What is Amazon Restocking Fee & How Does It Work? A 2023 Guide
Maintaining healthy margins on Amazon can be challenging. And when you have a seemingly never-ending stream of return requests to process, it could feel even more of an uphill task. We’ve a problem on our hands, ser!
But do you know you can actually withhold the refunds on certain return requests in the form of Amazon restocking fee and save on redundant expenses?
In this guide, we’ll explain the Amazon seller restocking fee in detail, including when you can and cannot charge a restocking fee to your Amazon customers, how to calculate the fee amount, steps to set it up, and more.
Let’s dive right in.
Amazon restocking fee is a charge applied on returned items by sellers for qualifying return requests. It is calculated based on the product's original price, the return reason, and the item's condition on return. The fee is deducted from the customer’s refund amount under partial refunds.
The purpose of the restocking fee is to cover the cost of inspecting and repackaging the returned item, as well as any loss in value that may occur during delivery or return. It also discourages frivolous returns for unnecessary reasons.
It’s important to mention here that Amazon's restocking fee on returns does not include the shipping fee and sellers can’t charge customers for that. You must pay for the shipping expenses from your pocket.
While Amazon automatically processes the restocking fee on behalf of all FBA sellers, FBM sellers are responsible for handling the returns manually from their Seller Central account.
Amazon allows most customers to return purchased items within 30 days of receiving their order and claim a refund. All items returned in their original condition within Amazon’s accepted return time frame are eligible for a full refund.
However, if the return window has passed or the product returned is damaged, used, or different from what was originally sent, sellers can charge a restocking fee to their customers. You must act quickly, though, and initiate the process within two days of receiving the return request.
Below is a more in-depth explanation of when you can and cannot charge a restocking fee on returns.
According to the Amazon return policy, you can charge a restocking fee to your buyers for returns sent after the 30-day window (as described above) or when the return is verified as the buyer’s fault. Common scenarios include:
You can charge up to 100% of the item’s price as the restocking fee, depending on the return reason and the condition of the returned item. We’ll discuss how to calculate and charge restocking fees on returns later.
Sellers cannot charge a restocking fee on canceled orders that haven’t been shipped yet or if the refund is verified as the seller’s fault. The return reasons where sellers cannot charge a restocking fee include:
Like regular customers, Amazon Prime customers are also subject to restocking fees. The terms and conditions remain the same. In the cases where the item is returned within the return window and in original condition, the Amazon Prime restocking fee may not apply.
What about charging the Amazon restocking fee for third-party sellers on the return of renewed items? Do they also qualify for restocking fees?
Amazon Renewed is a program where customers can purchase refurbished products that are tested and certified to work and look like new. If a customer decides to return an Amazon renewed product, they may be subject to an Amazon renewed restocking fee.
Restocking charges are generally legal, but this depends on the jurisdiction and the specific circumstances surrounding the transaction.
Restocking fee laws require that:
According to Amazon restocking fee 2023 guidelines, sellers can typically charge between 20% and 50% of the item price as a restocking fee, depending on the return reason, type of product, and the item’s condition when returned. In some rare cases, you can also charge the full amount.
The following chart explains how to calculate restocking fees for different return scenarios:
Still confused? Here’s an Amazon restocking fee example to help you understand better how the calculation works:
Let's say a customer purchases a cellphone from your Amazon store for $150. Later, they decide to return the cell phone within the specified refund window of 30 days. However, the cellphone shows signs of abuse, with the charging port damaged.
To calculate the restocking fee, you would multiply the item price by the restocking fee percentage, which in this case will be 50%:
$150 x 0.5 = $75
So in this example, the restocking fee would be $75. This means you would process a refund of $75 for the returned cellphone.
Yes, the Amazon restocking fee is the same for all marketplaces. Whether you sell on Amazon Canada, UK, or USA, the restocking fee percentage doesn’t change. However, individual sellers may have different restocking fees depending on their return policy. Amazon instructs third-party sellers to at least match its restocking fee policy.
Customers can file an A-Z claim against sellers when they are charged a restocking fee and not refunded the full order amount. However, if you are working in full compliance with the Amazon seller guidelines, you are well within your right to collect a reasonable restocking fee.
This question gets asked a lot on Amazon restocking fee Reddit threads and seller forums, where people are often confused about whether they should risk their reputation as a seller by charging a restocking fee.
There is nothing illegal about charging a restocking fee. However, anytime you are refunding less than the full order amount, it is a good practice to add a note explaining to the buyer why they were charged a restocking fee.
Refund requests made via the buyer-seller messaging service or for FBM shipments can be handled directly from the Seller Central portal. Below is a step-by-step guide on how to process return requests and charge restocking fees on Amazon:
Step 1: Go to the Manage Orders menu in the Orders tab on Seller Central and navigate to the order you want to refund
Step 2: Click on the Refund Order button in the Action column. You can also select the corresponding Order ID to issue a refund from the Order Details page
Step 3: In the Refund order window, specify the reason for the refund and the amount you want to refund. Deduct any restocking fee you want to charge before entering the final refund amount.
Step 4: Click ‘Submit refund’. Once you have submitted the refund, it may take up to 15 minutes for the data to be updated.
Amazon has a customer-friendly return policy. However, the restocking fee is an excellent tool that can help sellers prevent losing money on unnecessary customer returns.
Here are some best practices that can help you avoid A-Z claims from your disgruntled customers when charging restocking fees during refund handling:
No matter how effectively you handle the return requests, you’ll always have restocking fee disputes with your customers. However, don’t ever feel intimidated. Disputes are easy to navigate as long as you promptly involve Amazon’s customer service team and have all the relevant paperwork and other evidence to support your case.
Just make sure that you charge the rightful restocking fee that is reflective of the costs you incur in handling and restocking the returned items.
It’s completely fine to charge a restocking fee to your customers for eligible returns. After all, it’s your right. However, it’s also important to understand that most buyers hate partial returns.
For low-cost orders or customers who buy from your store regularly, you may want to skip the restocking fee and instead offer a returnless refund. This not only leads to customer satisfaction but also protects your rating and reputation as a seller.
Here is a useful guide that explains Amazon returnless refunds in detail and can help you decide if offering returnless refunds on certain return requests is a good idea.
Maintaining good margins on Amazon is tough. Amazon restocking fee is one way to save some money and get compensated for the processing and handling costs incurred due to returns. It pays to know how the restocking fee works and when you can rightfully charge it on return requests.
But managing return requests in high volumes can be overwhelming. ZonGuru’s My Orders Tool can help you stay on top of return requests, process them in a timely manner, and avoid unnecessary disputes. Sign up for a 7-day free trial and experience the difference it can make to your Amazon business.
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