Yes, returns are part and parcel of doing business on Amazon, making it an essential aspect every seller must deal with. Consider this – approximately 30% of all products ordered online were returned, compared to only 8.9% in brick-and-mortar stores.
Imagine having a third of your sales returned! Handling these returns while adhering to Amazon’s policies can significantly improve your Seller rating.
That’s why we have crafted this guide with care to understand the nuances of Amazon’s return policy, learn about its intricacies, and help you sell products on Amazon hassle-freely.
What is Amazon’s Return Policy?
Amazon’s return policy is a key factor in the company’s success and customer loyalty, as it protects buyers and sellers. Essentially, it allows customers to return most items bought on Amazon within a specified time limit, usually 30 days from the date of receipt.
However, the policy is not a free-for-all. Not all items are return-friendly. For instance, perishables, personalised items, and digital content, including eBooks, cannot be returned. The rationale is pretty straightforward as these items are either impossible to resell due to their nature or due to hygiene and copyright regulations.
So, if you’re a seller dealing with such products, you can breathe easily.
What is the Amazon Return Process?
For customers, initiating a return on Amazon is pretty straightforward. They have a window of 30 days to return most items.
But here’s a step-by-step breakdown of what happens behind the scenes:
Customer initiates a return: If customers aren’t satisfied with a product purchased, they can initiate a return request directly through their Amazon account. Amazon will automatically authorise this request if it falls within their return policy.
Seller receives return requests: As a professional seller, you can manage return requests through the “Manage Returns” page on your seller account. This is where you can view, authorise, or decline the request.
Return label provided: Once you approve the return request, Amazon will generate a return label for the customer. This label isn’t prepaid by default, but you, as the seller, can choose to upload a custom prepaid return label if you’re covering the return shipping cost.
Customer returns the product: The customer will then use the provided label to ship the product back to the indicated address.
Seller processes the return: Once the returned item is received, the seller can process the return, which may involve issuing a refund, providing a replacement, or taking other steps based on the nature of the return.
The seller manages potential issues: If a return request is outside the Amazon return policy or exempt from a prepaid return, Amazon will forward the request to you for your discretion.
How are Amazon Refunds Issued?
The process starts when a buyer returns your product. The nature of the refund that they receive depends on three crucial factors:
- The condition of the returned item
- How long has the customer had the product
- The method used for the original purchase
Understanding how refunds are issued based on the original payment method can help both buyers and sellers navigate this process smoothly:
- For credit card purchases, expect a refund within 3-5 business days, either back to the credit card or as an immediate gift card credit, depending on the buyer’s preference.
- Debit card transactions are refunded to the debit card within ten business days.
- Purchases made from a checking account are similarly refunded within ten business days.
- Amazon gift card purchases are refunded immediately back to the gift card balance.
- No refunds are issued for purchases made with promotional certificates, as these are one-time-use incentives.
- When an order is placed using a mix of an Amazon gift card and a credit card, the refund can be processed as a credit to the gift card balance, the credit card, or both.
- Prepaid credit card refunds vary in their processing time and could take up to 30 days, depending on the card issuer.
- If the purchase was made using reward points, the refund would be processed within five business days back to the reward point balance.
An important point to note is that if a refund is issued to a prepaid card that the buyer no longer physically has, it is still saved in their Amazon account and can be used for future purchases.
Additionally, in case an order was placed using the Amazon Currency converter, the refund will be issued in the local currency, calculated using the same exchange rate that was in effect when the order was placed.
How to Process a Return Request?
Understanding the process of handling return requests is an integral part of being a successful Amazon seller. So, let’s walk you through the process of handling return requests on Amazon.
1. Authorising the Request
Whether you’re an individual seller handling your returns manually or a professional seller dealing with an out-of-policy request, the first step is to authorise the return.
- Log in to your Amazon Seller Central account and navigate to Orders > Manage Returns.
- For single-return requests, select the request you want to review. You will then need to use the Return Merchandise Authorization (RMA) number generated by Amazon or enter a custom RMA number. This number will be visible to the buyer on their return authorisation slip under the return label.
