Get ready to navigate Amazon’s new return policy for sellers

28 August 2024
Ben Mathew

Amazon recently introduced a new Return Processing Fee (effective June 1, 2024) that targets items with high return rates, and it's causing quite a stir. This fee is designed to increase costs for items that have a high return rate. According to Amazon, the threshold is 10% for most categories, but it varies significantly. For example, in the Toy Store category, the threshold is a mere 4.7%, while in the Sports Store, it's 8.7% (category-wise return rates covered below). This means sellers in these categories are likely to see an increase in return fees. As an Amazon seller, staying informed about policy changes is crucial for maintaining your profitability and customer satisfaction.



The real culprit behind the high return rates is Amazon's overly generous return policy. Customers can return items for any reason, often at the seller's expense. This includes scenarios where customers order multiple items to see which one they prefer, use an item for a while and then return it for a new one, or even return a different item altogether.

Return Rate Threshold (Effective June 1, 2024)

Why Are Return Rates So High?

Customer Indecision

Many customers order multiple versions of the same product, only to return the ones they don't prefer. This kind of indecision is one of the key factors driving up return rates, especially in categories like clothing, footwear, and accessories.

Temporary Use

Some customers purchase items with the intent to use them temporarily and then return them. This is particularly common with high-ticket items or products needed for a short period, such as during events or holidays.

Strategies to Mitigate the Impact of the New Return Policy

Implement a Rebate Program

Offering a rebate program for customers who keep their purchases can reduce return rates. Rebates can incentivize customers to think twice before returning a product, thereby lowering the overall return percentage for your items.

Enhance Product Listings

Improving your product listings by providing more detailed descriptions, high-quality images, and accurate sizing charts can help reduce return rates. When customers have a clearer understanding of what they are purchasing, they are less likely to return items due to unmet expectations.

So what can sellers do?

One suggestion is to implement a rebate program to incentivize buyers to keep their purchases. For example, offering a 10% rebate to customers who don't return their items after the return window closes could help reduce return rates.

Another approach is to improve the accuracy of product descriptions and images to ensure customers know exactly what they're buying. This could help reduce returns due to misunderstandings or unmet expectations.

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Ben Mathew, Amazon Expert

Ben Mathew is a co-founder at Superfuel, a sales assistant for Amazon sellers. In the past, Ben and his team of e-commerce specialists and software engineers have launched 40+ new brands on Amazon, taking them from zero to bestsellers. In his free time, he is either learning from other top sellers or encouraging his 3 daughters in their love for reading. He is reachable at ben [at] superfuel.io.