Amazon's New Refund Policy is Shaking Up Small Businesses and Here's Why

Amazon's New Refund Policy is Shaking Up Small Businesses and Here's Why


Amazon is forcing prepaid returns on all marketplace sellers in an effort to please buyers and sellers are furious.

Amazon recently sent out an email to all third party sellers informing them of a new and enhanced returns policy. According to this email shared by an Amazon seller, Amazon is set in having all third party sellers comply with their own return policy in which buyers returns are automatically authorized. What this means is that all customers on Amazon will be able to print a prepaid shipping label through the Online Return Center instantly and mail their items back to the seller.

Currently, items purchased through Amazon third party sellers can be returned via USPS or Amazon Locker, but buyers would be responsible for paying the return shipping fees. With this new return policy in place, buyers will basically get free returns in a hassle-free manner. Amazon has yet to release an official post on the change but when this new return policy falls into place, the cost would be immense for all small business sellers on Amazon.

Moreover, the email also states that Amazon plans to introduce something called “returnless refunds” which they deemed “highly requested” by sellers. Returnless refunds will enable automatic refunds without requiring the items to be shipped back to the retailer. It is believed that sellers requested this feature to avoid return shipping charges incurred by large and heavy items. In regards to returnless refunds, a seller responded, “And Amazon is going to assume that a buyer would NEVER lie about the reason for the return so they don't have to pay for it.” If the new feature goes unmonitored, it is feared that this could lead to seller abuse.

However, the good news is, returnless refunds will be optional for all sellers. If a seller should so choose to enable returnless refunds, they will have full control over a set of rules (of their own making) that buyers must abide by before their return is accepted. This does beg the question of whether Amazon is going beyond their means to accommodate customers while neglecting the best interest of their sellers.

The newest returns policy will go into effect on October 2, 2017. A few key details from the email states that “You might be responsible for the cost of return shipping in accordance with Amazon's policies.” This suggests that although sellers are required to issue a refund for the product(s) purchased, Amazon may be handling the return shipping fees themselves. Additionally, after August 31, 2017, sellers can specify items in their inventory that are exempt from prepaid returns which should allow for more control on the seller’s side. More on exemptions, “It says we can exempt 50,000 SKUs for various reasons including cheaper shipping costs available. That's probably the exemption I will use.” Sellers will also have the ability to repeal return disputes through Amazon.

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