- Note that you can use an Amazon-generated unpaid return label or upload your prepaid return label. If you’re using an Amazon-generated label, your return address will automatically appear on the label. You can modify this address by going to Account Info > Return Address.
- For authorising multiple return requests at once, select the requests to review from the Manage Returns page, then choose ‘Authorise all selected returns’ from the dropdown menu.
2. Closing the Request
There are instances when you may want to close a return request. This can be when you’re planning to provide a refund without requiring the item’s return or if you decide not to accept the return. In such cases, pick an appropriate reason for closing the return request and communicate it to the customer. After the request is closed, Amazon will relay your message and the closure reason to the customer.
3. Issuing a Refund
Issuing a refund can happen after the item has been returned or when you decide to let the buyer keep the product. However, if you want your item back, Amazon suggests waiting until you receive it before issuing a refund.
Once you get your product back, you should process the refund within 48 hours. If you don’t, Amazon may refund the amount to the buyer and charge it to your account. To avoid any negative experience for the buyer, it’s crucial to actively monitor your refunds and ensure the customer receives them promptly.
4. Contacting the Buyer
Finally, remember that you always have the option to reach out to the buyer. This could be a preferable course of action if you believe that the issue can be resolved without managing a return or issuing a refund.
Amazon Return Process for Individual Seller (or non-FBA)
In cases where buyers purchase from individual sellers or non-FBA, the return process can differ slightly from purchases made directly from Amazon.
Amazon’s Return Policy Expectations for Individual Sellers
While many individual sellers align their return policies closely with Amazon’s standard policies, some variations might exist. Therefore, it is essential for buyers to review the individual seller’s return policies before making a purchase.
Amazon requires third-party sellers to provide one of the following:
- A valid return address.
- A prepaid return label.
- A full refund without requesting the product to be returned.
If a seller fails to provide any of these three options, buyers have the right to file an A-to-Z Guarantee Claim to seek assistance with their return.
Handling A-to-Z Guarantee Claims
As an individual seller, there may be instances when you need to respond to an A-to-Z Guarantee Claim. If Amazon needs further information while investigating a claim, it will reach out via email, and you’ll have three calendar days to respond. Failing to respond to the claim notification within this period could result in Amazon deciding in the customer’s favor and debiting the claim amount from your account.
To respond to the claim notification:
- Navigate to the ‘Performance’ menu, select ‘A-to-Z Guarantee Claims’,
- Find the claim under the ‘Action Required’ tab, and click ‘Respond to Amazon.’
- Provide detailed information to give Amazon a clear picture of the situation and submit your response.
Regularly checking your emails and promptly responding to claims is vital as it significantly impacts your Amazon Order Defect Rate (ODR).
Amazon Return Process: FBA Seller
As an Amazon FBA seller, you must act promptly once a return request is made to your account. Amazon plays an integral part in this process, assessing the condition of returned items and determining their eligibility for restocking.
This can result in three potential scenarios:
Sellable Returns
If the item sold through Amazon.com is returned in a condition deemed sellable, Amazon will automatically place it back into your inventory and mark it as ‘Fulfillable.’ A portion of the referral fee and, where applicable, Variable Closing Fees associated with the item will be credited back to your account.
Damaged but Amazon-at-Fault Returns
If Amazon deems the returned item to be damaged and unsellable and assumes responsibility for the damage, the item won’t be re-added to your inventory. Instead, Amazon credits your account with the selling price of the item, a portion of the referral fee, any applicable taxes, and possibly the Variable Closing Fees.
Damaged and Amazon-not-at-Fault Returns
If the returned item is damaged and unsellable and Amazon doesn’t take responsibility, it will be added to your inventory but marked as ‘Unfulfillable’. In this case, your account will be credited with all or part of the referral fee and, if applicable, the Variable Closing Fee. You have the option to create a removal order to get the item returned to you.
