buyer, only Amazon can make a final decision.
The policy states that customers can only return products within a 30-day window. Sometimes, though, AMZ extends this timeframe depending on the issue.
What Happens When An Item Is Successfully Returned To AMZ’s Warehouse?
Upon return to Amazon’s warehouse, the item undergoes a series of checks. First, AMZ will confirm if the product is in bad shape or is still sellable. If the latter is the case, the item will be relisted in your inventory and added to new orders. Unsellable items will be completely removed from your inventory.
Afterward, AMZ will determine when the damage occurred. If Amazon caused the damage, you will receive a refund for the cost of the return.
For damages caused by customers or shipping companies, AMZ will not reimburse you. Rather, the item will be tagged unsellable. Sellers must then file a removal order for unsellable items. This must be done within 30 days after the item’s return.
What Happens If A Customer Makes A Return Request But Does Not Return The Item
The return policy allows customers to return items within 30 days after purchase. If a customer fails to return an item within 45 days after delivery, AMZ will charge them for the cost again. The seller receives a reimbursement once the process is complete.
Sellers’ reimbursement usually takes place within the 45-day window. You may have to open a support case if it doesn’t come through within this timeframe.
For holiday seasons, there’s an extended return window. Items bought between October 1st to December 31st can be returned until January 31st.
Are there any products that are not eligible for returns under FBA?
Not all items are eligible for returns. The following are not eligible for returns under FBA.
- Computers, laptops, desktops, and kindles. These items become ineligible once the 30-day window closes.
- Items tagged flammable or hazardous are ineligible for returns. Buyers who want to return such items will have to reach out to manufacturers for more details.
- Products without serial numbers or UPCs
- Downloadable software products
- Online subscriptions that have been activated
- Gift cards (except as required by law)
- Prepaid game cards (World of Warcraft, Xbox 360 Live, Wii Points, etc.)
- Certain jewelry items
- Selected health and personal care orders
- Grocery items
- Open software
- Items with special shipping restrictions
- Live insects
Learn more about items that cannot be returned to Amazon
New and unopened items in the baby category remain eligible for returns within 90 days under FBA. If opened or used, such items are ineligible in this timeframe. In the case that this happens, AMZ will fund the return shipping at no extra cost to the seller.
Amazon Return Policy For FBM Sellers
Returns work differently under FBM. Still, there are some similarities to the process. For instance, FBM sellers can only accept returns within the stated 30-day window. Also, returns under FBM go directly to the seller’s address, not Amazon’s warehouse. Sellers are to process refunds within 2 days after receiving the returned item.
Professional sellers automatically take part in the Amazon Prepaid Returns Label Program. In contrast, Individual sellers will have to sign up for it. Upon request of a return, AMZ will send a return shipping label to customers for sellers in the program. In some cases, AMZ will send the return request to sellers for review.
Where does this leave FBM sellers? The return process for FBM sellers is mostly automated. So, it is almost impossible for sellers to salvage the situation AMZ issues a refund.
Related: Choosing an Amazon selling plan
How Do You Handle A Return Request That Falls Outside Of The Policy?
Sometimes, AMZ allows sellers to charge customers a restocking fee for returned items. This fee is a percentage of the product’s price (without shipping costs). It is often determined by the condition of the product upon return.
Sellers who decide to accept them after 30 days are free to charge a restocking fee. The fee also applies if the item has been used or is unsellable upon return to the seller. The fee does not apply to items returned within the fixed timeframe and in good condition.
Here are a few situations and how the restocking fee applies to each of them.
|Return Request||Restocking Fee|
|Buyers change their mind about the order and return it in good condition within 30 days||No restocking fee.|
|Buyers change their mind about the order and return it in good condition after 30 days||Sellers can charge a restocking fee up to 20% of the item’s price.|
|Buyer rejects shipment upon delivery due to damage during shipping.||No restocking fee. Sellers bear the cost of return shipping, but those who have insurance can file a claim.|
|Used or damaged items are delivered to the buyer.||No restocking fee. Sellers bear the cost of return shipping, but those who have insurance can file a claim.|
|Buyer changes their mind about a non-media item and returns the item within the return window. The seller received the item in damaged condition.||Restocking fee applies, up to 50% of the item’s price.|
|Books returned within 30 days with obvious signs of use||Restocking fee applies, up to 50% of the item’s price.|
|Buyer returns media item within 30 days but with obvious signs of use.||Restocking fee applies, up to 50% of the item’s price.|
|Buyer changes their mind about software or game purchase. Then returns it within 30 days but it has been opened or unwrapped.||Restocking fee applies, up to 100% of the item’s price.|
|Buyer returns an item because it doesn’t look like what they ordered or is materially different||No restocking fee.|
Why Do Customers Return Products?
There are so many reasons why a buyer may choose to return an item, so it’s almost impossible to list all the reasons.
