One of the unfortunate parts of owning an eCommerce business is that, at some point, you’re going to be dealing with returns.
For Amazon sellers, this can be double the bad news. For starters, you will usually lose on the return, secondly, if you get too many returns you can end up losing your good standing with Amazon. More than one seller has found themselves suspended for having too many product returns.
You’re not going to avoid having returns, but what you can do is mitigate the potential loss as best as possible. Let’s look at a few pointers for dealing with product returns:
What happens when a product is returned?
A plus of being an FBA seller is that you don’t deal with the returns yourself, it’s part of the FBA service. You should however, be aware of the returns process and keeping an eye on your account. Discrepancies have been known to happen and it’s up to you as the seller to notice and contact Amazon over it.
First of all, your customers usually have 30 days to request an item return, then 30 days after that to ship the item back to Amazon. It works as an “honesty” system because Amazon will debit your account for the purchase price and sales taxes, and will refund the customer as soon as they request the return. If the product hasn’t been returned within 45 days though, Amazon should be debiting the buyer again and crediting back the seller.
The condition of the returned item
Assuming the customer did return the product within the required time period, what happens next comes down to the condition of the item and the reason for it being returned. Here’s a quick break-down:
The product is damaged – If the product is returned due to it being damaged, what happens next is dependent on the cause of that damage. If the damage occurred in the FBA warehouse or in transit to the customer due to being poorly packed, then you will be eligible for a reimbursement from Amazon. If they determine that the item was damaged due to something on your end (for example, the product you sent to Amazon wasn’t wrapped properly), then it’s on you. Note: Amazon’s refund covers products with a replacement value of less than $5k. This should cover most sellers, but anyone with products over that value is advised to get added insurance.
If the product was damaged by a carrier during shipping to the customer, you should be getting reimbursed for that too.
The product is sellable – If the product is deemed to still be sellable, then Amazon will generally put it back into your inventory. Depending on the circumstances of the return, you may want to check for yourself that the product really is sellable, in which case you will need to issue a removal order to Amazon to have it taken out of inventory and sent to you.
Customer damaged – This doesn’t always mean “damaged”, but that the customer has indicated that they opened the product. It’s possible that if you check the product you may find that you could sell it as “very good condition”, “new” or “like new.” (Again, you’ll have to create a removal order and have the item sent to you).
Defective items – Sometimes the item really is defective, so the return is fair enough. Any defective items are returned to your inventory as “unsellable.” It is worth requesting the item to inspect for yourself though, many customers have caught onto fact that they aren’t charged for the return shipping if they say the product is defective. This has lead to a number of products being returned which are actually in new condition.
Take action over returned products
Check that it was returned
First of all, you should be checking that the customer actually has returned the product within the 45 day time limit. If they haven’t, then Amazon should be reimbursing you for the money they already debited from your account.
You can check whether Amazon has sent a refund to the customer by logging into your Seller Central account, then going to Reports > Fulfillment > Returns. If you can confirm that the customer was refunded on the Payments report, you then need to check that the product was returned.
This is a multi-step process:
- Copy the order number of the refund.
- Go to Manage Orders > Advanced Search in your Seller Central account.
- Paste the order number in the search bar and click “search.”
- The next page will show you which item was returned from the order – copy the SKU or ASIN.
- At the top of the page go to Inventory > Manage FBA Inventory.
- Paste the SKU or ASIN in the search bar and click “search.”
- If you’re not seeing the item there, click the button for archived items.
- You should now be able to see if the item is in your inventory.
If the item isn’t there, it doesn’t necessarily mean it wasn’t returned. Sometimes a sellable item may have been returned and immediately sold again – you won’t necessarily know this. You can check up on the item by opening a case with Amazon and asking them to check on the return. They will either let you know it was returned to inventory or that they will reimburse you because it wasn’t.
Manage your inventory
If you’ve got inventory that has been returned as “damaged” then it will be sitting in your “unsellable” inventory. Don’t leave this there for too long. You are being charged for all inventory that is being stored regardless of whether or not it can be sold. Your options are to either a) check it and have it moved into sellable inventory if it’s fit to be sold b) make any repairs necessary to put it back into inventory or c) pull it from inventory and write it off.
If returns, particularly claims for defective products are becoming a common pattern, it’s time to review the product and ensure that quality standards are where you’d like them to be. Amazon is big on the customer experience and if a seller gets too many “defective” complaints, may take action to suspend your account.
It’s possible that you may have received a bad batch from the manufacturer in one of your orders. Things do go wrong from time to time with manufacturing, which can lead to faults or weaknesses with a product. Check new orders as they come in, but also take note of any defective complaints that come up. Customer experience should be important to you too so you don’t want to continue selling something with a known weakness. This would be a case where you should go back to the manufacturer. If they’re reputable and value your business, they should sort it out for you.
Check your product descriptions
Are customers getting what they expect to receive if they go by the product description? Keep a close watch over reviews, feedback and returns to see what people are actually saying. If you’re getting returns because the product didn’t meet their expectations, it’s probably time to review your listing and fix up anything which may be unclear.
If all of this sounds too time-consuming for you right now, consider whether monitoring product returns might be a good tasks to give to a VA.
You can expect product returns as a normal part of selling online, but it’s always a good policy to monitor returns closely to ensure that:
- The product is actually returned.
- You are credited for returns which the customer doesn’t send in.
- Sellable products are available in inventory.
- Products which aren’t sellable are removed so you’re not paying for storage.
- You are aware of any quality issues.
There are many tales of Amazon sellers who have found that they have sellable inventory sitting under “damaged” or that they are owed refunds which haven’t been processed. Besides that, keeping an eye on your returns helps you to better serve your customers and stay in good-standing with Amazon.