A perk of Amazon FBA is that Amazon deal with all your businesses customer service. Which means you can focus on sourcing deals and growing your business! But how exactly do product returns work? In this week’s blog we are breaking down how returns work with Amazon FBA. So if a return ever comes through you know how to deal with it and what to do to minimise the number of returns in the future.
So how do returns work?
As a seller you want customers to be satisfied with the products they buy. However there are rare times where for whatever reason, a customer is not satisfied. Customers can therefore organise to return the item back to you and receive their money back.
The majority of items can be returned by customers within 30 days of them receiving their order. However returns can also be accepted for a longer period of time. For example, items in the Baby category which are new or unopened can be returned in 90 days, rather than 30 days. Amazon will also pay for the return without charging the customer. Say you mostly sell Baby products, this is a detail which is useful to be aware of as conditions for a return are not all the same.
Once the customer requests a return and sends the item back to Amazon, a message will be sent to the customer acknowledging the return and the cost of the product will be taken from your seller account. Once the return has been completed you will then receive a notification on Amazon confirming the return.
What happens if the return process is not completed?
Amazon works to ensure that it is operating at the highest level of efficiency. but they cannot avoid certain issues. Do not worry, Amazon has ensured there are safety nets in place to resolve these situations.
If a customer intentionally or mistakenly claims that they still haven’t received a refund you will need to open a Support Ticket in your Seller Account to resolve the issue. We have a blog explaining how you can contact Seller Support here. Amazon’s Support team will then be able to work with you to resolve any issues.
If the buyer does not return the item within the chosen amount of time Amazon will recharge the customer if they have previously been refunded and reimburse you, the seller.
How do Amazon classify items when completing returns?
It wouldn’t be a good idea to put a broken or damaged product back into your active inventory following a return. As this could negatively affect your Amazon Account Health Rating. To avoid this Amazon classify items once a return has been completed. But what exactly do the different terms mean?
| Sellable | The item is in good condition and can be returned to your active inventory. You will then be able to sell the item again. But you may want to inspect the item before it goes back into your inventory. |
| Damaged | You cannot resell these items. This is because they go against Amazon’s terms and are not in a fit condition to be sold. |
| Customer Damaged | This is when the external packaging has been damaged or is no longer in ‘new’ condition. A customer may not have purposefully damaged the item. |
| Carrier Damaged | Are items which have been damaged or lost during transit. For an item to be a carrier damaged item it must have been: registered when loss or damage occurred, comply with FBA requirements, is not defective or damaged by the customer, it is not pending disposal or disposed of on your request. |
| Defective | The item is not functioning properly. |
| Expired | Products which are within 50 days of the expiration date can be set aside by Amazon and destroyed. This is to avoid food being sold which has expired and could pose a health risk. |
If an item cannot be sold Amazon will evaluate the condition of the item and decide who is responsible. This could be due to the seller, Amazon themselves during the fulfilment process or the customer. If Amazon find that they are at fault for damaging a product you will be reimbursed.
Reimbursements: what they are and how they work.
Reimbursements are given by Amazon when an item cannot be sold as a result of Amazon’s actions. An example of this would be if an item was damaged during delivery or lost in one of Amazon’s warehouses.
Sellers can receive a reimbursement if the exact products and the correct amount have been sent to Amazon. If your Amazon selling account has the status of ‘normal’ when you filed the claim for the item. Or if a customer received a refund for their item but the item was not returned.
Reimbursements are based on a selection of data including the products current and previous pricing and the median pricing for the same item from other sellers. If there is not enough data for the product Amazon will give an estimate based on similar items.
Restocking fees are part of the return process.
Due to the time and effort it takes for returns to be processed Amazon charges sellers for returns. But if the return has been initiated by the customer, they will be charged for restocking the sellable returned items.
Customers can be charged a restocking fee if they are responsible for the item’s return. For example;
- If the customer ordered the item by accident.
- They saw a better price elsewhere and brought the item from another supplier.
- They no longer wanted or needed the item.
The restocking fee is a percentage of the items price which increases based on when the return was completed. It also depends on the condition of the item or if the product is open software or a video game.
You can learn more about Amazon’s seller fees here.
How can I reduce the likelihood of having to deal with a return?
How often have you wished for a crystal ball? When growing your FBA business a large part of your first few months will be learning as much as you can about Amazon and how it all works. Of course you cannot foresee certain issues. However this is all part of the learning process, and there are things you can do to reduce the likelihood of receiving a return:
- Double check that your product listing and descriptions are accurate.
- Encourage customers to leave reviews. This will act as a signpost to future customers so they have a better idea of what to expect from a product.
- If an item has been returned, spend time understanding why and how to resolve the issue so it does not happen again.
If an item is being returned multiple times it is worth organising a removal order so you can take a closer look at the product. By making the product inactive during this time you can make sure the product is not ordered by another customer and the process is repeated.
This way you can see why an item has been returned and how you can avoid it being returned in the future. For example, the item may need more protective packaging to avoid scuffing or cracks in the packaging. Being proactive is also beneficial in helping you to provide the very best service and make sure your Account Health Rating does not drop.
Concluding thoughts.
We hope you have a better idea of how Amazon FBA returns work. If you take anything away from this blog we would suggest making a note of these main points.
Firstly, returns are usually possible within 30 days of the customer receiving an item. But return processes can be different depending on the product so it is important to check.
Secondly, if you receive a return we would suggest organising a removal order so you can look at the item yourself and understand the steps you can take to avoid returns in the future.
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If you are interested in learning more about Amazon FBA check out our Youtube channel. It is a great place to learn more about how Amazon FBA works and how to grow your business.