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Amazon is amending its returns policy to make it easier for customers to return items they purchased from third party sellers, Ari Levy of CNBC reports. Under the new policy, customers will be able to return such items directly through Amazon, without contacting the seller.
The eCommerce giant will also enable “returnless refunds,” meaning merchants can reimburse customers without requesting an item back. According to Levy, Amazon says sellers have advocated such a policy, which would allow them to forgo the cost and hassle of facilitating the return of an item that may be defective, expensive to ship, and/or hard to sell.
CNBC broke the news after an Amazon merchant forwarded the news agency an email he/she had received from the company. Amazon said in the e-mail that sellers will have a choice as to whether or not to offer returnless refunds on a given product, and will be able to “set rules” defining the circumstances under which a refund is issued.
Still, many sellers are expressing displeasure with the policy on the forum linked to above. One merchant said of returnless refunds, “In other words, customers get things from us for free! Is this a joke?” Another said, “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.”
The unidentified merchant who forwarded Amazon’s email to CNBC said the return policy “will totally crush small businesses that fulfill their own orders.” He/she means that the policy targets those who list items on Amazon but ship them directly to buyers without using the Fulfillment by Amazon option.
The Fulfillment by Amazon (FBA) service allows third-party sellers who meet certain requirements to make use of Amazon’s fulfillment and customer service operations. FBA sellers store their products at Amazon fulfillment centers, where Amazon employees manage packaging and shipping. FBA merchants can sell their products under the Amazon Prime banner, meaning they can offer customers free two-day shipping. Amazon charges merchants for storage space and per fulfilled order.
Amazon also handles customer service and yes, returns, for FBA members.
The coming change is another move in Amazon’s ongoing effort to provide a uniform experience for customers, regardless of whether they buy from Amazon directly or from a third-party seller.
Levy points out that Amazon’s first concern is maximizing customers’ happiness. Easing the return process simplifies the consumer experience. The new system will “provide customers with an easy and efficient return experience,” Amazon’s email to merchants said.
The new system will allow customers to print return shipping labels prepaid for by sellers, and to deal with Amazon exclusively throughout the return process.
“Certain items,” though, “are not eligible for prepaid return shipping,” according to Amazon’s email, and merchants “can request exemptions for specific items in your inventory.”
Amazon says “early participants [in the new shipping system] have seen RDR [Return Dissatisfaction Rate] go down by an average of three times after offering prepaid return shipping.” Some on the forum, though, say RDR is a skewed metric. One seller, under the username Lake, said RDR “provides provides better ratings for sellers with lots of returns than sellers who sell good products [and therefore] get fewer returns.”
“It proves that Amazon has no clue what the business issues are” from the seller’s perspective, “Lake” wrote.
Sellers who are dissatisfied with Amazon have limited alternatives, Levy points out, especially if they have already built a thriving business on the site. According to an article published on MarketplacePulse in December, 1,000 sellers join amazon.com everyday. Amazon has twice as many users (i.e. buyers) as eBay, according to a February report by Leanna Kelly of cpcstrategy.com
“Speaking strictly in terms of revenue and growth potential, Amazon blows eBay out of the water,” Kelly adds, although she goes on to admit that eBay has some “clout” by other measures.
By virtue of its number of users, Amazon has all but forced sellers to use its site. When the company, ever faithful to the retail maxim of serving the customer, makes a change that favors consumers at the expense of sellers, sellers have little recourse.
The changes will go into effect on October 2, but those who wish to can apply to begin “authorized prepaid returns” as early as August 25.