Starting October 26, 2021, Amazon will feature a free return message on all seller-fulfilled Fashion items offered on the platform. This means that if you’re an FBM or SFP seller, you won’t be able to deduct the return shipping fee for Fashion items listed in the United States.
This will not only be costly and bothersome to sellers, but it will also encourage buyer fraud (as if we don’t have enough of those already).
Amazon’s new returns policy is specifically for Fashion items—at least for now. But sellers in other categories should prepare for a similar change sooner or later.
How It Works
Amazon immediately authorizes a return that a customer initiates through the Online Return Center (ORC) if it falls within the scope of the Amazon Return policy. The customer will then be given a Prepaid Return Label, which will be paid by the seller.
An email notification will then be sent each time a customer requests a return and receives a prepaid return shipping label.
Starting October 26, 2021, sellers will no longer be able to deduct the return shipping fee for these prepaid return labels for Fashion items. This will include Apparel, Shoes, Handbags, Jewelry, and Watches.
However, this applies only if the seller has a US return address. Otherwise, the seller has two options:
- Provide prepaid return shipping labels for their international return address
- Issue a returnless refund
Needless to say, this is highly disadvantageous to sellers because they’ll be the ones footing the bill, not the customer nor Amazon.
What Made Amazon Decide to Offer Free Returns on Seller-Fulfilled Fashion Items?
More Like FBA
Amazon wants to make seller-fulfilled orders offer the same convenience that FBA does. They even included a reminder that Fashion item orders fulfilled by Amazon already offer free returns.
“We would like to take this opportunity to remind you that our Return Policies already require Selling Partners to have return policies that are at least as favorable as the Amazon return policies.”
In their Returns, Refunds, Cancellations, and Claims policy, Amazon requires that sellers ensure a timely refund.
“To ensure a consistent experience for buyers, you must match or exceed Amazon's return policies. When we calculate the returned product delivery time, we take into consideration that carriers might scan the package up to 24 hours prior to actual delivery to your facility. If a buyer received reimbursement after filing an A-to-z Guarantee claim and you believe the reimbursement should not have been made, refer to Appeal an A-to-z Guarantee claim to appeal the decision.”
Amazon likes its customers to have a consistent experience on the platform, so they require sellers to match or exceed its own return policies—and it’s not cheap to do so.
Sellers will have to account for these additional shipping costs. They can make up for it by raising their prices or by going into FBA.
If you choose the latter, we have a course dedicated to FBA beginners.
Customer Satisfaction
As with anything Amazon, the center of the universe and the reason for almost any major decision is customers.
“Amazon Fashion customers are not fully satisfied with the current return experience of seller-fulfilled orders,” the announcement read. So to keep the Flywheel moving, the Everything Store is requiring all seller-fulfilled Fashion orders to offer free returns.
This category has the most number of product returns because in many cases, customers will realize that clothes don’t fit or they were expecting them in a different color. In Episode 339 of the EcomCrew podcast, our guest talked about a customer who was super angry after receiving the correct shirt size she ordered when it didn’t fit her.
According to Nosto, 21% of product returns in the US in 2020 were clothing items, and 6% were Bags and Accessories. So basically, Amazon just made it mandatory for FBM and SFP sellers to offer free returns on the most returned category.
How Much Will Sellers Pay for the Returns?
The consolation is sellers will be able to make use of Amazon-negotiated rates with integrated carriers within Buy Shipping Services. The rates are calculated based on the size and weight of the product. You can find the shipping costs for seller-fulfilled returns here.
If you can negotiate a lower returns cost, you can check out 3PLs in the United States that offer returns processing.
Not the First Time This Year
This isn’t the first disappointing Amazon announcement that targets seller-fulfilled orders this year.
Earlier this March, it was announced that starting April 15, buyers from MFN and SFP sellers are given the option to choose either a refund or replacement if they receive products that are damaged, defective, or different from what they ordered. If they opt for a replacement, they can send back the item using a prepaid return label if they do so within seven days from purchase.
This means that before receiving the returned item and before getting the chance to examine if it was really the original item that was returned, sellers have to process the replacement.
And if sellers have the exact item in stock and in the same condition as the original order but for some reason refuse to send a replacement, they can cancel it. However, doing so will affect their cancellation rate.
More Opportunities for Return Fraud
Free returns will make it easier for buyers to return empty boxes or boxes filled with dirt in exchange for a full refund. Recently, a scammer was found to have duped Amazon for $300,000 after taking advantage of its return policies.
The National Retail Federation reported that in 2020, $428 billion in merchandise was returned, and 5.9 percent of that (around $25.3 billion) was fraudulent.
So FBM and SFP sellers are now required to pay for shipping returned Fashion items, and the new Amazon policies released this year make it harder for them to ensure that the customer really sent in the original product delivered.
Final Thoughts
There are many reasons why sellers opt to fulfill their own orders and not go for FBA. However, with Amazon enforcing policies that require them to offer the same benefits as the ecommerce giant, it’s getting harder and harder to remain competitive.
What do you think of the new policies? Have you ever received a returned item that wasn’t what you originally delivered? Share it with us in the comments section below.
