According to a survey, 92% of customers are happy to buy again from a store if they find the return experience positive. However, handling returns could be expensive, especially when you sell online such as on the Amazon marketplace where products can often qualify for free returns.
How do you then make sure you offer what your customers want without it being a liability on your store’s already-stretched resources?
That’s where Amazon allows sellers the option of returnless refunds!
Returnless refunds on Amazon are special types of refunds that allow sellers to compensate customers for incorrect or damaged orders without requiring them to send the product back. Sellers can either choose to issue a full refund or replace the product with a new one from inside the Seller Central returns dashboard.
Bear in mind though, returnless refunds are optional, and you don’t necessarily have to sign up for them. In fact, you can even select the products you want to offer returnless refunds against.
Processing returns on Amazon can be costly. As a seller, you must pay for the return postage. If you do FBM, you need to check whether the returned item can be resold or should be discarded. All this takes time, money, and labor. By offering returnless refunds, Amazon allows sellers to save up on resources and run their stores efficiently.
Returnless refunds also enables Amazon to reinforce its vision to be a customer-centric company. People can shop carefree, knowing that if something goes wrong, they can get a full refund without worrying about returning the product.
All Amazon marketplaces offer returnless refunds. So, whether you sell in the US, UK, Australia, or India, you can opt-in for returnless refunds from inside the Seller Central.
The Amazon returnless refund system works on a set of predefined rules. These rules basically specify criteria for products eligible for a returnless refund in an Amazon store and are set up by sellers.
Whenever a customer files for a return, Amazon checks if the case qualifies for a returnless refund and issues the refund on the seller’s behalf. The amount is automatically deducted from their account balance. All orders placed before the creation of the rule are processed normally.
You can set up returnless refund rules for an entire product category or specific items within it. More on this later.
Amazon will process all returnless refund requests except for handmade and non-physical items, sexual wellness products, dental and medical supplies, certified pre-owned watches, hazardous and dangerous goods, and Amazon Custom articles. You must handle these requests manually through the buyer-seller messaging system. The same applies to returns requested after 30 days.
Besides the returnless refund option, there are two other types of refunds available on Amazon: i) prepaid returns and ii) free returns.
Prepaid returns are where your customers don’t have to pay for the postage upfront. They can simply get a prepaid shipping label from Amazon, fix it on the product, and send it back to you. Once you receive the product, you can process a partial refund, deducting the shipment cost from your customer’s final refund amount.
In contrast, free returns allow customers to get a full refund on returned items. You can choose to offer free returns on all, some, or none of your products. However, fashion items come with a mandatory free return option, except for luggage and bags.
Amazon takes 1-2 business days to process returnless refunds after the submission of the refund request. This is pretty quick compared to normal refunds that can take up to 5 business days after the item is received.
Technically, there is no returnless refund limit on Amazon. However, the e-com giant monitors return requests from customers regularly to make sure the policy isn’t being abused. It is believed Amazon bans customers who have a return rate of over 10% for their total orders. Of course, this may vary from case to case.
Even though returnless refunds may seem useful mostly for customers, they offer plenty of benefits to Amazon store owners as well.
We’ve already briefly talked about this earlier. Processing returns costs money. You must pay for the return shipment, especially when there is a case of a faulty product or incorrect order delivery. These instances are quite common when selling on Amazon.
Even when you know you have sent the right product, customers can always find a reason to complain to Amazon, leaving you with no other choice but to oblige. Of course, where a product qualifies for a free return, you can’t do anything, anyway.
While there is nothing wrong with paying for the returns, sometimes the shipping cost can be more than the item’s actual price. Then, there are additional expenses you must incur to put the item back onto your Amazon store shelves.
Surely, you would be better off without processing the return in that case, right?
Likewise, there are some products that you can’t resell even if your customers return them. A good example would be a pair of socks. Would you want to resell a returned pair of socks that one of your customers might have tried on earlier?
Then, there are products that may be damaged.
Offering returnless refunds in such cases is the best solution.
Processing returns not only costs you money but also your valuable time.
As a seller, you must wait for the customer to send the product back before you can proceed with issuing the refund. This can take days, and sometimes even a week.
