Last updated on October 30th, 2023
Written by Mohamed Aden
Online shopping has dramatically grown in recent years, and with it comes the challenge of managing product returns. As the biggest eCommerce company today, Amazon handles a significant amount of customer returns daily. As a seller, you must be asking, “What does Amazon do with returns?” The answer lies in Amazon's return policy.
Amazon offers various options for returned items through this policy, including repackaging and restocking for resale, liquidating, and disposing of them. This approach highlights Amazon’s customer-centric mindset, focusing on cost analysis, return reduction strategies, and maintaining superb customer service.
We'll discuss all these in detail to ensure that you know the ins and outs of Amazon returns. You can use the knowledge to minimize them to increase your profit and grow your business.
Amazon's return policies are designed to ensure customer satisfaction and trust in the shopping experience. Online shoppers and store owners should know the general return policies for most items sold on the platform. Here are some details you should remember:
Product category and whether the seller uses Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM) dictate the return window and requirements. Nevertheless, Amazon generally accepts returns within 30 days after the product was delivered to customers.
It's important to note that some items, like digital downloads, gift cards, and certain perishable items, cannot be returned. Additionally, third-party sellers like you may have your own return policies, which customers should review before purchasing.
Amazon offers a variety of return options to cater to customers' needs. They can return their items by mail, through an Amazon Locker, or in person at an authorized retailer. While shipping costs may apply in some cases, there are instances where Amazon covers the expenses, such as when the item is defective, damaged, or incorrect.
Returned items are typically sent to an Amazon warehouse and may be available for purchase again if they meet the necessary requirements. Some items may also be refurbished and resold through the Amazon Renewed program.
Other options for returned items include liquidation through e-commerce liquidation websites, donation to charitable organizations, or, in rare instances, disposal of items that cannot be reused.
When managing returns, Amazon aims to minimize costs for customers, third-party sellers, and the company itself. Amazon does the following steps.
For more details about Amazon product disposal, check this video out.
As an e-commerce giant, Amazon handles a significant volume of returned items. To minimize costs and maintain customer satisfaction, they follow a systematic process for repackaging and restocking these products.
When a customer decides to return a purchase, Amazon first provides them with a shipping label to send the item back to the appropriate fulfillment center. Upon receipt of the returned product, Amazon's team inspects it to ensure it complies with its return policy.
Amazon employs strategies to give returned products a "like-new" appearance. The Amazon FBA Repackaging Service specializes in repackaging products to meet Amazon's requirements, particularly for items returned by clients that were in good condition but couldn't be directly resold.
It's essential to note that Amazon has distinct return policies for items fulfilled by Amazon (FBA) and third-party sellers. Return shipping costs are managed differently depending on your relationship with Amazon.
For FBA sellers, Amazon handles shipping contracts and carrier agreements, offering significant savings. If you handle your products’ fulfillment, you can also save on shipping costs for returned items by effectively managing shipping contracts with carriers and contract carrier agreements.
After repackaging and contract checking, returned items are evaluated and restocked in Amazon's warehouse. This process allows the company to regain inventory control and maintain pricing tiers.
The impact of returns on your business can be significant. Managing returns effectively is crucial for maintaining a successful online retail business. By employing liquidation and reselling strategies, you can regain control of your inventory and minimize the financial impact of returns. Let’s check how both work.
E-commerce liquidation websites like B-Stock Solutions, Liquidation.com, Quicklotz, GenCo Marketplace, and Bulq, play a crucial role in the liquidation process. Websites like these allow third-party sellers and online retailers like you to purchase liquidation pallets containing returned items, overstock, and refurbished products at discounted prices.
To recover some loss, sellers can then resell these items on their websites or other marketplaces.
For returned items in good condition, Amazon offers these two reselling options.
When items are returned, Amazon uses this opportunity to gather valuable data that can be leveraged to improve your products and customer experiences. This section will explore how Amazon uses return data for product analytics and customer insights.
Amazon leverages return data by analyzing the reasons for the returns. Some of the product issues you'll see here are defective items received and flaws on the product design. Addressing these concerns can refine your product offerings, please your customers, reduce return rates, and increase your sales.
Customer insights from returns can also be instrumental in shaping your product selection strategy. By understanding what aspects of your Amazon products customers were dissatisfied with, you can adjust your inventory to prioritize items more likely to meet customer expectations.
Additionally, insights from returns can be used to make informed pricing decisions, ensuring that customers perceive the product's value to be in line with the cost.
Amazon's customer service and communication strategies around returns emphasize convenience, transparency, and support for you and your customers. The elements below create a seamless return experience and leave customers completely satisfied in the competitive e-commerce space.
Amazon's customer service approach for returns includes a dedicated 'Returns and Replacements' area, making it easy to navigate and find answers to your questions. This allows customers to avoid emailing or chatting with support teams and have a seamless experience during the return process.
Amazon ensures fast and transparent communication between you and your customer during the returns process. They provide frequent notifications on the return status, helping customers stay informed about their refund or replacement. This transparency is key to maintaining trust and fostering a positive relationship between Amazon, who represents you, and your customers.
Amazon recognizes the importance of providing customers convenient return options. Many products come with a prepaid, printed return label, while some can be returned without a box or label at designated locations such as Kohl's, UPS, and some Whole Foods stores. Moreover, the company offers free returns on eligible items, enhancing customer satisfaction.
Another aspect contributing to Amazon's customer service is how they support sellers like you. Through FBA, Amazon handles everything from customer services, receiving the returned items, processing them, and deciding whether they are to be resold, refurbished, disposed, or donated.
Although returns are common when selling on Amazon, it still pays to keep it low to avoid additional costs. Here are some of the strategies you can do to minimize returns.
To reduce return rates, provide detailed product information to ensure you set the correct customer expectation. Be truthful with all your claims, and never include product characteristics customers will not see or have once they purchase your product.
Here are more tips on how you can better optimize your listing:
Prioritize customer service to reduce product returns. Ensure prompt and accurate communication with buyers and offer timely resolution to any issues or concerns. By addressing customer needs effectively, you can enhance customer satisfaction and minimize the likelihood of returns, ultimately promoting a positive shopping experience on the platform.
Create shipping contracts that help manage the large volume of returned items. This not only ensures smoother operations but also leads to significant savings. You should consider establishing carrier contract agreements with shipping partners, like how Amazon does, as it can greatly reduce shipping costs.
Data-driven decisions play a vital role in optimizing return-related costs. Amazon's success in this area can be partly attributed to using tools like AWS Cost Optimization which can help you identify areas where adjustments can be made to improve cost efficiency. Incorporating data analysis and utilizing effective cost-management tools can also be a game-changer for your e-commerce business.
Sell returned items that cannot be sold again to liquidation websites. As a business owner, you must explore this option to regain control over returned inventory or donate eligible overstock to charitable organizations, transforming a potential loss into a win-win situation.
Understanding what Amazon does with returns and how to manage them effectively is crucial for Amazon sellers. When customers return items, various factors influence the handling of those products, including refurbishing, reselling, liquidation, donation, and disposal.
To ensure you stay in control of your inventory and returns, we here at Seller Interactive provide Amazon Reimbursement & Refund Services. By aiding in claiming reimbursements for damaged or lost items, we can ensure that you have the necessary evidence, such as inventory reports, images of damaged products, or proof of customer returns.
Book a call with us now. Let us help you regain control of your return process, minimize costs, and maximize your profits.
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