FBA Removal Order Fee
There’s a fee charged for every item removed, with removal orders typically fulfilled within 14 business days, though it can take up to 30 days during peak seasons. Depending on the size of the item and whether you opt for return or disposal, fees range from ₹5 to ₹50 per item.
FBA Returns Processing Fee
The fulfilment fee per unit, which covers order packing, pickup, customer service, shipping, and product returns, varies depending on the size and weight of the item. Fees range from ₹20 for items weighing less than or equal to 500g and having a dimension less than or equal to 22 cm x 15 cm x 8 cm, and ₹40 for items weighing more than 500g or having a dimension greater than 22 cm x 15 cm x 8 cm.
What to do Before Issuing a Refund?
When a buyer requests a refund, Amazon advises you to:
- Wait to receive the returned shipment before issuing a refund. However, you can also decide to let the buyer keep or discard the product and still issue a refund.
- If the returned product is damaged or in a different condition than when sent, consider processing a ‘partial refund.’ It’s crucial to inform the buyer about this to prevent misunderstandings.
- If you’ve accurately listed and described the item, and the buyer no longer wants it, you can opt to refund the item’s price only, excluding the Amazon shipping cost.
How to Protect from Amazon Return Scammers?
Documenting Shipment Process
A common practice some sellers adopt, particularly when dealing with expensive products, is documenting the packaging and shipment process through videos or photographs. This evidence can be useful if a buyer claims they never received their order. It’s a safeguard that requires extra effort but can save you from unjust claims.
Signature Requirement and Insurance
Always require a signature for all delivered packages. This provides tangible proof of delivery. For more expensive items, consider getting package insurance. It might add to your costs initially, but the peace of mind it brings is worth it.
Utilize Tracked Delivery
Always use a trackable delivery system. This allows you to confirm that your package has reached its destination and provides a clear timeline of the delivery process.
Timely Communication
Timely responses to customers’ emails are crucial. Failure to respond within a reasonable timeframe can lead to claims, even against top-performing sellers. Always prioritize your customer communication.
Accurate Product Images and Descriptions
To prevent any confusion, make sure to provide precise images and descriptions of your products. It is important to ensure that your offers match the correct ASINs to avoid any potential claims that may arise from listing a product incorrectly.
Prompt Action on Out-of-Stock Orders
If an item goes out of stock, notify the buyer immediately to manage their expectations. Be sure to cancel the order if you haven’t done so.
How to Refund Tax?
As an Amazon seller, there might be instances where you need to refund the tax amount to the buyer. Firstly, verify whether the buyer indeed qualifies for tax-exempt status. This is vital because the right to a tax refund is reserved for this category of buyers.
How to Process a Tax Refund?
To process a tax refund, follow these steps:
- Navigate to ‘Manage Orders’ and locate the order for which you wish to issue a tax refund.
- On the ‘Order Details’ page, click ‘Refund Order’.
- At the top of the ‘Refund Order’ page, select ‘Refund tax only’.
- Choose ‘Order from an unincorporated area’ or ‘Tax-exempt buyer’.
- If you choose ‘Order from an unincorporated area,’ you must select the jurisdiction to which you will refund.
- If you choose ‘Tax-exempt buyer,’ you must select a reason for the exemption.
- Click on ‘Submit Refund’.
Identifying Who is Responsible for the Tax Refund
There are cases where you might not be able to refund the tax. This could happen if the order was fulfilled through FBA or sent to a location where Amazon manages tax collection, calculation, refunds, and remittance. In such cases, follow these steps to determine who is responsible for the tax refund:
- Check your Fulfilment method from the ‘Manage Orders’ page, which should be ‘Merchant’ or ‘Amazon.’
- On the same page, check if there’s a note next to the tax indicating whether Merchant manages the “tax” or “tax is managed by Amazon.”
- If the fulfilment method says ‘Amazon’ or the text mentions that Amazon manages the “tax,” the buyer should be directed to contact Amazon Customer Support.
- If the fulfilment method says ‘Merchant’ and the text mentions that Merchant manages the “tax,” you will be responsible for issuing the refund.
