To Ship or Not to Ship: Does Amazon Refund Shipping Cost?

Buyer’s remorse, technical difficulties, and simple accidents are some of the reasons why returns happen in the retail industry. With the boom of online selling, so did the rise in returns and refunds. But returns and refunds for e-commerce are different than that of brick-and-mortar stores. For one, refunding the product itself and refunding the cost of shipping the item back are two different things. 

Sometimes, the cost of return shipping far outweighs the sales loss. This is partly the reason why Amazon introduced Returnless Refunds. 

Will Amazon Refund Shipping Costs? 

The answer is yes. But, the refunding of shipping costs depends on a variety of conditions.

Amazon Store will cover costs of return for products sold directly by Amazon. FBA Returns also handles customer returns for brands and sellers who opt for FBA services. However, a third-party (3P) seller who chooses to fulfill their own orders or  “seller-fulfilled”, would be shouldering the expenses for returns.

Returns and refunds also depend on the product category, state of the product, and the reason for return. Shipping costs are also dependent on your business location. As a seller, it would be wise to consult an expert team to assist you with Amazon Refund and Reimbursement Policies.

 But here are some examples of considerations to give you an idea:

Product category

Fashion items, for example, are qualified for Free Returns, wherein Amazon will charge you, the seller, for the return shipping. The cost of the prepaid return label will be charged to your seller account. The cost cannot be deducted from the total product refund. But this is only for Fashion items bought from a seller with a US-based address.

Product location

International orders require buyers to pay for the return shipping at first. You will refund your buyers after receiving the items and assessing them. Check that they are in the same condition as when the customer first received them. If the item is damaged on its way back, you are entitled to refunds and reimbursements as well.

Reason for return

If a return claim is categorized as a ‘Customer-fault’ return, you can deduct the cost of the prepaid label from the total refund to be issued. Examples of customer-fault returns include “accidental order”, “better price available”, and “I don’t want it anymore”.

What are the Different Amazon Refunding Methods?

As per Amazon policies, you have two days after receipt of the item to issue the refund to your buyer. Failure to do so will result in Amazon automatically sending the refund on your behalf and charging your seller account.

These are the following refund options available:

1. Standard Refund - where you issue the refund once you have received the item back
2. Returnless Refund - where you issue the refund while the buyer keeps the item
3. Refund at first scan - this is mandatory for FBA and seller-fulfilled orders in the prepaid label program. Refunds are automatically issued to the buyer once they have successfully dropped off the package at an Amazon center

There are also cases of partial refunds wherein the refund issued does not match the original item price the buyer paid. This happens if and when the buyer covers the restocking fees. Tax exemptions are also an example of a partial refund where only the tax issued is refunded to the buyer.

Your buyer can also choose their preferred method for refunds, provided all are within Amazon and the product’s parameters. They can check the refund methods available by going to the Online Returns Center. 

Each method or avenue will have its own corresponding refund time. But in general, returns take around two weeks to process. Then refunds are processed after the item is received. Depending on the financial institutions involved, the issued refund can take as little as two hours to up to 30 days to reflect on the buyer’s account. 

Promotional Certificates, unfortunately, cannot be used to issue refunds. Buyers can choose to be refunded thru:

1. Instant Refund - refund can be via Gift Card balance or Credit Card but the buyer still needs to return your item
2. Credit card - takes three to five business days
3. Amazon.com Gift Card - only takes two to three hours
4. Debit card - takes up to 10 business days
5. Checking account - takes up to 10 business days
6. SNAP EBT card - takes up to 10 business days
7. Gift Card balance - still takes two to three hours
8. Shop with Reward Points - takes up to five business days
9. Pay in Cash (at a participating location) - takes up to 10 business days
10. Pre-paid credit card - takes up to 30 days depending on the institution

What is the Amazon Refund Process?

No matter the reason for returns, Amazon strongly suggests the customer contact the merchant first before processing returns and refunds. Once you and your buyer have discussed the problem, only then are you advised to proceed.

You have to check if the order is a Seller-Fulfilled Prime order. If it does fall under Seller-Fulfilled Prime, Amazon Customer Service handles all post-order transactions, including customer returns. This is similar to the FBA users. 

To process returns and refunds for your buyers, simply log on to your seller account and follow these steps:

1. Go to Seller Central
2. Go to the Manage Returns/Manage Transactions page
3. Review all Return Requests
4. Choose whether to authorize or decline the requests
5. Wait for the customer to return the item
6. Process full or partial refund after receipt of the item. 

If buyers use Amazon Pay you can also issue refunds using Refund API.

1. Sign in to Seller Central.
2. Go to Orders, and then Manage Transactions.
3. On the Manage Transactions page, locate the order that is requested for a refund.
4. In the Action column, choose Refund from the options list
   1. (OR click the Amazon Reference ID link for the transaction, 
   2. A Details page will open
   3. Click Refund).
5. Enter the Refund amount in the Refund Payment dialog box. You’re free to add optional text to the Notes field. (This message will be in the refund email sent to the customer.)
6. Click Review.
7. A pop-up box will open, asking to confirm the refund.
8. A final dialog box will open, confirming the amount. Click Submit.

Note: double check your return shipping address to avoid problems with receiving the returns.You may also opt for the Returnless Refund program.

You can request refunds as well, although the better term is reimbursements. These are for when Amazon is at fault: lost item, wrong inventory, wrong charges to your account, etc. You would have to file claims and process your request for reimbursements. It’s highly recommended you get Amazon Account managers to assist you with this especially if you have multiple reimbursements.

Conclusion

To recap, a Product Refund is different from a Return Shipping Refund. Amazon Returns and Refunds depend on whether or not a product is listed as a Prime Order, its category, its reason for return, and its return address. 

Return Shipping can be refunded to the buyer if the reason for return is “Seller-Fault”. Likewise, buyers can request refunds and reimbursements from Amazon for Amazon FBA-related concerns.

Product Refunds can either be full or partial.

The process for Returns and Refunds requires effective communication with all three parties involved. Amazon Account Managers are necessary so you can navigate the different policies and conditions. 

Book a call with us at [email protected] and save yourself the headache of figuring all this out on your own.