Success factor for Amazon sellers: Understand and reduce return rate
For most online retailers, it is a key performance indicator: the return rate. However, for many Amazon sellers, it has not played a significant role so far – especially for resellers who primarily offer commercial goods and focus more on customer satisfaction and complaint avoidance. However, the return rate is much more than just a pure indicator of customer satisfaction. It has a direct impact on profitability, Buy Box opportunities, and ultimately on the overall account health of an Amazon seller.
For one thing is certain: Amazon measures and evaluates every single KPI value, from the selling price to delivery time to the return rate. This data is incorporated into numerous internal evaluation metrics – for example, in the algorithm that decides which seller appears in the Buy Box or which products are favored in the ranking. Therefore, a high return rate can not only reduce profits but also indirectly lead to ranking losses or warnings in the seller account.
Especially private label sellers should understand the return rate as a strategic competitive factor. While keywords and content optimization play a visible role for the A10 algorithm, return metrics operate in the background – quietly but measurably. Those who manage this proactively not only improve their margins but also strengthen Amazon’s trust in seller performance.
In this article, we will show you how Amazon evaluates returns internally, which metrics are crucial, and what strategies you can use to sustainably reduce your return rate – without jeopardizing your conversion rate.
How does the right of withdrawal work on Amazon?
Amazon is absolutely customer-oriented. The focus is always on the perfect customer experience. This also includes that customers can return ordered goods relatively easily to the online giant, as long as they do so within the return period set by Amazon. Because in the end, it is worth it: The assurance that they can return practically anything to Amazon and the satisfaction that a smoothly processed return generates among customers make the relatively high return rate not a big problem for Amazon: The avoidance of risk for the customer leads to significantly higher order numbers.
Accordingly, a quite straightforward system has also been established.
For marketplace orders, the online retailer may need to give their okay beforehand. Then this return will also count towards the return rate of the Amazon seller.
In general, online shoppers can return items to Amazon within a 30-day return period. The return policies include various types of returns. Defective items, for example, can be returned up to two years after receipt of the goods, while other items such as food may not be returnable at all. Marketplace sellers can define their own conditions for an Amazon return – these must, however, “at least correspond to Amazon’s return policies.”
What is the average return rate on Amazon?
In general, the return rate on Amazon is higher than in other online retail – not least because the e-commerce giant offers particularly generous return policies to its customers. However, it is difficult to provide a blanket figure, as the rate strongly depends on the product category and payment method.
The University of Bamberg has shown in a widely cited study several years ago how different return probabilities can be. According to this, the alpha return rate (referring to packages) in mail order – including on Amazon – is significantly above the industry average, especially for fashion items.
| Product category | Return probability (Alpha rate) |
| Consumer Electronics | 18.6 % |
| Fashion | 55.7 % |
| Media/Books | 11.5 % |
| Consumer Electronics | 13.7 % |
| Fashion | 44.1 % |
| Media/Books | 8.1 % |
In comparison: Recent surveys by the EHI Retail Institute (2024) show that particularly in return-intensive categories such as clothing or shoes, values of over 40% are not uncommon. 28 percent of online retailers receive back more than one in four sold products.
The costs per return should not be underestimated either. On average, each return incurs costs of around 7.90 euros, depending on the return volume of the seller:
| Number of returns per year | Average processing costs per return |
| < 10,000 returns | 17.70 € |
| 10,000 – 50,000 returns | 6.61 € |
| > 50,000 returns | 5.18 € |
These values show that a high return rate directly impacts profitability – especially for smaller sellers without economies of scale.
How does Amazon measure the return rate?
Amazon distinguishes between different metrics. For FBA sellers, the “Customer Return Rate” is automatically displayed in Seller Central and is included in the evaluation of product performance. Additionally, Amazon uses metrics such as the Return Dissatisfaction Rate (RDR), which assesses how often buyers rate a return negatively or submit a return request. For FBM sellers (Fulfilled by Merchant), processing times, refund rates, and customer communication are also factored into the evaluation.
As a result, this means: An excessively high or poorly managed return rate can not only reduce margins but also jeopardize account health. Therefore, it is in the interest of sellers to actively analyze and strategically manage returns – both for economic and ecological reasons.
3.0 Amazon’s internal return handling & logistics
The return process at Amazon is largely automated and aims for maximum customer satisfaction. Once a return is received, Amazon first checks whether the item is sellable or unsellable. This decision has direct financial implications for the seller – especially for FBA products.
3.1. Process of an Amazon return (FBA)
Amazon marks such returns in Seller Central under FBA Remittance Reports and indicates whether the item has been classified as sellable or unsellable.
