Returns are a big deal for ecommerce and that’s no less true for sellers on Amazon’s marketplace. It’s important to understand how returns work so you can anticipate and plan accordingly.
Amazon has recently announced some new returns policies and features that you’ll want to know about. This includes a new Returns Performance Dashboard, an extended holiday season returns window, and new ways to handle returned merchandise.
Returns are huge in ecommerce
Returns make up a big part of any ecommerce business. The return rate can be three times as high as brick-and-mortar returns because shoppers can’t touch or try on products before they buy them online. Shoppers returned roughly $102 billion worth of ecommerce products in 2020.
Return volume tends to increase during the holiday season alongside sales volume. Shoppers purchase gifts with the expectation that the receiver can return unwanted items.
If this weren’t enough, not all returns are legitimate. Returns fraud is a huge issue for the ecommerce industry.
Shoppers want no-hassle returns
Meanwhile, shoppers expect returns to be free and easy and refunds to be forthcoming. 79% of shoppers say they want free return shipping and 92% say they’ll buy again if returns are easy.
So Amazon’s returns policy is very generous toward shoppers. It makes it easy to return unwanted products and to receive a full refund, encouraging shoppers to make purchases with confidence.
What is Amazon’s returns policy?
Amazon’s returns policy dictates how returns will be handled by third-party sellers on the marketplace.
Returns on products fulfilled by FBA are handled entirely by Amazon.
Usually, shoppers can request a return up to 30 days from the time they have received their order. When returns arrive back at the fulfillment center, Amazon inspects them and either returns them to inventory or determines that they are unsellable.
Amazon issues reimbursements to the seller but may also charge the seller fees for restocking or processing the return.
Amazon may issue a replacement to the shopper. In that case, they send another item from your inventory but do not charge the customer and there are no additional fees for you.
For seller-fulfilled orders, sellers must at minimum match the generous Amazon returns policy and much of the process is still automated by Amazon.
Amazon automatically approves return requests and provides shoppers with prepaid returns labels.
How to minimize returns
The best way to ease the headache of returns is to minimize the returns before they even start.
There are so many upsides to this — saving you money, creating happier customers who may become repeat customers, and not contributing to landfill waste.
There are three things you can do to prevent returns: 1. Sell great products, 2. Take the time to develop excellent product detail pages, 3. Deliver a seamless customer experience.
The first piece of advice ought to be pretty obvious. If you sell a product that’s well manufactured and delights users, customers are more likely to want to keep the product when they receive it.
Thorough product listings
The second step might not be as obvious. You can minimize returns by taking the time to be very clear about all the details of your product on the listing. This includes modifying the listing based on changes to product specifications, and using up-to-date packaging for all product photos. If you set expectations and don’t leave unanswered questions, surprises are less likely and that means fewer disappointed shoppers sending products back – and leaving bad reviews.
Smooth customer experience
Finally, consider how you can minimize returns with a smooth customer experience. Fulfillment systems that deliver on time and keep shoppers updated prevent purchases from arriving when they’re no longer needed. Thoughtful packaging can create a delightful experience that makes a buyer feel good about their purchase.
NEW Returns Performance dashboard
To make it easier to understand your returns performance and address issues that may arise, Amazon has announced that it will launch a Returns Performance dashboard on October 21 along with a Returns Analysis page.
Performance metrics you’ll get from the new dashboard include:
- return requests approved in less than 24 hours
- total declined return requests
- return-related buyer contact rate
The Returns Analysis page is specially meant to help identify products with returns issues that require your attention.
Some sellers have wondered whether this dashboard might be turned into a way to assess and penalize sellers for their performance, similar to the IPI score. At this point in time, Amazon hasn’t indicated that is the case.
Extended holiday returns
Another returns update that sellers should be aware of is the annual extended holiday returns policy.
The extension means that most items sold between Oct 1, 2021 and Dec 31, 2021 will be eligible for return through Jan 31, 2022.
The extension of the return window does not change what items are eligible for return.
What to do with returned products
With returned goods that Amazon deems unsellable, you still may have an opportunity to recoup some of the loss. Shoppers have expressed interest in brands that enact planet-friendly values by minimizing their waste.
Amazon offers three greener programs for handling returned products: FBA Grade and Resell, FBA Liquidations, and FBA Donations.
With FBA Grade and Resell, returned products are assessed for fitness to resell as “used” on Amazon. With this program, Amazon evaluates the condition of the returned products but then sellers control pricing and advertising.
Sellers can choose to utilize FBA Liquidations to send their returned products to Amazon’s wholesale liquidation partners.
Finally, with FBA Donations, Amazon routes returned goods to their charity partners to benefit those in need.
Returns are a headache but they’re a fact of retail and even more significant in ecommerce. Here’s what to keep in mind:
- Ecommerce return rates can be three times as high as traditional retail returns
- Shoppers look for and expect hassle-free returns and refunds when they’re making purchases
- You can minimize returns by offering a great product and using the listing to set expectations
- Amazon’s returns policy doesn’t leave much room for deviation by you as a third party seller
- You’ll soon be able to track, analyze, and respond to returns issues with the new Returns Performance dashboard
- Be aware that Amazon extends the returns window during the holiday shopping season
- Consider green alternatives to destroying unsellable inventory