Amazon Refund Without Return – What You Need to Know as a Seller
The highly customer-centric nature of Amazon has, for one, made the e-commerce giant a household name. Secondly, it has provided sellers from all over the globe with a platform that is teeming with potential buyers. As wonderful as this is, anyone who has been selling on Amazon for a longer period will know that high customer-centricity can also lead to one or the other headache. One of the more controversial topics in this regard is the Amazon refund without return policy.
In this article, we will explain what it is, why it was introduced, and how you, as a seller, can actually benefit from this refund method – given the right conditions.
Be sure to check out our blog if you want to find out more about the topic of Amazon reimbursements for FBA sellers.
What is the Amazon Returnless Refund Policy?
Basically put, ‘refund without return’ or the ‘returnless resolution’ is an Amazon policy where the buyer receives reimbursement for an item without having to return said item. Yes, you read that correctly, they get to keep the item and their money.
This might sound unfair at first, but professional e-commerce sellers will know that this policy has already been used for years by Amazon – quite successfully if we might add – for two reasons. The first reason is that customer-friendly policies such as these attract more potential buyers to the platform, which in turn is also beneficial for sellers. Secondly, it also offers sellers the option to circumvent costly returns for items that are complicated and expensive to ship and restore. But of course, that is not the whole picture, as there are also several obvious drawbacks to this concept, specifically for sellers.
Amazon Refund Without Return – Pros and Cons
When the returnless refund concept was added to the refund policy on Amazon in 2017, Amazon stated that it was “highly requested” by sellers. The very heated discussion that ensued afterwards, however, paints a different story. Sellers accused the e-commerce leader of enticing buyers to scam them out of their items and further criticized that this would mean the end of small businesses. Now, five years later, returnless resolutions are still ongoing but the process is still as controversial as ever. Let’s take a closer look at the pros and cons to see what’s behind these arguments and whether you personally can draw a benefit from it.
As already mentioned above, Amazon stated that the returnless refund was requested by many sellers themselves. Here are some of the reasons for this.
While brick-and-mortar stores experience a return rate of below 10 %, the e-commerce business has a return rate of 20 % to 30 %. This high return rate is of course connected to a lot of costs which can be circumvented if the buyers simply keep the return items. Here are the most prominent examples of why sellers would rather make use of the Amazon refund without return policy
- Labor costs: specifically shipping, restocking, and warehousing.
- Unsellable goods: sometimes the merchandise returns in an unsellable state, leaving you with the cost of shipment, return, and scrapping of the item. This is the case for certain fashion items, beauty products, and foodstuffs.
- Faulty merchandise: an item may not be completely unusable but damaged enough for the buyer to request it to be returned. The costs of shipping, return and replacement are naturally footed by the seller. In this case, simply refunding the customer would be more economical for you.
- Reselling the merchandise: once the faulty product has been returned to the warehouse, repair costs, repackaging, and reselling costs (ergo marketing, shipment, possible customer support) have to be carried out by the seller.
Improved Customer Relations
Sellers are not the only party for whom returns can be nerve-wracking. In case of a return, buyers are the ones that have to print out the shipping label, and bring the item back to the post office only to then wait another 3 – 5 days for the refund or new item to arrive. This may leave the customer with a negative impression of your company and hinder him/her from returning for another purchase. Sellers that offer their customers the option of refund without return on Amazon, however, leave a positive impression and may come to mind the next time the customer needs something.
Moreover, customers will tend to leave a negative review after they have had a bad experience while buying one of your products. Be sure to respond to these reviews in the best way possible in order to communicate how important customer-centricity is to you. Find out here how to deal with negative reviews.
More Brand Awareness
Everybody knows that word of mouth is a very effective way to gain visibility for your products and company. Once word gets around that you value your customers, you can expect more people to buy your products. Even better: the product you “gave away” is maybe handed down to a friend or family member who will end up becoming a new customer of yours.
A Sound Ecological Alternative
There is no need to stress the importance of this topic in this day and age and using the Amazon refund without return policy as a seller is a way of contributing directly and effectively. Once again you could also communicate that the ecological component is one of the reasons why you support the Amazon refund without return policy and through this build a greener brand image.
As you can imagine, many sellers contradicted the idea of returnless refunds. Here are the main drawbacks that you may face once you apply this concept and also what you can do to keep these drawbacks at a minimum.
