New returns policies have Amazon sellers fuming

Dive Brief:

Amazon recently rolled out a new policy of automatically authorized returns for its Marketplace sellers, aligning the return policies of its third-party sellers with its own, according to CNBC. The switch, which applies to sellers who do not pay Amazon for its third-party services, means that customers can ship back items without contacting the seller first to work through product issues before paying for a refund. The change has many sellers livid, according to the report.
The e-commerce giant has also established “returnless refunds,” which Amazon said is meant to save sellers the hassle and expense of actually taking an item back if it’s small and inexpensive enough to let go. “Is this a joke?” one seller said on an Amazon seller forum. “In other words, customers get things from us for free!” But that policy is optional for sellers, and came about at sellers' request, according to statement from Amazon emailed to Amazon. Plus, customers do not know ahead of time whether a product qualifies for a returnless refund, an Amazon spokesperson told Retail Dive in an email.
"These new features allow sellers to reduce time and cost associated with returns while providing customers with an easy and efficient return experience," Amazon said in a statement emailed to Retail Dive. "When a customer knows that a return will be easy, they are more likely to purchase a product from a seller. Automated returns are applicable to in-policy returns only and sellers can receive exemptions to have specific inventory excluded. Additionally, the ability to have refunds without a product return is a highly requested opt-in feature that can be cost-effective for many sellers; sellers can choose to participate if it makes sense for their business."

Dive Insight:

Returns are a costly headache for retailers, and a nuisance for shoppers. Getting an item back to a retailer for a refund is a source of anxiety for some — enough to prevent a purchase, according to research from post-purchase solutions firm Narvar. (Although the flip side is sweet: Shoppers prone to returns are also the most likely to buy again.)

But returns are no longer simply for merchandise that hasn’t worked out — they’re increasingly a part of the shopping experience, particularly online. Nearly half (48%) of shoppers surveyed said they had returned an online purchase in the last year, according to Narvar. Another half (49%) of shoppers check a retailer’s return policy before completing an online transaction.

Amazon’s own site is an easy-return zone, and the e-commerce giant is even piloting a Prime Wardrobe service that would allow Prime members to order three items or more and only pay for what they keep. But half of the merchandise sold on Amazon comes from its Marketplace, leaving a disconnect in customer experience on the platform.

Sellers are grumbling, to say the least. “It proves that Amazon has no clue what the business issues are,” said one. “Probably are result of the work of the same idiot who created the Return Dissatisfaction Rate (RDR) which provides better ratings for sellers with lots of returns than sellers who sell good products on well written catalog pages and provide excellent customer service, so they get few returns.”

That level of consternation could be a boon to Walmart, which has made an effort of late to build its own marketplace. Many merchants depend on Amazon for more than 80% of sales, and Amazon's dominance has many of them worried. Feedvisor found that more than half (52%) are concerned Amazon will take away their privileges, half are worried about high fees and 45% are scared that Amazon will compete directly with them.