3.2. Differences between FBA and FBM
| FBA (Fulfilled by Amazon) | FBM (Fulfilled by Merchant) | |
| Returns Processing | Completely through Amazon | The merchant is responsible themselves |
| Control over Returns | Limited | Complete |
| Processing Fees | Return fee + storage costs | Own logistics costs |
| Evaluation by Amazon | Impact on Account Health and Inventory Performance | Impact on Customer Satisfaction & ODR |
While FBA merchants benefit from the convenient Amazon returns management, they partially lose control over the condition and refurbishment of the items. For FBM merchants, the process is more labor-intensive but offers the opportunity to specifically inspect defective or opened products and potentially reuse them.
3.3. Restocking and Refurbishment
Amazon regularly checks whether returned items can be restocked for sale. Strict requirements apply to certain product categories (e.g., electronics or personal care). Products that are still sellable automatically receive the status “Sellable” and reappear in inventory.
For unsellable items, merchants have the following options:
This process is economically relevant: If a high percentage of items are classified as “unsellable,” return processing costs increase, and at the same time, inventory metrics (e.g., Inventory Performance Index, IPI) deteriorate.
3.4. Impact on Merchant Metrics
Each return can potentially affect several internal metrics:
High values in these metrics negatively impact Account Health and Buy Box probability. Amazon assumes that merchants with low return rates offer higher quality products – and rewards this accordingly.
What does the KPI “Dissatisfaction with Returns” mean?
Amazon measures not only the return rate but especially how satisfied a customer is with the return process. The customer experience is considered negative when
Of the total returns of a marketplace seller, a maximum of 10 percent should be classified as negative. A higher negative return rate penalizes Amazon with a significantly reduced probability of winning the Buy Box. Ideally, this KPI even tends towards zero percent.
Detailed information on which metrics are decisive for the Buy Box can be found here: The key criteria for winning the Buy Box.
4. Returns as Amazon Metrics & Performance Factors
Amazon evaluates seller performance not only based on sales or ratings but through a complex system of metrics that is directly linked to visibility, ranking, and the Buy Box chance. Returns play a larger role in this than many merchants assume.
4.1. The Key Amazon KPIs Related to Returns
In the area of returns, Amazon distinguishes several metrics that contribute to what is known as Account Health and seller rating:
| Meaning | Critical Threshold | |
| Return Rate | Proportion of returned items to total sales. | Depending on category & product type |
| Dissatisfaction with Returns | Proportion of return requests with negative customer feedback, unanswered messages (>48 hours), or incorrectly denied requests. | Max. 10% |
| Rate and Order Issues | Share of faulty orders (negative reviews, A–Z Guarantee, chargebacks). Returns are included indirectly. | Max. 1% |
| Refund Rate | Ratio of refunds to total sales. | No official limit, but benchmark <5% |
These KPIs are continuously measured and can individually lead to the blocking of offers or even the deactivation of the seller account. Particularly, the share of returns with which customers were dissatisfied is crucial: Amazon assumes that a high share of dissatisfied returners indicates poor product quality, inadequate descriptions, or insufficient support.
4.2. Indirect influence on ranking and Buy Box
Amazon does not communicate transparently how much weight return metrics have in the algorithm. Nevertheless, analyses from marketplace optimization tools and merchants show:
This is because Amazon pursues two goals when awarding the Buy Box:
The lower the return rate and the smoother the return process, the better the chances for preferred placements.
4.3. Influence on Account Health and Seller Status
For professional sellers, the return rate is also an indicator of stability within the Account Health monitoring. The following consequences are possible:
The latter provides sellers with insight into the level of customer satisfaction per ASIN. If a product is regularly marked as “Defective” or “Not as described,” it falls under “Poor” or “Very Poor” – a risk for listing deactivations.
4.4. Relationship with ACoS, profitability, and inventory metrics
High returns affect not only the ranking but also business metrics:
Professional sellers should consider these relationships in their performance analysis and also understand the return rate for Amazon products as an early indicator of problems – similar to drop rates in conversion or CTR.
In this context, Amazon sellers cannot avoid analyzing their finances. However, since manual data analysis often proves to be very complex, many of them rely on a software-based solution to avoid high expenses for experts and save time. Thus, SELLERLOGIC Business Analytics – a profit dashboard specifically designed for Amazon sellers – provides a detailed overview of return costs and other relevant product data in a single tool. And this goes back up to two years from the time of your registration and nearly in real-time.
With SELLERLOGIC Business Analytics, you can track the loss or profit development of a product at the level of an Amazon account, as well as at the level of an entire Amazon marketplace. The tool allows you to identify unprofitable products, as well as expenses that need optimization (such as costs incurred from returns), and make timely decisions.
Strategies for Reducing the Return Rate on Amazon
Returns are not only a cost factor – they influence visibility, profitability, and the seller account. Professional sellers must therefore understand why customers return items and systematically counteract this.
These measures are the foundation of every successful Amazon business:
5.1. Cause Analysis: Why Customers Return
The first step is a structured analysis of the reasons for returns. Amazon provides several data sources for this purpose:
Tip: Create an internal “return ticket” for each product, categorizing each return (e.g., “size does not fit,” “item defective,” “wrong description”). This way, you can identify patterns and take targeted countermeasures.
