Amazon introduces refund without return: sustainable but fraud-prone

Key features of Amazon's returnless option

Fulfillment by Amazon (FBA) users only now have the option to offer refunds without necessitating the physical return of the item. This initiative is particularly beneficial for sellers dealing with low-cost items, international shipping, or products that are not worth the return logistics costs. However, there are some big restrictions. Items that are heavy, bulky, classified as dangerous goods, or priced above US$ 75 are not eligible for this program.

Conditions

Both sellers and customers must meet specific criteria to participate in the Returnless Resolutions program. Sellers need to be in good standing with Amazon, while customers must not have a history of return abuse. If a customer is deemed ineligible, they will be required to return the item as usual, with the process reverting to traditional fulfillment center protocols.

Benefits for sellers

The new program offers several advantages. Sellers can reduce their operational costs by cutting out the reverse logistics process, which involves shipping, inspecting, and restocking returned items. This is especially important as Amazon continues to adjust its fee structure, increasing costs for products with high return rates (excluding apparel and shoes) as of June 1.

Gopal Pillai, Amazon’s Vice President of Worldwide Returns and Recommerce, emphasized that the Returnless Resolutions program is a cost-efficient solution that increases convenience for both sellers and customers. There are no additional fees associated with the program, making it an attractive option for many businesses looking to streamline their operations and improve their bottom line.

New trend

Amazon is not alone in adopting this approach. The "keep it" returns option is becoming increasingly popular among retailers, particularly for lower-value items. A 2023 report from goTRG, a returns management solutions provider, highlighted that this trend is on the rise as companies seek to reduce the expenses and environmental impact associated with reverse logistics. However, we also see some downsides. Sure, this is a very customer-friendly and sustainable policy, but will it also be cost-effective? The cost of handling returns is high and close to an all-in price tag of US$ 75. Key to the success of this new option, will be Amazon’s way of dealing with abuse. This needs to be extremely tight and Amazon can’t allow any failures.

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