Amazon’s new policy is “ferocious” and will destroy sellers’ product lines!

Amazon issued a notice to remind sellers that the fee adjustment for products with high return rates will take effect soon . This policy has attracted the attention of many sellers, who believe that the fees have become too complicated and it is difficult to predict the specific fees to be charged . Because some returns are not something that sellers can control at all, sellers have to pay high return fees, and some of their peers have suffered huge losses as a result.

Amazon mentioned in a recent announcement that starting June 1, updated return processing fees will apply to products with high return rates ( excluding clothing and shoes ) as part of the 2024 fee changes for the US site, and fees will be charged after every three-month period.

The platform claims to be doing this to help sellers better understand returns and return rates and identify steps that can be taken to limit the risk of incurring return processing fees.

However, sellers do not seem to be "buying it". There are many complaints about this return fee. The main complaint is that returns are not under their control. Some problems may be caused by Amazon, and some may be caused by buyers. However, the platform attributes all the problems to the sellers and makes them bear these losses. Before charging sellers these ridiculous fees, the platform should take the following issues into consideration.

First, many errors are clearly caused by Amazon, but sellers have to pay for them

Many sellers believe that Amazon should exclude their own mistakes when calculating return processing fees. Possible mistakes made by Amazon include sending the wrong product, not arriving on time, damage during shipping, etc. These mistakes can easily lead to returns, and the responsibility lies with the platform itself, and they happen more often than the platform thinks.

"My Amazon logistics return shows: Amazon damaged; Amazon delayed shipment. It was clearly Amazon's fault, so why does it think it should be charged for its own mistake? Why isn't Amazon paying me for my lost profits?" a seller questioned.

Second, the convenient return policy leads to a high return rate among buyers.

Many returns on Amazon are caused by buyers accidentally ordering the wrong item. Amazon's new policy is "fierce" and destroys sellers' product lines! A pet clothing seller complained: "Some buyers directly buy all sizes, try them one by one, and return the ones that don't fit. This return rate is not for nothing!"

Another seller said that we will also be charged if the return reason is:

reject?

I accidentally ordered the wrong item?

Did I find a better price somewhere else?

Unwanted items?

The product doesn’t match the description on the website (when the seller is not the listing creator or brand owner, but just one of many suppliers who has no control over the listing content)?

The seller is distressed that he is already heavily penalized for returns (lost shipping costs, customer damaged /stolen product, price reduction, etc.) and these additional “thresholds” set by Amazon’s new return policy are too arbitrary.

Many peers believe that Amazon's return issues will cause losses to a large extent. In view of this new policy, there are several "fatal" points.

First, everyone is wondering: Should refund orders that buyers do not return be included in this amount? Should refusal to ship be considered Amazon’s fault?

Second, there is a sometimes suspiciously high percentage of "rejected" orders, which are refunded without returning the item. One seller said, "We lose $5-8 on small items around $50 each time a customer asks for a refund but doesn't return the item."

Finally, return fees, which Amazon never covers, can add another potential expense, especially when a refund is reversed, Amazon may recoup the full payment from the customer and effectively charge the shipping fee twice. This seems excessive!

In fact, the core reason for Amazon's high return rate is the platform's return policy. According to industry insiders, after rounds of survival of the fittest, most sellers now sell products without obvious quality defects, so there is actually very limited room for optimization. Whether it is standard products or non-standard products, no mature seller has ever been heard of how to reduce the return rate after optimization.

Most of Amazon's return rates are caused by the platform's overly convenient return policy, which is basically due to subjective reasons of buyers . For example, due to the convenience of returns, some buyers place orders directly without carefully looking at the product information displayed on the listing details page. Even if there is no problem with the seller's product pictures and details, it will lead to a large number of returns.

Third, Amazon frequently abuses returns

Many sellers have encountered the problem of abuse of returns on Amazon. Some customers return the products after using them, especially after Christmas every year, when there will be a large number of returns. The sellers cannot sell the returned goods again, but the buyers receive a refund.

eMarketer predicts that the number of e-commerce returns in the United States will be higher than before the epidemic at least until 2026. By 2026, the number of returns may grow to 113 million.

How do we deal with bad buyers who repeatedly buy, steal, and send back knockoffs? This is the issue that everyone is more concerned about. One seller reported that an abusive buyer only bought a few a day and then returned them for reasons such as "small", but the product was not the original product. Amazon put these things back to FBA, no one checked them, and then sent them to other buyers, who were definitely more dissatisfied, which caused the return rate of some of our ASINs to reach more than 40%, destroying the entire product line because of returns.

Later, the bad buyer who made repeated purchases was reported, so he closed his account and re-registered, but the abuse of returns would not stop, and now this is his third account.

The problem is there is no place to report buyer theft in FBA to "report abuse" to Amazon . As a seller not only do you get hit with buyers abusing returns, you also have to pay fees for excessive returns.

What’s even more frightening is that there are some competitors with similar purposes who maliciously purchase products, resulting in a high return rate and affecting the seller’s performance and ranking weight.

It is understood that Amazon's upcoming return policy includes three dimensions: the number of returns and the return rate percentage used to calculate fees; the minimum return rate threshold, above which fees will be charged; and the number of returned units that exceed the threshold that must be charged.

The return processing fee is calculated for product returns starting from the month the product was shipped and ending two months later. For example, for a product shipped in June, returns will be tracked for June, July, and August. The fee is only charged if the total number of returns for products shipped in that month exceeds the threshold for a specific product fee category. If the return threshold is exceeded, the return fee will be charged for each item returned beyond that.

In addition, for products with fewer than 25 units shipped in a month , the updated return processing fee will not apply that month. For products participating in the new selection program, the fee will be waived for the first 20 units returned that exceed the return rate threshold.

The updated key points are summarized as follows: 1. A return processing fee will be charged for each return of clothing and shoes and hats categories; 2. The return processing fee for other categories is only charged for those returns with a return rate above a given threshold, not all returns; 3. The return processing fee is calculated by weight and volume, which is basically similar to the calculation method of disposal and recall fees, with tiered pricing starting at $1.78.

Some sellers shouted to Amazon: "Do you want to make it easy for customers to buy and try products, and let us bear the cost of returns, or do you want to punish us? Or do you want us to have excess inventory and continue to punish us with excess storage fees? Will I be punished for breathing?"

The new return policy actually requires sellers to share the cost of the buyer experience promised by the platform. If the platform really wants to reduce the return rate, the most important thing to adjust is the return policy for buyers.

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