How to Reduce Your Amazon FBA Product Return Rate?

How to Reduce Your Amazon FBA Product Return Rate?

Amazon is buyer-centric. Every seller knows that. Check out its return policy, and you’ll understand just how much privilege buyers have on this platform. If a buyer decides to return a product, they can simply click ‘Return or replace items,’ provide a reason (legit or not), and voila, Amazon will grant that request. There are no detailed stipulations included.


That said, this system is one of the reasons buyers love Amazon. Have you ever wondered why Amazon has twice as many buyers as eBay despite selling similar products for higher prices? It’s because buyers feel safer on Amazon, knowing they can get their money back if something goes wrong with their purchase.


Merchants benefit from this system, too, since more buyers mean more sales. You just have to up the ante to ensure your products satisfy your buyers enough not to hit ‘return.’ How to do it? That’s what this article covers. We’ll also discuss why buyers return products, why a refund is better than a chargeback, and the circumstances when Amazon might favor sellers.


Why it’s a MUST to Have a Generous Return and Refund Policy


As an Amazon seller, Amazon’s return policy applies to you, so there’s nothing much you can do. But let me break it down so you understand why having a generous return and refund policy could work in your favor.


  1. It will cost you less than a chargeback.
  2. It preserves the opportunity to make a counteroffer that might prevent escalation.
  3. If the returned product is intact, you can fix the issue and resell it.
  4. Returns and refunds reduce the chance of getting bad reviews.


Despite Amazon’s leniency toward buyers, not all products can be returned. Amazon has identified non-returnable items here. Still, if you’re selling any of these products, Amazon’s return policy may work against you because it leaves buyers with no other choice but to request a chargeback. Also, only return or replacement requests within 30 days from delivery are valid.


What Makes Buyers Return Their Products


Understanding why buyers return your products helps you evaluate and refine your Amazon business. Maybe your products need a little bit of touch-up, your process is too complex, or your product descriptions fall short of crucial details. The reasons vary.


Because Amazon cares little about the legitimacy of a buyer’s reason for returning a product, you’ll encounter different reasons, some as absurd as the next. For example, a buyer can return your product if they found a cheaper alternative or if it arrived a day late. As unreasonable as it sounds, Amazon may still deem it valid.


Some buyers take advantage of Amazon’s leniency to rip you off. The wardrobers, for instance, will pretend to purchase your product, but once they’re done using it, they’ll send it back and request for a refund. But don’t worry because Amazon has a counter-policy against fraudulent acts like this.


Most return and refund requests are valid. For instance, it’s likely you sent them the wrong product, the product was damaged during shipping due to poor packaging, or the product was defective to begin with. These are the ones you should take note of and prevent from recurring.  


What happens if your products keep returning?


Return rate, more specifically known as return dissatisfaction rate, correlates with performance, and Amazon is keeping track. If your return rate exceeds 10%, Amazon may suspend or terminate your account. Does this mean you’re safe as long as your return rate stays below 10%? Of course, NOT.


Amazon can penalize you in many other ways if your performance keeps dwindling. For instance, you may lose the Buy Box in your listings, which may result in reduced sales. Amazon’s algorithm is also designed to prioritize performing product listings. This means your products may be pushed down the obscure sections of results pages and never to be seen again. 


What You Should Do to Minimize Your Return Rate


Fortunately, there are ways to boost your sales while simultaneously preventing returns and refunds. Every Amazon seller needs to know them before they start listing products.


  1. Only sell high-quality products: Defects are the number one driver of product returns. It’s also the worst reason, as it is almost always followed by a one-star rating or a long, business-ending review. Sellers must maintain a below 1% order defect rate (ODR) to prevent Amazon from reducing their visibility or suspending their accounts.


  1. Use reliable packaging: Sometimes, even if your products are of premium quality, they can arrive at the buyers’ doorstep damaged due to poor packaging. Always follow Amazon’s packaging guidelines if you’re using FBM or, a much better option, use Amazon FBA. Of course, you have to prep your products using the best packaging available so that when Amazon boxes them for shipping, they’ll remain stable.


  1. Make your description detailed: Be as detailed, specific, and straightforward as possible when writing your product descriptions. Include exact sizes, shapes, colors, and other descriptions that can give buyers a good sense of what to expect. Lay off the fluff and be straight to the point when explaining what your products can and cannot do.


  1. Use lots of images and videos: Support your description with clear images and video clips. Include a combination of still and lifestyle images to show buyers how your products are used and how big they are compared to objects around them. Photograph your product from every angle to reveal its every detail. It’s also an excellent way to show potential buyers you are not hiding anything. Make sure that your images match what you claim in your description. Add infographics, posters, and size guides that further explain the components and functions of your products.


  1. Let satisfied buyers do the talking: Encourage your buyers to leave reviews, especially if they like your products. Remember that 74% of buyers check reviews and ratings before purchasing. If your products are filled with reviews, prospective buyers will know what to expect even without contacting you. Never, for a second, think of faking reviews. If your buyers find out through their experience with your products that your reviews are all made up, your deception will backfire, and it’s game over for your Amazon business.


  1. Use the latest repricing tool: Many buyers return products after seeing similar products that cost a few dollars less. You can avoid this if your prices are within the competitive range. Even if it’s a little higher, as long as the price difference isn’t worth the effort of returning the product, you’ll be fine. Investing in a repricing tool can help you adjust your prices based on real-time Amazon data.


What if it’s Amazon’s fault?


If the product returned to Amazon is not in a condition suitable for resale, Amazon will investigate to find out if the damage was caused by a mistake in shipping or by manufacturing. If it's a shipping mistake, Amazon will refund both you and the buyer. If it's a manufacturing defect, you'll need to refund the buyer.


What about perishables?


Perishables belong to restricted categories that require certification to ensure they meet the highest quality standards. It is highly unlikely that they’ll get returned. However, if they do get returned, the best thing you can do as the seller is not to require your buyers to return them. After all, if the issue has to do with the product’s quality or condition, it will only get worse during shipping. Just refund the buyers and move on.


Refund vs chargeback


A frustrated buyer might ask their bank for a chargeback, which makes the bank reverse the transaction, refunding the buyer's payment and leaving the merchant empty-handed. Additionally, the bank might raise its chargeback ratio. To prevent this, follow the tips mentioned and have a fair return and refund policy in place.


Protect Your Amazon Business by Preventing Returns and Refunds


Amazon takes care of stores that follow its guidelines to the letter and do everything to elevate the consumers’ buying experience. Even though returns and refunds are regular occurrences on the platform, they only affect businesses with little to no commitment to quality. If you provide high-quality products and keep your seller rating stellar, you’ll keep returns in check.


You can also protect your account by using the return-tracking features Amazon provides. It is designed to identify buyers who abuse the ‘return’ option, allowing you to negotiate with them directly or block them altogether.

Back to blog