The Ins and Outs of the Amazon Refund Policy for Sellers

May 4, 2022
Written by Mark Salvania
amazon refund policy

Refunds are instances where customers return their purchased items to sellers while asking to get their money back. Sellers can’t control customers’ reactions to their dissatisfaction with their products and services, so they should not be too surprised if some people would ask for them.

In online selling, refunds are normal and unavoidable. And in a place as big and customer-centered as Amazon, there are bound to be many of them. Therefore, every seller should be prepared to handle such situations to avoid long-term issues. Of course, learning the Amazon refund policy is easier said than done, but it’s a great experience that benefits your e-commerce business.

With that said, here is a helpful guide to refunds that every seller should know.

The Amazon Refund Policy

Amazon’s refund policy is quite complicated, so we’ll try to explain it as simply as possible. We’ll give a thorough breakdown below for easy comprehension.

For FBA Sellers

For this section, we’ll focus on FBA sellers first. However, these refund policies don’t apply to third-party sellers, so it’s best to discuss them separately.

How Buyers Ask for Refunds

When buyers ask for refunds, they should return their purchased items first before Amazon processes their requests. They typically follow these steps to ensure a thorough process:

  1. Log in to your Amazon account.
  2. Proceed to the Returns & Orders section.
  3. Look for the item/s you want to return in your order list, and click the Return or Replace Items link.
  4. State your reason for returning the item/s.
  5. Select your preferred refund method.
  6. Choose your preferred option for returning the item/s.

It usually takes Amazon around two weeks to receive and process customer returns. Once the carriers hand the item/s over to the Returns Center, Amazon needs three to five business days to process them. After completing the processing, they issue the refunds to the customers’ chosen payment method.

Buyers who don’t like waiting for returns to be processed can go for the Instant Refunds option if it’s available. The refunds either go to their credit cards or are issued as Gift Card balances. Customers should still return their purchased products within 30 days if they prefer this option.

Refund methods and amounts may vary when buyers return their item/s. Financial institutes need extra time securing the funds as well. Customers should also need to check the turnaround times online to keep themselves updated.

For Third-Party Sellers

Buyers asking for refunds from third-party sellers should contact the sellers first. Reaching out helps sellers decide how to give better refunds or provide a more convenient process than Amazon has. 

A friendly suggestion for third-party sellers: offer a friendly refund policy for great seller ratings. The simpler it is, the better it is for buyers. You want your customers to trust you, so creating a clear policy is the least you can do to build that. Make sure it’s easy to find for their convenience.

refund calculation

Changes Sellers Need to Know 

Amazon changes its refund policy for better efficiency from time to time. As a result, it works differently from the Amazon Prime refund policy, which requires a longer discussion. 

However, we’d like you to take note of these adjustments to prevent and protect your brand from problems down the line.

Buyer-Initiated Order Cancellations

Some sellers tend to overlook cancellation requests due to many Buyer-Seller messages in their inboxes. So starting last May 10, Amazon made things simpler by implementing the following:

Seller Central users

  • Every buyer-initiated cancellation request will appear in a banner on the Manage Orders section.
  • The Buyer-Seller messages will no longer receive notifications.
  • Sellers using Order Reports for processing can now enable the Buyer-Requested Cancel field to spot cancellation requests in reports.

API users

  • Sellers can now use the List Order Items API to view customer cancellation requests. Amazon has added two fields that developers can import and surface on their end.
  • Sellers can continue canceling orders through file uploads or API feeds on Seller Central upon importing buyer cancellation requests.

Despite these changes, sellers will still receive email notifications for every buyer-initiated order cancellation request. They must also continue using the Buyer-Seller messages tool to reach customers. Advise your buyers to cancel their orders on the Your Orders page if they make a cancellation request via message.

Refund at First Scan for Seller-Fulfilled Returns

This change applies to sellers using the Prepaid Return Label program. Items returned through the program immediately become eligible for this feature. If you’re an FBA seller, RFS is required.

RFS does not require sellers to rush their refund processing within the two-business day SLA. Instead, buyers will get their refunds after the first carrier scan that has them dropping off or shipping back the item/s through an Amazon prepaid return label. Amazon will continue notifying sellers through emails for every RFS-processed refund.

The Amazon refund policy and the return policy will apply to RFS-eligible orders’ refund amount calculations. In addition, RFS-issued refunds will also be eligible for SAFE-T reimbursements if sellers get damaged or materially different items due to buyer faults.

Seller-Fulfilled Refunds Workflow

This update lets sellers calculate shipping and restocking fees on Seller Central. Thanks to this change, they also get to grade their returns’ conditions. With all these, refund processing becomes easier for sellers.

Before charging for restocking fees, consider the item’s product type and condition. For example, let’s say you get a return that’s slightly damaged. When that happens, grade the item as soon as possible. If the restocking fees reach or exceed 20%, sellers must upload a photo of the return. Amazon will use its abuse detection mechanisms to stop sellers from getting bad returns.

Don’t forget to issue a refund within two business days upon receiving the return. Ignoring this leads Amazon to declare the return as “Sellable as New” and give the auto-refund to the customer. Sellers could file an appeal to the store if they carried out an unauthorized refund on your behalf.

Final Takeaways

Ideally, sellers should not have to worry about refunds and returns. However, picture-perfect scenarios don’t happen every time. And with that, every Amazon seller should familiarize themselves with its refund policy to better prepare themselves for such situations. This preparedness will make you a credible seller to curious buyers.

If you’re feeling a little lost about your “refund policy Amazon” search, don’t worry about it. Many sellers have been in your shoes, so you’re not alone in this situation. However, if you need a helping hand, don’t hesitate to reach out to us here at Seller Interactive. Our experts will give you the guidance you need. Just leave us a message at [email protected] to get things started.

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