AMAZON.COM INC. HAS INSTITUTED A PROgram allowing customers buying from the company’s
stable of third-party merchants to obtain refunds on
orders they don’t want, while still keeping the product they ordered.
The program, known as “returnless refunds,” will
be optional for merchants, Amazon said in an e-mail
sent Aug. 1. If the merchant agrees, a refund will be
automatically issued without the consumer’s being
required to return the
item. The program goes
into effect Oct. 2.
In the memo, Seattle-based Amazon said the
program was instituted
at the request of sellers
because it would spare
them the time and cost
of managing returns shipping and processing. It
could also spur consumers to do future business
with a merchant if they
can avoid the expense and
inconvenience of returning an unwanted product.
Merchants that sell and fulfill on Amazon are rated
on a variety of metrics, including customer satisfaction with the returns process. A merchant with a high
rating generally gets more favorable search positioning on Amazon’s site.
The program may get a mixed response from the
merchants that use the company’s “Fulfillment by
Amazon” service to market, fulfill, and deliver their
products. (Amazon charges merchants 15 percent
of the selling price as its fee.) Merchants generally
set their own return shipping policies, and some
require their customers to pay for shipping unless the
returned product is defective.
Small to mid-sized merchants that must offer free
forward shipping as a condition of working with
Amazon often find it economically untenable to give
away shipping services for returns. At the same time,
it may be a hardship for merchants to refund the price
of an item and never get the product back.
One merchant that occasionally uses Amazon
assesses shipping charges on all returns except for
defective items. The merchant, which asked not to be
identified, said it cannot
afford to offer free return
shipping and would object
to losing a returned item
that could not be remarketed and redistributed.
Product returns, and the
reverse logistics engineering required to support an
efficient flow of returns,
have become big business
in the e-commerce era.
According to the Reverse
Logistics Association, the
e-commerce returns rate
is between 18 and 25 percent, roughly three times
that of brick-and-mortar stores. Returns tend to
run particularly high for online clothing and shoe
purchases because a customer might order several
different sizes to assure a fit and then return all but
Not surprisingly, return volumes spike during the
holiday season. According to Atlanta-based UPS Inc.,
holiday shoppers returned more than 5. 8 million
packages via UPS during the first week of January
2017, including 1. 3 million packages on Jan. 5 alone.
About 60 percent of consumers polled in a UPS
survey on returns earlier this year said free shipping
would be the perk they would most prize.
Don’t want to return that stuff?
Keep it, Amazon says