How can Amazon sellers deal with returns in 2024?

Selling on Amazon can be both rewarding and challenging. While the thrill of growing your business on the world's largest online marketplace is undeniable, some aspects require careful consideration and a strategic approach. One such area that often presents itself as a hurdle is dealing with Amazon's return policies, refund processes, and the sometimes complex realm of customer interactions. In this blog, we're here to shed light on these crucial aspects of the Amazon seller journey. Our Amazon consulting experts will not only unravel the intricacies of Amazon's return policies and refund procedures but also explore effective strategies for handling customer interactions and managing returned products.

Understanding Amazon’s return policy

Amazon's return policy differs for FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) sellers. For FBA sellers, Amazon takes charge of the entire returns process, including return label provision, item inspection, and restocking. This gives FBA sellers the benefit of Amazon's efficient return management system. In contrast, FBM sellers are responsible for receiving and restocking returns, offering them more control over product conditions and the possibility of charging restocking fees for damaged items.

FBM sellers on Amazon are required to match or exceed Amazon's standardized return policy, which stipulates accepting returns within 30 days. Amazon usually refunds buyers promptly, often before the seller even receives the returned item. This is due to Amazon's Refund at First Scan (RFS) policy. However, FBM sellers can opt for the Amazon Prepaid Returns Label program for automatic return shipping labels.

• Returns for opened items: Amazon generally allows customers to return opened items within the specified return window of around 30 days, regardless of whether the item was opened or not. Some exceptions apply to perishable or personalized products.

• Returning used items: Customers can return used items by submitting a return request, but certain product categories like health and personal care items may have stricter return guidelines. Sellers should communicate their return policies.

• Handling taxes on Amazon returns: Amazon takes care of tax handling on returns, including calculating, collecting, and refunding applicable taxes and regulatory fees.

How can Amazon sellers efficiently handle returns?

#1: Keep a record of returns

Keeping a record of the return notification email from Amazon is a fundamental step in efficient return management for Amazon sellers and Amazon seller account management experts. This email serves as the initial point of contact between the seller and the customer requesting a return. Here's a detailed paragraph explaining its significance:

The return notification email from Amazon is a pivotal document in an Amazon seller's return handling process. It marks the beginning of the return journey, providing essential information about the customer's request, including the order number, the reason for return, and the item being returned. By diligently archiving and documenting this email, sellers not only ensure they have a record of the customer's intent but also gain a valuable reference point for tracking the return's progress. This record becomes especially important when dealing with multiple returns or in cases where disputes may arise.

Sellers can refer back to this notification to verify the details of the return and ensure a smooth and accurate resolution. Additionally, it serves as an audit trail for financial reconciliation, helping sellers maintain transparency and accountability in their operations. In essence, the return notification email acts as the cornerstone of efficient return management, empowering sellers to provide timely and accurate responses, ultimately enhancing the overall customer experience on the Amazon platform.

Understanding the reasons behind product returns is essential for Amazon sellers to reduce future return rates and address underlying issues effectively.

#2: Identify the reason for returns

Understanding the reasons behind product returns is essential for Amazon sellers to reduce future return rates and address underlying issues effectively. Here's an elaboration on how to identify the reasons for returns and why this process is vital:

• Quality and defects: When products are returned due to quality issues or defects, sellers must investigate these cases. This may involve reaching out to the supplier or manufacturer to address the root cause of the problem. By resolving quality issues, sellers can prevent future returns stemming from similar concerns.

• Late delivery issues: If late delivery is a recurring problem leading to returns, sellers need to assess their shipping and logistics processes. Timely and reliable delivery is paramount for customer satisfaction. Resolving shipping issues can help minimize returns due to late deliveries.

• Customer feedback: Reaching out to customers who initiate returns can provide valuable insights into their reasons. This direct communication can uncover specific issues that may not be apparent from the return reason codes alone. Engaging with customers allows sellers to address concerns and potentially retain customers who might otherwise have a negative experience.

Amazon offers a reporting feature for sellers to analyze return data. To create a report, sellers can navigate to 'Reports,' 'Fulfillment,' 'Customer concessions,' and then 'Returns' in their Seller Account. This report provides a comprehensive overview of return reasons and patterns, helping sellers identify recurring issues.

#3: Inspect the returns

Inspecting returns is a crucial practice for both FBA (Fulfillment by Amazon) and FBM (Fulfillment by Merchant) sellers on Amazon. This process serves two primary purposes:

1. Suitability for resale: Sellers should inspect returned items to determine whether they are in a condition suitable for resale. This involves assessing the product's quality, completeness, and packaging. For FBM sellers, it's especially vital to ensure that returned items meet the high-quality standards expected by Amazon shoppers. If an item can be resold as new or refurbished, it can re-enter the inventory, reducing potential losses.
2. Accuracy of return reason: Sellers should also verify whether the stated reason for
return aligns with the actual condition of the item. Sometimes, customers may select reasons for returns that qualify for free return shipping, such as claiming an item is defective when it's not. This can impact an Amazon seller's metrics negatively. Hence, it's essential to confirm the accuracy of the return reason.

