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4 Tips to Streamline Your Amazon Returns and Refunds Ahead of the Holidays

Are you prepared to take on post-holiday shopping returns? Streamline the process with these helpful tips. By Catherine Ibarra October 2, 2020

Holiday shopping events are rapidly approaching. Prime Day on Oct. 13-14 is expected to accelerate holiday shopping by six weeks. As you sell your items and apply efforts to meet consumer needs during a massive Q4, the last thing you want to worry about is the high volume of post-holiday shopping returns without an established system in place.

Proactively handling customer returns and refunds instead of addressing the transactions case by case will help streamline the process. Not only can you create a fluid returns strategy by planning ahead but you can also potentially lower your return rate as a result. Ensure your business is prepared to tackle holiday returns seamlessly with these four tips.

1. Match or Exceed Amazon’s Return Policy

Amazon’s return policy offers customers 30 days within receipt of delivery to return their items. The retailer enforces a customer-first approach on returns and expects its sellers to provide fair return policies that either match or surpass its own. Sellers who do not comply with Amazon’s return policy requirements are subject to receiving an A-to-Z Guarantee claim against them.

Enforcing a fair return policy for your customers will not only ensure a good standing with Amazon but will also help establish a positive brand reputation. Customers who experience difficulties with returns are unlikely to make future purchases from a brand that was reluctant to accommodate them. Providing a defined return policy to adhere to will simplify the process and encourage your customers to continue to make purchases from your business.

2. Identify the Root Cause of Highly Returned Items

Being proactive about your returns strategy will help streamline the process and make a huge difference in your bottom line. It is estimated that retailers lose over $600 billion per year on returns worldwide, according to IHL group. Retailers in the United States alone account for $183 billion of the total cost. To achieve a healthy performance metric, Amazon recommends maintaining a return rate of less than 10% of your annual sales.

Identifying the root cause of items that are frequently returned will enable you to promptly eliminate a variable hurting your profitability. To discover the reason for the return, begin with referencing the feedback provided by your customers. After reviewing the feedback, look into factors that could have contributed, which include: suppliers, warehouses, product line managers, and more. Whether the items were defective or there were shipping issues, resolving the matter will decrease returns.

3. Determine Ideal Fulfillment for Returns

Ideal fulfillment for returns will vary depending on your business needs. Fulfillment by Amazon (FBA) is completely handled by Amazon but the returns process is extensive and costly in shipping fees. Conversely, Amazon’s Fulfillment by Merchant (FBM) option allows your customers to ship their returns directly to you, which minimizes shipping costs, but you are responsible for disposing of the returned items.

Evaluating the trade-offs of each fulfillment option for returns will help you determine the best fit for your business model. If you prefer Amazon to be more hands-on with your returns while you focus on other aspects of your e-commerce strategy, even if you will be subject to additional fees, FBA may be a good fit. If you would like to be active in your return efforts and reduce your shipping expenses to be as low as possible, FBM would be the better alternative.

4. Invest in a Refund Management Service

Investing in a refund management service can significantly increase your profit margins. Managing returns can be hectic, let alone examining whether you were properly credited for each returns-related transaction. Sellers do not always have the time to cross-reference the amount they are owed. Especially with new e-marketplace conditions, sellers are focused on remaining competitive and keeping up with consumer demand.

Feedvisor has partnered with Sellers Investigators to launch Feedvisor Refund Manager. Amazon owes money to 99% of sellers. The service can help you receive FBA reimbursement claims from lost and damaged items, refunds and mishandled returns, and lost inbound shipments. If you sign up, an analyst will review every single return to determine the amount that you are owed and contact Amazon on your behalf to issue your credit. You can allocate the credit received back into your business.

About the Author

Catherine Ibarra is a marketing consultant at Feedvisor, where she contributes to the company's content marketing initiatives. She has a technology background.

Final Thoughts

Holiday shopping is expected to begin earlier due to Prime Day. Considering this Q4 is anticipated to be the biggest to date, establishing a returns strategy prior to the holiday shopping events is critical. Having a streamlined process will enable sellers to be better prepared for returns and have more time to allocate on leveraging items from their catalog.

Taking a proactive approach in regards to returns and refunds will further contribute to the success of your business. In addition to creating a clearly defined returns process, the initiative can establish a positive brand reputation, reduce your return rate, and increase your FBA credit. Apply these four tips to reap the benefits of an enhanced returns strategy.

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