Amazon Return Policy: How Should Sellers Handle Returns?

Most people adore online shopping, especially using discounts and sales. The problem is, sometimes what they order isn’t exactly what they thought it would be, and sometimes they just want their money back.

It can be hard to tell the difference. Whatever it may be, buyers rely on a return policy to protect their interests.

If customers are requesting reimbursements after shopping with Amazon, the buyers may get nervous, especially if they’re not completely familiar with the return process.

How can buyers and sellers avoid being cheated out of their sales? It is important how to set up the return policy and handle customer returns.

Let’s read on!

An Overview of This Article

Nuts and Bolts of Amazon Seller Return Policy
How Returns Affect Seller Performance Metrics?
Return Policies for FBA & FBM Sellers
How Do Sellers Handle Customer Returns?
How to Avoid Customer Returns?
Conclusion

Nuts and Bolts of Amazon Seller Return Policy

Fulfillment by Amazon (FBA) is the company’s way of introducing its own set of rules for returns.

In fact, it is an extensive set of rules by some standards. But to make sure you’re abiding by those rules, and customers are treated fairly, all parties must understand the fine details.

After all, Amazon does desire customer and merchant fulfillment alike.

Amazon offers a few distinct ways to satisfy customers. For buyers, this takes the pressure off their fear of losing large amounts of money.

It also keeps the customer happy so they will be those return customers every merchant wants and needs.

Refunds Without Return

A refund by Amazon means a credit to the customer for a paid returned or unreturned product.

There’s one condition in this refund clause – not all items that are refundable can be returned.

Hazardous materials
Grocery products
Healthcare items
Personal care items
Some electronics, 30 days old
Products missing serial numbers
Products missing UPCs
Downloadable software
Gift cards
Prepaid game cards
Some jewelry
Live insects
Items with shipping restrictions
Accessed online subscriptions
Open software

*Keep in mind, Amazon does not process refunds on purchases from a third-party seller. The return policy will be left to the discretion of the original merchant of the product. However, if a product is damaged, Amazon can refund purchases from third-party sellers directly.

Refund for Returns

Although similar to refunds, returns are examined in a slightly different way.

Amazon, upon return of the product, will determine if any damage was done by the customer, Amazon employees, or during shipping.

Usually, returns are in the case of a damaged product, after all. This is how reimbursement is decided.

If the product isn’t damaged, Amazon puts the product up for re-sale. These are indicators that a product cannot be re-sold.

Items that may pose a safety risk to associates or merchants such as, hazardous products, health and beauty items which are expired, and consumables.
Items returned in a different condition than when they were originally sold to the customer.
Highly defective or damaged products
Items that are open and lacking proper labeling.
Prohibited or unsuitable items

*If any electronic device has been used, the memory must be cleared before return.

If you request products that have been returned to Amazon central, you can use the barcode or use the LPN label to use the FBA customer returns report.

Merchants can also request all damaged or defective products to be disposed of, but this must be done within 30 days.

Customers have 30 days to return unwanted items.

After 45 days, the customer can be charged, and the merchant account will be credited.

There are two other exceptions:

*Baby items have a window of 90 days return

*Items that are purchased in November and December have until January to be disputed.

Refund for Shipping Lost

If items are stolen or lost, sellers can be reimbursed for the refund given to the customer.

This occurs because Amazon holds itself responsible for the damage of theft.

Additional Fees

A restocking fee is charged to the customer if the product has been opened. The merchant can be charged a re-processing fee if certain items are returned.

These items include, but are not limited to, apparel, luggage, jewelry and so on.

Replacements

Amazon holds the right to send replacements to the customer directly from the merchants’ inventory.

What you need to know

Customers, when requesting a replacement, must return the items
Replacements do not come with a charge or a credit
The original sales of the product are unaffected
Customers cannot receive a replacement if there are no other identical items in the merchant’s inventory.

Stipulations

If an item that is requested for a refund is not returned to the Amazon fulfillment center within 45 days, the merchant still receives reimbursement.
If the item is returned on time, the condition will be determined by Amazon
If the item is returned in good condition, it will be added back to the merchant’s inventory. If the product is damaged, Amazon will determine who is responsible. If Amazon is responsible, the product will be disposed of, and the merchant will receive the reimbursement.
Amazon is not responsible for damage done by customers and will not reimburse the merchant. The items will be added to the seller’s unfulfillable inventory.

*Amazon is not responsible for unreturned items and cannot reimburse their value

*Amazon does not reimburse merchants for refunds given directly from seller to customer.

So, what are the effects of all this?

No matter the situation, sellers do have to accept the returns from customers. For one, it’s policy.

Also, all merchants want to attain a positive reputation at all times to experience growth in sales.

Thus, whatever the problem may be, working with Amazon and using the right policy will provide future benefits for the seller.

How Returns Affect Seller Performance Metrics?