If, during the inspection, a seller discovers that a returned item is not truly defective but was marked as such by the customer, it's advisable to take action. Here's a suggested course of action:

For FBM sellers:

• Open a support ticket with Amazon.

• Provide photographic evidence of the item's actual condition, demonstrating that it is not defective.

• Include the order slip or relevant documentation.

• This communication may lead to reimbursement for the seller, helping to offset the potential loss caused by the inaccurate return reason.

For FBA sellers:

• Inspecting Amazon FBA returns is somewhat more complex for FBA sellers.

• It often requires requesting a removal order for the returned item, which may incur a cost of 50 cents for standard-sized items.

• The item can then be assessed, and if it is found to be in resalable condition, it can be reintroduced into inventory.

#4: Monitor return trends

Monitoring return trends is a valuable practice for Amazon sellers as it provides insights into the reasons behind customer returns. By paying close attention to these trends, sellers and Amazon seller experts can make informed decisions to improve their products and listings. Here's an elaboration on why monitoring return trends is essential and how it can benefit sellers:

1. Identifying patterns: Regularly reviewing and analyzing the reasons for returns allows sellers to identify recurring patterns. Sellers can track common issues or concerns that lead to returns, such as product quality, sizing, or description discrepancies. Recognizing these patterns is the first step in addressing the root causes of returns.

2. Informed decision-making: Armed with data on return trends, sellers can make informed decisions to mitigate future returns. For example, if a specific size-related issue leads to frequent returns, sellers can update their size charts, provide clearer product descriptions, or consider offering additional sizing options. These decisions can help reduce returns in the long run.

3. Product improvements: Return trend analysis can highlight areas where product improvements are needed. Sellers can use customer feedback from returns to refine their product designs, enhance quality control processes, or collaborate with suppliers to resolve recurring issues. These improvements can lead to higher customer satisfaction and fewer returns.

4. Listing updates: Return trends can also inform listing updates. Sellers can revise product descriptions, add more detailed images, or clarify product specifications to better align with customer expectations. By accurately representing products, sellers can reduce the likelihood of returns due to misunderstandings.

#5: Deal with your returns

Amazon provides several programs to help sellers manage returned or damaged items efficiently and minimize potential losses. These programs offer alternatives to returning or disposing of inventory, allowing sellers to recoup some money or contribute to charitable causes. Here's an expanded explanation of these programs:

1. FBA Liquidations:

The FBA Liquidations program is designed to assist sellers in liquidating excess inventory and customer returns rather than incurring additional storage fees or having the inventory destroyed. Here's how it works:

Sellers can submit a liquidation request through Seller Central.

Amazon evaluates various factors to determine the average selling price of the product.

• Wholesale liquidators typically purchase this inventory for around 5% to 10% of the product's average selling price.

• Once the inventory is purchased by a liquidator, Amazon disburses payment to the seller within 60 days.

• This program offers sellers a means to recover some value from excess or used inventory, providing an alternative to paying Amazon for returns or destruction of items.

2. FBA Grade and Resell:

The FBA Grade and Resell program enables sellers to relist and sell unfulfillable returned inventory as used items rather than incurring expenses to return or destroy the items. The process involves the following steps:

• Sellers submit their unfulfillable inventory to the program.

• Amazon evaluates the condition of the items and assigns a grade, such as Used – Like New, Used – Very Good, Used – Good, or Used – Acceptable.

• Amazon creates new listings for these graded items.

• This program helps sellers recover potential losses from returned items while also reducing waste and minimizing environmental impact.

3. FBA Donations:

The FBA Donations program offers sellers an option to donate eligible inventory to selected US charities instead of discarding it or returning it. The key points of this program are as follows:

• Sellers can donate excess or unfulfillable inventory through Amazon's FBA Donations program.

• Amazon has partnered with Good360, a nonprofit organization, to distribute donated inventory to a network of nonprofits in the US.

• This program reduces waste by giving products a new purpose and helps those in need.

• It may also offer sellers potential tax benefits for their charitable contributions.

• FBA Donations provide a planet-friendly alternative to disposing of unwanted inventory, contributing to both environmental sustainability and charitable causes.

Wrapping it up

Returns are indeed an inevitable aspect of doing business. However, the key to success lies in efficiently managing and minimizing them. By prioritizing product quality and creating meticulously optimized listings with comprehensive information, sellers can reduce return counts and enhance customer satisfaction.

Ultimately, handling returns efficiently is not just a practice; it's a strategic approach that aligns with the broader goal of building a thriving and reputable Amazon or e-commerce business. If you seek expert guidance on achieving this goal, eStore Factory’s Amazon consultants stand ready to assist, offering tailored strategies and solutions to navigate the intricacies of return management and propel your business toward growth and success.