In a dynamic and multifaceted environment like e-commerce – and especially on a popular platform like Amazon – you will always have to deal with malicious actors on both sides. Be it sellers leaving you scathing reviews because they want to hijack your customers, or buyers looking to take advantage of your business model. The fact that Amazon issues a refund without the buyer returning the item will of course attract a lot of scammers looking to receive free stuff. It is just too easy to claim that a shipment did not arrive at its destination (even though it did) or that the item was heavily damaged upon arrival (even though it works perfectly fine) and then pocket the refund.
However, Amazon keeps a close eye on buyers who do this conspicuously often and blacklists these customers after they reach a certain limit. You as a seller can also support Amazon by reporting suspicious cases of buyers where returnless refunds become a repetitive pattern.
While you may be saving costs on expensive return processes, you will be losing money at some point if too many customers take advantage of the Amazon refund with no return policy. The good news is that you can configure the way your returnless resolutions are handled on Amazon.
There are two ways you can go about this: Either set the specific criteria for whom you want to offer returnless resolutions for returns that meet certain criteria in Seller Central
or offer returnless resolutions for specific SKUs only
Note: Sellers that fulfill orders in the US from outside the US have to provide a valid return address within the US if the item costs less than $25. If this is not provided, Amazon will issue the customer a refund for eligible returns without requiring the item to be returned (Returnless Resolution).
Amazon Refund Without Return – Best Practices for Your Amazon Business
Returnless refund items and how to handle them are financially relevant factors that you should take into account when developing your business strategy. Here are some best practices.
Monitor Customer Purchase History (Non-FBA Sellers)
Depending on how often a customer requests a returnless refund, you can choose to rescind that option for that particular customer once you start suspecting foul play. A good indicator is the repeated use of arguments that are difficult to prove, for example: “nobody rang my bell”, “no package was ever delivered”, “There is a note saying that my neighbor has my package, but it doesn’t say who.”
This concept naturally goes two ways: if you normally don’t offer returnless refunds to your customers, you can choose to do so for particularly loyal customers and take your customer relations to the next level.
Monitor Returned Items (FBA Sellers)
Just because Amazon issued a refund without return for one of your sales, that does not mean that you have to accept it and not investigate if you think that you are dealing with a scammer. Even if a return is not foreseen in a particular case, you can request it from Amazon and inspect the product. If the condition of the merchandise and the customer report don’t add up, inform Amazon. You can do this by using the “report buyer” feature on Amazon or contacting them directly in Seller Central (“Contact us” → “Other” → “Report violation.”)
FYI you will have to pay for the return yourself in cases like these.
Monitor the Process (All Sellers)
As a first step, be sure to save all relevant information pertaining to the reimbursement. You will receive a notification mail from Amazon regarding the refund without return, save that for future reference when you contact seller support. Moreover, be sure to save all correspondence that you had with the client that may help your case should you report him/her to Amazon for exploiting the returnless resolution process.
Amazon Refund without Return – Does it Suit Your Business?
Now that you have a good understanding of how the concept works, you will know that this business model is suitable for you under the following circumstances:
- You sell low-cost items whose return, repackaging, and reselling are less economical than a returnless refund.
- You want to improve your customer relations.
- You monitor all your processes and customers closely and can therefore easily weed out scammers and report them to Amazon.
Is the returnless refund a great way to attract customers and save processing costs? Absolutely. Does it open a gateway for fraudulent conduct? Yes, a pretty big one at that. The policy that Amazon offers a refund without having to return the item is a very sharp double-edged sword and sellers can either wield it to their benefit but also feel a very deep cut in their margins if they don’t watch out and monitor the processes closely which will help them identify and distinguish scammers from regular customers.
Momentarily (August 2022) Amazon refunds are covered by Amazon and/or the Amazon sellers. This may change quite soon, however, which is why we recommend you inform yourself on Seller Central or check with Amazon before making any decisions.
As one can imagine, the Amazon refund without return process is very consumer-friendly. All it takes is an Amazon account and a call or an email to Amazon’s customer service stating that you did not receive the item. If this happens regularly, however, your Amazon account will be suspended and in severe cases, an investigation will follow to prove fraudulent conduct.
They do not. However, that does not mean that they do not track and blacklist customers where a repetitive pattern of returnless resolutions (which may indicate malicious intent) occurs. If for example a customer repeatedly claims that they did not receive their package, their Amazon account will be suspended temporarily..
Images credits in order of appearance: © DragonImages – stock.adobe.com / © screenshot – amazon.sellercentral.com / © screenshot – amazon.sellercentral.com