Amazon’s customer return policy is great for buyers, however, the Amazon Seller return policy can cost online business owners their livelihood, and double the original FBA fees, if they aren’t careful. Although the company’s customer-focused stance on satisfaction and refunds is clear for buyers, that’s not quite the case for Amazon sellers.
Returns are a risk that sellers have to take, as Amazon is recognized as one of the most popular e-commerce platforms. Being informed will also help you prevent customers from returning damaged merchandise while you foot the bill.
Whether you’re just starting out on Amazon or you’re a seasoned seller, it’s important to familiarize yourself with return policies so that you can understand how to keep your online business profitable.
Read on to learn the ins-and-outs of the Amazon Seller Return Policy, including what categories have the highest returns, how to process returns, and what FBA fees you’ll need to pay attention to.
Return Policy Break Down for Amazon Sellers
Having an item returned to you or a fulfillment warehouse is inevitable. Here’s a full breakdown on Amazon’s Customer Return Policy and FBA Amazon Seller Return Policy.
FBA Timeframe for Customer Returns
Generally, items shipped from Amazon.com can be returned for a full refund within 30 days of receipt of shipment. However, Amazon may also grant a refund beyond the 30-day return window on a case-by-case basis to “ensure a great customer experience.” If a buyer does not return said merchandise within 45 days, Amazon refunds you.
The return window may also be extended during peak holiday seasons. Previously, Amazon’s window on returns had also been extended to support employees and customer communities during the COVID-19 pandemic.
So, if you’re looking for a solid answer, Amazon controls the timeframe for acceptable returns.
FBM Timeframe for Customer Returns
Third-party sellers are expected to meet or exceed Amazon’s customer return policy of 30 days.
If your products are fulfilled by Amazon (FBA), one of the perks is that Amazon provides fulfillment, customer service, and processes returns for you.
The first step that happens after an item is returned to Amazon is an inspection that determines whether or not an item can be resold. Most items sold are subject to returns processing fees.
Returns Processing Fees
When a customer returns a product, sellers are charged a fee for each unit returned. This fee is the equivalent of the fulfillment fees for an individual unit. Items in these categories are subject to a returns processing fee:
- Shoes, Handbags & Sunglasses
The returns processing fee is equal to the total fulfillment fee for a given product. In cases where multiple units were shipped as part of a single order, the returns processing fee paid on a single unit may be higher than the total fulfillment fees.
How Amazon Determines Responsibility
When an item is sent back to a fulfillment center, an Amazon employee inspects the item to verify if it is still sellable. If it is not, they work to determine who is responsible for the damage.
If a returned item is in sellable condition, Amazon returns the item to inventory and does not reimburse your account for any FBA fees.
If it is in unsellable condition, Amazon works to determine who is responsible for its condition. If Amazon accepts responsibility, Sellers are reimbursed and the item is not added back to your inventory.
If Amazon does not accept responsibility and a customer is responsible for its condition, they will not reimburse you and the item is added to your unfulfillable inventory to be stored, destroyed, or sent to you.
Returns & Reimbursements
If you qualify for a reimbursement for a replacement order, Amazon will reimburse you for the price of the item on the original order minus Selling on Amazon and FBA fees.
Full or Partial Reimbursements
Amazon provides a full or partial reimbursement if your item has been determined to be lost or damaged while in transit to the customer.
If you are eligible to receive a reimbursement for a refund, Amazon will reimburse you for all or part of the refund amount debited from your account, minus FBA fees.
Amazon Restocking Fee
In some cases, (for example, when a returned item has been opened) Amazon may charge the customer a restocking fee. If so, your account is credited in the amount of the restocking fee.
However, you do not receive a restocking fee credit if Amazon takes responsibility for the condition of the returned item and issues you a reimbursement.
Read more about how to charge an Amazon restocking fee here.
Amazon may also issue replacements to customers returning FBA items.
When that happens, Amazon will ship a new item from your inventory free of charge to a customer on the conditions that it is still in stock, and customers must return the item being replaced.
Unfortunately, as a seller, you will not receive payment for a replacement order. However, you will also not be charged fees.
When an item is stored in an FBA warehouse, it incurs a variety of fees related to storage, fulfillment, and labeling.
When an item is returned to a fulfillment center, it becomes subject to additional charges.
FBA Removal Fees
FBA removal order fees are charged when an item is deemed as unsellable in its current condition. This is the cost Amazon charges when those items are sent back to the seller to dispose of.
You may be charged per-item removal fees if you decide you’d like to remove your inventory from Amazon’s warehouse. If you don’t do this before the 14th of the month, you may incur long-term storage fees.
A removal order notifies Amazon’s fulfillment center that you would like unsellable or slow-moving items removed from your inventory. Generally, removal orders are processed within 14 business days but can take longer during peak seasons.
FBA Disposal Fees
FBA Disposal fees are charged when an item is deemed as unsellable in its current condition. Unlike removal order fees, which are charged when items are sent back to sellers, disposal fees are the cost Amazon charges to destroy the items for sellers.
To learn more about FBA fees, read about 10 Changes Happening to Amazon Referral and FBA Fees in 2020.
Managing Merchant Fulfilled (FBM) Returns
If you’re an Amazon seller that’s had to shift their inventory to being merchant fulfilled for various reasons, you can read more about how to best handle returns or issue a refund here.
Sellers who fulfill their own inventory must provide a return address and prepaid shipping label for returns or offer a full refund without requesting the item be returned.
Sellers who do not meet these requirements may have an A-to-Z Guarantee claim filed against their account. Like negative reviews, having too many claims filed against your account can impact your ability to sell and may qualify your seller account for termination or suspension.
Categories with the Highest Return Rate
Reverse logistics from Statista suggest that categories in Clothing & Accessories, Consumer Electronics, Home, Kitchen & Garden, and Sports & Outdoors.
If you’re a seller and considering selling products in these categories, be sure you’re calculating selling fees to see if your product can stay profitable, even with returns.
Reducing Return Rate
If you’re frustrated with the frequency of returns you’re receiving, ensure that you use your product listing detail page to educate customers on what they can expect to receive.
You can update these details to help decrease your return rate:
- Product description
- Product packaging quality so items don’t arrive damaged
It’s in your best interest to take action before your return rate gets too high, otherwise, Amazon reserves the right to suspend your product listing and seller account.
Additionally, avoiding returns in the first place can keep you from being charged return processing fees. This way, you minimize the amount of FBA storage fees, fulfillment fees, and processing fees altogether.
Many customers who purchase products on Amazon think that they’re purchasing directly from the site’s inventory and not from an individual seller. Because of this, Amazon sellers are held responsible for covering the cost of the product and various FBA fees.
To avoid missing out on profits, sellers should keep an eye on filing for reimbursements, moving unsellable inventory from FBA, and aligning customer expectations using their product listing details. Doing so can be what makes all the difference in a successful product or brand launch on Amazon.
Product returns are unavoidable whenever you’re selling goods and products. Staying updated on the Amazon return policy for customers and FBA/FBM Sellers will help you navigate the unfortunate risk of accepting returns more often than you’d like.