Once you receive the product, you must then inspect it manually and check if it can be restocked. This, again, means spending hours in the warehouse if you do FBM. In the end, if the product turns out to be defective, all your efforts could go to waste, and you must then find a way to dispose of it.
While this may not sound much of an issue if you are just starting on Amazon and your sales volume is low, things can quickly spiral out of control once you start receiving more daily orders.
It’s better to opt-in for returnless refunds where you see they can save you time and money.
Let’s be honest, customers don’t like dealing with returns either. Initiating the return process, printing out shipping labels, and then driving to a nearby drop-off location can be a hassle.
Also, you must realize your customers are already dissatisfied with their purchase. Asking them to go through these steps could make them even more upset. They can leave a negative review on your listing or give your product a poor rating. Your goal here should be to reduce friction as much as possible.
With returnless refunds, you can do that.
When customers see that you care about them, offering returnless returns – they are likely to revisit your store in the future and buy from you again. They may even become your regular customers.
Who knows, your customers might even recommend your products to their family and friends!
As a business owner, it’s your responsibility to play your role in making this planet greener and healthier. You should adopt sustainable business practices and try to avoid those that can harm the planet in the long run.
Processing returns creates unnecessary waste in carbon and landfill emissions. These are bad for our ecosystem. Of course, you can’t always skip on them. However, by offering returnless refunds on some of your products, you can contribute positively to the environment.
Meanwhile, it can also serve as great marketing. Consumers prefer buying from eco-friendly brands. You can position your Amazon store to take advantage of this.
Is it all sunshine and rainbows when it comes to returnless refunds?
The biggest concern regarding offering returnless refunds on Amazon are people who try to scam you by abusing the policy.
Even when there may not be anything wrong with your product, some customers will make a false case and try to get a refund from you. This is sure to bleed your profits.
Unfortunately, there is no way to avoid such scammers. Amazon keeps a check on customer return request rates, which helps to an extent, but you must be prepared to take a hit, more or less.
Another disadvantage of offering returnless refunds on Amazon is if you aren’t careful about the rules you set, you can end up wasting your valuable inventory. This is a common problem for sellers that sell globally.
Product dynamics can often vary from marketplace to marketplace. Setting up the same criteria across all your stores may not be the best way to deal with returnless refunds.
However, this issue is definitely avoidable through proper market research and monitoring, unlike the one discussed earlier.
To set up returnless refunds for your Amazon store, follow these steps:
If you want to get more detailed with your returns strategy and set returnless refund rules for specific SKUs, you can do so by submitting the Returnless Resolution template file. You can download it from the Return Settings page.
Unfortunately, returnless refunds are not available to individual sellers. You must have a professional plan to use the option.
Customers can receive their refund through an Amazon gift card, depending on how they want to be reimbursed. Typically, Amazon customers prefer getting refunded via PayPal or credit card.
Any product that meets the criteria specified under the returnless refund rules qualifies for a returnless refund on Amazon. Also, for the refund to be issued automatically, customers must submit all requests for Amazon returnless refund items within 30 days of the date of purchase.
You can check the returnless refund status for your SKUs by downloading the Status report from the Manage Return Templates page.
All in all, returnless refunds on Amazon can be a great way to boost customer loyalty and save money and resources on processing returns for your unwanted products. However, they may not always be the best strategy to deal with your store returns.
Go through your product portfolio and understand the potential cost of processing returns for each of your SKUs. Ask yourself, will it cost you more to ship the product back than simply issuing a refund to a customer? Is your product fragile and can get damaged during the return shipment? Will there be any issues if you try to resell the returned items?
If the answer is yes to any of these questions, offering returnless refunds could be a good move for you.
In short, do your homework and then make an informed decision on how to handle returns for your Amazon store.
Here at ZonGuru, we believe in empowering sellers with the right knowledge and tools to help them succeed on the Amazon marketplace. Sellers can schedule a live training with our team, where we try to answer all their questions and share useful tips, case studies, and latest trends on everything Amazon. Why not join us and see it for yourself? We look forward to having you!
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