The merchant isn’t only concerned with profits. That would show greed and destroy the company.

Performance metrics include how buyers are treated, the efficiency of the company, productivity, quality, and other factors.

Most importantly, it includes customer satisfaction.

Returns affect these metrics, as some interactions between the customer and the company aren’t dried and cut.

Too many returns can hinder growth, even causing damage to sellers’ business on Amazon.

These are how returns affect seller’s stores：

Return Costs – If an item is being returned to Amazon, even if it still can be stored and resold, Amazon still charges a commission of 20% and shipping fees for the returned order. If a returned item cannot be resold, you will be costed more than a commission of 20%, shipping fees, and disposal fees.

Store Performance – Too many returns will increase the seller’s performance indicators in the Order Defect Rate (ODR). Amazon requires ODR should be less than 1%, otherwise, you will be restricted to sell on Amazon or your sale privilege will be completely removed.

Negative Reviews – Generally speaking, the reason why buyers request a return is dissatisfaction with the product itself. If it is indeed a product quality problem, you will receive negative reviews, which will harm your listing rankings, sales, and brand image.

Return is not always a bad thing.

Sellers can learn to see things from another’s perspective and think about the positive impact it brings, and learn lessons.

Learn more about the problems with your products from customers’ feedback and improve them better.
Analyze which process is wrong, optimize the supply chain, product quality, and improve your store’s operating strategies.
If necessary, you can try to discard the product that has a high return rate and re-choose new profitable products.

Return Policies for FBA & FBM Sellers

Sellers have two options, Fulfillment by Amazon, or Fulfillment by Merchant, which is themselves, obviously.

There are different policies for each.

FBA policies

When products are being fulfilled by Amazon, packages have different shipping costs.

There are also requirements on shipping to Amazon fulfillment centers, meaning certain requirements must be met for Labels, inventory, and shipping containers.

When using Amazon to ship purchases, a merchant is smart to understand the category or tier the item will fall under.

This includes whether the package will be charged by weight or dimension.

If this is the option used by sellers, it’s important to stay current. Amazon changes these charges on a regular basis.

On June 15, 2020, Amazon released a new return policy – Prepaid Returns Label. All professional sellers will automatically be enrolled in this program.

With the Prepaid Returns Label program, Amazon automatically authorizes all returns that fall within its return policy, and will provide customers with prepaid shipping labels on sellers’ behalf.

That means, the return process will be easier for buyers. But. it does have some flaws for sellers.

For any reason, buyers can easily return any items to Amazon and get a refund, and sellers have to bear all the costs.

But, there is still a chance that under Amazon’s control, you are more likely to be reimbursed for damaged or lost items.

FBM policies

The merchant has more control over the overall company when selling on Amazon.

However, Amazon holds the right to either accept or deny a product for selling on its platform.

While customers request for a return, it will need FBM sellers’ approval. Sellers will provide a shipping label or a delivery address.

Upon receiving buyers’ returned items, sellers will need to manually refund the orders on their accounts.

Regarding the shipping fees, it depends on different situations. If the shipping fees are too high, the seller may choose to refund the buyers directly without returns.

For overseas sellers, they can rent a location as a return warehouse, which will save time and shipping fees to receive the returned goods.

Warranty Periods on Products

Amazon does adhere to product warranty when considering returns and the reason for returns.

As warranties vary from product to product, Amazon is bound to replace the product at no expense to the customer.

Now, when it comes to whether you sell as FBA or FBM, the returns on the warranties process vary.

If you are fulfilled by Amazon, then you pay them to deal with warranty and return issues.

If you fulfill orders as the seller, then you deal with all warranty issues.

Most warranties on electronics are one or two-year warranties.

So, the customer has plenty of time to notice any severe issues with the product.

There may be a few slight differences in warranty periods, for example, a firestick has a 90 limited warranty, and so does other earlier generations of firebrand electronics.

What Is Restocking Fee?

There are certain instances when a re-stocking fee is necessary.

This charge is determined by a percentage of the cost and condition of the item when returned.

There are other factors, so let’s examine those.

There is no restocking fee if the customer only changes their mind about the product and the product is not damaged in any way. It also must be returned during the allowable refund time table. If the same kind of item is returned outside the return window, there will be a restocking fee of up to 20% of the item’s cost.

If the buyer purchased a used or damaged product there is also no restocking fee, but the seller has the option to purchase insurance.

If the buyer sends the product back due to damage during shipping, there is no restocking fee, but the seller may opt to pay for the delivery of the undamaged products. Seller may also choose to invest in insurance.

Up to 50% of the items price will incur into a restocking fee if a product sold is returned damaged, or if CD or DVD cases have been opened

There is a 100% restocking fee if video games are returned open.

There is no fee if the buyer received a totally different item than what they ordered.