Statistics show that:
- 22% of buyers make returns because the product delivered doesn’t look like what they ordered.
- 23% return because they received damaged goods.
- 23% return because they received the wrong product
These are the most common reasons for returns, but there are several others.
When buyers make a return request, they must provide a reason for the return. This will help Amazon to decide who bears the cost of the return shipping.
Customers are responsible for preference changes, ordering the wrong size, and indecision. What if the return was because they wanted another color or got a better bargain? AMZ still holds them responsible. Sellers are responsible for reasons that border on functionality or wrong delivery. For late deliveries and bad product quality, sellers bear the return cost.
How To Find Out Why Buyers Are Returning Your Products
Returns are normal and they are to be expected. But if you notice an increase in your return rate, you would want to find out why that is happening. You should keep track of your returns, especially if you’re building a private label brand.
Returns are a sign of customer dissatisfaction and if you do not pay attention, you may get tons of bad reviews. If your returns are a result of product issues, you may lose your listings or account temporarily. So, be sure to track your returns and the reasons for them so that you can fix the issues quickly.
One way to do this is to file a removal order for unsellable inventory and have them sent back to you for inspection. The other way is to view the policy compliance section on your seller central dashboard.
Here’s how to go about the second method.
- Go to your seller central dashboard. Click on the Performance tab, then navigate to “Account Health”.
- Under policy compliance, scroll to “product condition customer complaints”. In this section, you will be able to view the customer’s reason for making a return.
If you want to see all returns within a certain time range, you will have to go further.
- First, go to seller central and click on the “Reports tab” then click on Fulfillment.
- On the left side of your screen, click “Customer concessions”. Under this section, click on “FBA customer returns”.
These steps will help you generate a report that shows all returns for the specified period. There are several columns in this report and they are all important. But you should take note of the disposition, status, and reason columns. The customer return reason column shows the exact reason for their returns.
Amazon Return Policy: Return less Refunds
With the returnless refunds policy, customers keep defective items and still get refunds. The policy has been in place since 2017, but not every seller understands how it works. So when does this policy apply?
AMZ uses this policy when the cost of the product is low or the cost of return shipping is too high. They also use this policy for products that may be hard to resell afterwards. Anyone can tell that processing refunds and returns can be overwhelming and expensive. In some cases, refunding buyers without the hectic return process is best. The policy is great for products in this category.
Sellers are often uncomfortable with AMZ’s automatic refund process. FBA sellers cannot put measures in place against returnless refunds. In contrast, FBM sellers can. The FBM Seller Central has a section called “Return Settings”. In this section, sellers can set rules for Returnless Refunds. The price range, reason, and return window can all be set here.
Do Customers Abuse The Amazon Return Policy?
The policy is very flexible, it’s a major reason for the platform’s popularity. As expected, some customers take advantage of this policy unnecessarily. So, AMZ has measures in place to detect policy abuse. To curb the act, customers who abuse the policy are banned from shopping on the site.
What Should You Do With Your Refunds?
AMZ is customer-centric, but not at the expense of its sellers. They offer a few programs to help reduce losses related to order returns. These programs help sellers to recover some money by reselling returned items. Here are a few of them.
On this program, sellers can liquidate the excess inventory and customer returns. This way, they won’t have to incur extra costs to have the inventory destroyed. This way, sellers can also avoid incurring extra storage fees.
When you submit a liquidation request, AMZ will determine the average selling price of your products. A wholesale liquidator typically pays 5% to 10% of the average selling price. When a liquidator buys out your products, AMZ will pay you within a 60-day window.
FBA Grade and Resell
Here, sellers can relist returned inventory as used items instead of destroying them.
All you have to do is submit your returned inventory into the program. Afterward, AMZ will examine the product, then grade it for you. Graded products are classified under any of the following categories:
- Used – Like New
- Used – Very Good
- Used – Acceptable.
After grading items under these categories, AMZ will create new listings for them. With this program, sellers can make some money back by reselling returned goods.
With this program, sellers can donate returned items to verified charity organizations. Thus making it possible to get rid of unsold inventory without destroying them, while still giving to people in need. You may even get some tax benefits if you use this program.
What Fees Do I Incur For Customer Returns As An FBA Seller?
You incur a return processing fee on some items. For instance, you pay a return processing fee on products in the Apparel and Shoe category. This is because these items come with a free return incentive.
Check out a breakdown of AMZ’s Return Processing Fees
Conclusion: Where Does The Amazon Return Policy Leave Sellers?
No matter how much you dislike Amazon’s policies, you have to follow them if you want to sell on AMZ. Getting returns is not unusual, but when it becomes too much, you just may be doing something wrong.
To reduce your return rate, sell high-quality products that are true to what your listings say. Focus on what you can control and fix return issues that are from your end.