If there are additional queries, you can reach out to Amazon’s support team at tax-exempt@amazon.com.
Amazon Seller Return Policy: Restocking Fee
The restocking fee is a percentage of the item price that a buyer may be obligated to pay if they return an item under certain circumstances. However, the amount of this fee depends on the condition of the returned item and the timing of the return.
Determining the Restocking Fee
Here’s how the restocking fee breakdown happens:
- If a buyer returns an item in its original condition, but after the return window, they receive 80% of the item price. Note that, for most items, this return window is typically 30 days from the delivery date.
- Opened media items like DVDs, CDs, cassette tapes, vinyl records, or VHS tapes are subject to a 50% restocking fee.
- Items with missing parts, damage, or signs of use also fall under a 50% restocking fee category.
- Open software or video games do not qualify for a refund, so the restocking fee is 0%.
- In instances where a third-party seller has fulfilled the item, a maximum restocking fee of 20% can be levied, even if the product was returned in its original condition within the 30-day window.
Remember that tax on the restocking fee may apply to items shipped and sold by Amazon.com for customers residing in MD, CT, PA, NV, WV, WI, and VA.
When Can Sellers Charge a Restocking Fee?
A seller is allowed to charge a restocking fee in the following scenarios:
- The buyer finds the same item on a different website and chooses to return the Amazon-bought product.
- The customer changes their mind about the purchase, also known as ‘Buyer’s Remorse.’
- The returned product is significantly different, damaged, or impaired from the original item sent.
How To Process Gift Returns?
A gift return is categorized separately on your Amazon Seller account‘s ‘Manage Returns’ page. A distinctive gift badge can identify it. Remember, even if the order was not marked as a gift during purchase, the recipient can still return it.
Communicating with the Gift Recipient
Amazon recommends communicating directly with the gift recipient instead of the person who purchased it to respect their privacy. To achieve this:
- Navigate to your ‘Manage Returns’ page.
- Click on the ‘Contact Gift Recipient’ button.
Communicating with the Original Buyer
In rare cases, you may need to contact the original purchaser. To do this:
- Head over to the ‘Manage Orders’ page,
- Click on the buyer’s name beside ‘Contact Buyer.’
- The ‘Customer’s Email History’ will appear, showing the correspondence for the relevant order for the buyer and the gift recipient.
Processing the Gift Return Refund
Once the return has been received, you can refund the gift recipient. Go to your ‘Manage Returns’ page and click on the ‘Issue Refund’ button. The refund will be issued to the recipient as an e-gift or electronic gift card.
If it’s necessary to refund the original purchaser, go to the ‘Manage Orders’ page and click on ‘Refund Order.’ Remember, it’s crucial to ensure that you’re refunding the correct party to maintain customer satisfaction.
Managing Potentially Hazardous Returns
Certain returns might contain potentially hazardous materials. These items carry a warning signifying their potential risk. These types of returns require your manual authorization before the buyer can complete their return and send the item back. Ensure you have the right facilities to receive such items and communicate with the customer to guarantee they have proper shipping and hazmat labels before shipping the item back to you.
Also Read: Dropshipping on Amazon: What are its Pros and Cons?
Conclusion
As we conclude this guide on Amazon’s return policy, please remember these key takeaways:
- It’s vital to be vigilant about potential scams, taking the necessary precautions such as using a trackable shipping method, keeping accurate product descriptions, and maintaining prompt communication with customers.
- Know when and how to issue a tax refund and be clear about the tax collection obligations based on whether you or Amazon manages the tax.
- Be clear about when to charge a restocking fee and how much. Remember, it can vary based on the condition of the returned item.
- Gift returns require careful handling to maintain privacy and satisfaction for both the gift giver and the recipient.
Adherence to Amazon’s return policies can significantly contribute to maintaining a healthy seller account. It can help you avoid potential pitfalls and disputes, ultimately leading to a smoother business operation and happier customers. After all, excellent customer service is a cornerstone of successful selling on Amazon.