Return shipping fees

Amazon offers free return shipping on jewelry, apparel, handbags, shoes, watches, and luggage.

For instance, if you purchased a pair of shoes with a $5.00 processing fee, but returned the product because of damage or wrong goods, the return shipping fee of the correct product, for the customer would be 0.

However, for the seller, it’s a different story.

If a product is determined to be damaged before reaching the customer, the seller pays the refund and the shipping prices, plus taxes.

If the customer just decides they do not want the product, then return shipping costs will not have to be paid by the seller.

How Do Sellers Handle Customer Returns?

Why do customers return items?

Buyers return items for many reasons, and not all of them are honest.

First of all, products may be damaged or someone in the warehouse shipped the entirely wrong item.

Product shipping containers may be damaged making customers afraid to open or keep the item.

There are also circumstances where buyers learn they don’t need the item in the time frame that it ships to them.

Maybe someone gifted the same item before the product arrived from Amazon.

Then you do sometimes have dishonest people who receive the item, use it for a while, and then return the item expecting a full refund.

It happens more than it should.

There are ways to handle returns in a positive way

Better communication between Amazon and the buyer would help in the explanation of the return. This is called customer service, which is not what it used to be.
A thorough examination of the item by Amazon if the product is reported damaged.
Faster returns on damaged or wrong items would soothe the frustration between buyer and seller.
Sometimes concessions are offered to those who return items. This could be covering buyers’ shipping costs or issuing a monetary concession.

How to verifying customer return scams

There are a few ways to verify whether refunds, reimbursements are necessary.

Like I mentioned before, some refund requests can be dishonest. There are ways to figure out who really needs help and who wants a free ride.

Tracking numbers

There is more than one reason tracking numbers are in use during shipping. Everyone wants to make sure they receive their products.

If the item is late, they can use the tracking number to locate the approximate area of their package.

When it comes to a scam, when buyers report not receiving their package, the tracking number can reveal if they are telling the truth.

At the end of delivery, the tracking number says, “delivered to destination”.

This makes it harder for scammers to get free products.

Tamper-proof stickers

Sometimes buyers will receive a new product, replace the product with an old one they already have, and return the product for a refund. Until recently, this has worked well for the scammers.

Now there are tamper-proof stickers placed on the product, and if you try to remove them, they tear.

This makes it a bit harder, or just too much work for the scammer to continue their plans.

Ignore emails without order numbers

Sometimes people send emails to Amazon or sellers to say they’ve lost their package and so on.

But without this order number, the scam is useless. Always ignore these and don’t open any links.

How to Avoid Customer Returns?

To avoid return problems, sellers need to know some of the normal causes of why customers start a return on Amazon.

So, before things happen, let’s first understand some things about returns and take precautions.

Products do not match with descriptions

When writing the descriptions of your listings, you need to make sure that all info is based on the actual facts, and do not deliberately exaggerate the products.

Otherwise, it is normal to encounter a return and other troubles when customers find out they receive something different than they thought.

Also, pay attention to clearly explain the parameters of products on the listings so as to avoid customers who originally wanted to buy the iPhone 7 plus phone case but you sent an iPhone 7 phone case.

Lack of product instruction

Some products are slightly complicated or require specific operations. A necessary reminder for how to use the items should be written on the listings, and a detailed instruction manual must be provided.

Quality issue

No one wants to buy something that is faulty. This requires sellers to find reliable suppliers and strictly do a quality check before shipment.

Shipping damage

It would be a great thing if a product reaches the customer’s hands in the shortest time.

But, sellers should pay more attention to the shipping methods and packages. Make sure to well-pack your items to reduce damages, especially for fragile cargo.

Here are some of the useful tips that you can check how to prevent returns happen:

Always respond to customers’ questions about their product in a timely manner. This builds trust between you and your buyers.

Always keep specific return policies in an easy to access place for customers to read. Try not to change return policies constantly, even to suit one or two customers. Be consistent, and buyers will respect that.

Make improvements on products and check them for any slight damages. Even small scratches or stains will be noticed, and the product will be returned.

Make sure your items are packed well. Use the correct shipping materials if you are working with fulfillment as a merchant, you can control all this.

Make sure all listings of your products are accurate and filled with details. The more details about the product, the less misunderstanding it will cause.

Always provide complete instructions on how to use the product. The easier it is for the customer, the more likely they will not return the item. Hopefully, they will love it.

Conclusion

Understanding return policies at Amazon makes things much easier.

Although the goal is to sell great products that the customer will love, sometimes there are returns.

At the point of that return, we must decide how we will handle making the customer happy again.

These policies on returning products to Amazon help break down every facet of how returns, refunds, and reimbursements work.

As a seller at Amazon, your responsibilities are many. But if handled in the correct way, your business could reach unprecedented proportions.

If they keep coming back, it could be just as much about the service and communication as the product itself. Go, and make this happen.