Understanding the Amazon Return Policy can increase your chances of succeeding as an Amazon Seller because you'll be able to plan ahead if a return happens.
The ideal scenario is that your customers will always be satisfied, and you'll never have to deal with returns. Unfortunately, we don't live in an ideal world, and it's better to be safe than sorry, especially when you're new to selling on Amazon.
Whether you're a Fulfillment by Amazon (Amazon FBA) seller or a Fulfillment by Merchant (Amazon FBM) seller, this guide will be useful to you because we cover both of these fulfillment methods.
What Is Amazon Return Policy?
The Amazon Return Policy informs that your customers can return your products within 30 days of receiving them. However, Amazon can make case-by-case exceptions in special cases.
Let's now look at how to handle returns when you're dealing with Amazon FBA and Amazon FBM.
A) Amazon FBA Return Policy
If you are an FBA seller, you know that Amazon handles returns for you.
What Happens When An Item is Returned?
Because Amazon handles returns for Amazon FBA sellers, the returned items return to the Amazon warehouse. Here, Amazon evaluates if the items are fulfillable or unfulfillable.
If the items are sellable, Amazon returns them to your inventory, which will be sold later. If they are damaged, Amazon investigates whose fault it is. If it’s Amazon’s fault, they’ll reimburse you if they had already deducted the amount from your Amazon seller account.
You won't be reimbursed if it’s the customer’s fault or if the items got damaged during shipping.
There are three scenarios to prepare for in the case of returns. These are when the items are resellable when they are damaged, and Amazon takes responsibility, and when they are damaged and Amazon doesn’t take responsibility.
Let’s look at them in detail.
1. Fulfillable Items
This is when Amazon assesses the returned items and discovers that they are in good condition and can be resold. They will be added to your inventory and sold to the next customer.
Amazon FBA will also credit your account with part of the referral fee and may also pay the variable closing fees associated with the items.
2. Damaged Items and Amazon takes Responsibility
If the items are damaged, they will not be added back to your inventory, and Amazon will reimburse you if it takes responsibility for the damage.
If Amazon takes responsibility, it will credit your Amazon selling account with the item’s selling price, part of the referral fees, any applicable taxes, and variable closing fees where applicable.
3. Damaged and Amazon Doesn’t take Responsibility
If the returned items are deemed unsellable, and Amazon doesn’t take responsibility, Amazon credits your selling account with part of the referral fees and the variable closing fees where applicable.
You'll need to create a removal order if you want the items back in your possession.
What Happens When A Customer Doesn't Return An Item?
Your customer has 45 days to return the items. If they don't return the item, Amazon will recharge them, and you'll be reimbursed.
Amazon will reimburse you after 45 days. If they don't, you can open a support case.
B) Amazon FBM Return Policy
The process for Amazon FBM is different because Amazon doesn't handle the returns for you like with Amazon FBA.
Once you get a return request, you'll need to match or exceed Amazon's return policy. The 30-day timeline also applies to your customers, and the returns will be directed to the address on your seller account.
Once the returned shipment arrives, you have 2 days to reimburse your customer.
If you have a professional seller account, the refund process will be automated for you. This is because professional sellers are automatically enrolled in the Amazon Prepaid Returns Label Program.
This means that Amazon will send your customers a prepaid return shipping label on your behalf once they initiate a return. Amazon will send you a return request for you to review manually if the return request falls outside the accepted return window.
You can still apply for this automated program if you are an individual seller.
Let's now look at what you can do with the returned items once they're back in your possession.
What Can You Do With Your Returned Items?
It can be very painful to lose money from returned items, especially when it wasn’t your fault that the items were damaged. You end up not selling your item and incurring extra costs when Amazon has to return or destroy your goods.
Luckily, Amazon offers some interesting ways for you to save some of your money or do some good with the damaged, used, and returned items.
You can resell the items as used items, sell them to wholesale liquidators, or donate the items to charity.
1. FBA Grade and Resell
This is the option of reselling the items as used products. The FBA Grade and Resell program allows you to relist the returned items as used items.
Amazon will evaluate your items and decide if they are:
- Used - acceptable
- Used - good
- Used - very good
- Used - like new
For this grading to occur, you’ll need to submit your unfulfillable inventory into the FBA Grade and Resell program first. Once you do that and Amazon has graded the items, it will create a new listing for you.
You might not get the same profits for the items as you would had they not been returned, but it’s better than nothing. You get some money, and you prevent the creation of more waste.
2. FBA Liquidations
This is the option of selling your items to wholesale liquidators. With this method, you’ll get approximately 5-10% of your item’s average selling price. In addition, you won’t have to pay for any additional storage space in the Amazon warehouses.
This program was created to help you liquidate any excess inventory to have more storage space for new inventory. What you need to do is submit a liquidation request in Seller Central, and Amazon will determine the selling price of your product.
Amazon uses several factors to determine the selling price of your items, and you can be sure that you’ll get something for your returns. Consider FBA Liquidations if you have any used or excess inventory and want to clear that out to create room for more items.
3. FBA Donations
Unlike the other two options above, this won’t help you get back some of your money. However, it will help you make a difference in someone else’s life.
The FBA Donations program allows you to donate your returned items to selected US charities. This can be better than instructing Amazon to destroy the returned or overstocked goods.
This is an environmentally-friendly alternative, and you also get to help various nonprofits in the United States.
Another reason this is a great idea is that you can use it to get some tax benefits.
The Amazon Return Policy allows your customers to return items within 30 days. If you are an FBA seller, these items will go back to the Amazon warehouses. If you are an Amazon FBM seller, they will be directed to the address on your seller central account.
Although you won't always be reimbursed for the returns, you can get some of your money back using the Amazon programs outlined above. You can either sell some of the returned items to wholesale liquidators, relist them as used items, or donate them to charities.