5.2. Optimize Product Page – Avoid Returns Before They Occur
One of the most common causes of returns is overly high or inappropriate customer expectations. Therefore, the product page is your strongest tool for prevention. Ensure that product images and videos realistically and in detail represent the product – for example, regarding dimensions and application scenarios. Clear, honest information about material, function, compatibility, scope of delivery, etc., in the title, bullet points, and description is essential to create realistic expectations for the product.
A+ content is particularly important, as many customers study it more closely than the product description. Visualize usage, dimensions, and common misunderstandings (e.g., “not compatible with…”). Especially in fashion, sports, and pet supplies, size charts and fit information are helpful.
Tip: An A/B test using the Manage Your Experiments (MYE) tool can show which variants result in the lowest return rate.
5.3. Quality Assurance & Packaging
Many returns result from actual product defects or transport damage.
Therefore:
5.4. Product Development & Supplier Management
High return rates on Amazon are often symptoms of underlying product issues. Sellers who think long-term incorporate this topic into their product development: Analyze which features (e.g., color, size, function) frequently trigger returns. With these insights, you can then contact manufacturers and suppliers to work together on solutions. These could be, for example, variants that eliminate typical criticisms (such as more durable seams, better fit, more accurate measurements).
Test small batches before ordering large inventories – especially for private label products. This way, you can limit the financial investment while still obtaining data on the impact of the adjustments.
5.5. Advanced: Data-Driven Returns Management & AI
Advanced sellers use data models, machine learning, and flexible policies to proactively manage returns.
5.6. Prevention of Return Fraud
Return fraud is a growing problem in the Amazon ecosystem – especially with higher-priced items. Professional sellers should take preventive measures. This includes documenting serial numbers and unique identifiers to identify swapped returns. Regularly reviewing FBA reports also helps to identify implausible return reasons (e.g., “wrong item,” “not received”).
In addition, there is the option to request photos in case of suspicion to verify a return reason such as “item defective” before approving the return. Recurring abuse can also be reported to Amazon.
By the way, Amazon also warns customers with a return rate that is too high. In extreme cases, customer accounts can be suspended. However, there is no set threshold at which the online giant takes action, nor has it ever been made public. It is likely to take some time before a customer account is closed.
Conclusion: Returns cannot be prevented
The return rate on Amazon is more than just a KPI – it is a strategic lever for profitability, ranking, and account health. While many sellers initially focus on price, shipping, or reviews, it becomes clear that a high or poorly managed return rate can not only shrink margins but also impair Buy Box opportunities and Amazon’s trust in the seller.
Professional sellers must therefore analyze the causes of returns in detail, optimize product presentation, ensure packaging and shipping quality, and systematically evaluate customer feedback. Advanced measures such as predictive analytics, AI-powered returns forecasting, or dynamic return policies allow for data-driven management and prevention of returns. At the same time, potential fraud cases should be actively prevented, and internal metrics should be continuously monitored.
The return rate on Amazon remains an unavoidable part of online commerce. However, it is crucial to understand, analyze, and manage it strategically. Those who implement this consistently not only protect the profitability of their products but also strengthen the long-term performance of their accounts, customer satisfaction, and competitiveness on the Amazon marketplace.
Frequently Asked Questions
The return rate of an online retailer indicates how many of the orders are returned by the customer. The University of Bamberg also defines the alpha return rate as the probability of a package being returned versus the beta return rate as the probability of an item being returned.
This depends on various factors such as the category. For example, the University of Bamberg records a rate of around 14.5% of returned items in the electronics sector. In the fashion industry, however, researchers arrive at a result of up to 46% of returned items.
It is not possible to answer precisely how high the average return rate on Amazon is, as the company does not release any figures on this. Due to the very customer-friendly return policies, the return rate of the e-commerce giant is likely higher than in the rest of online retail.
The number of returns an Amazon seller will have largely depends on the category, type of product, payment method, and several other factors. Therefore, this question cannot be answered uniformly.
Amazon is repeatedly accused of not monitoring returns adequately. There have also been reports that returns are destroyed on a large scale, even though they were intact products.
To effectively reduce returns, retailers should focus on stable packaging, fast shipping, and detailed product descriptions. The more realistic a customer’s perception of the product is, the lower the return rate usually is, as wrong purchases are prevented from the outset.
Products with a low return rate are likely favored by Amazon in the ranking and when awarding Buy Box. However, so many factors play a role that it is impossible to say how much weight the return rate carries on Amazon.
Amazon generally offers a 30-day return policy. Conditions vary depending on the type of item and seller. Defective items have a 2-year period. Some items, such as food, may not be returnable.
Image credits in the order of the images: © Mediaparts – stock.adobe.com / © Moonpie – stock.adobe.com / © sizsus – stock.adobe.com / unsplash.com
