How To Handle The Dreaded January Returns

Do you have a formalized process for handling returns, especially with the influx of holiday returns starting January 1?

January is the start of “returns season,” and it’s always bigger than Amazon sellers expect. Amazon’s returns policy extends for the holiday season, so any orders from November 1 to December 31 can be returned until January 31—which is longer than Amazon’s typical 30 day period. The two months’ worth of returns added to the higher sales volume of Q4 equals a high number of returns during January.

Returns are an important aspect of a business. They are a part of the customer experience and support Amazon standards. Having a strong returns process throughout the year—but especially during the holidays—can make or break your customer rapport and seller metrics.

This means now is the time to start preparing for January returns. Don’t be caught off guard with immense returns after you’ve rolled through the holiday season.

Let’s take a brief look at the Amazon returns process, so we’ll find where to best streamline processes to prepare your business for January returns.

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How To Handle The Dreaded January Returns - amazon return warehouse

Amazon Returns Process

1. Notification

You’ll get an email from Amazon that notifies you a return request has been submitted. This will include their reason for return and whether or not that reason is included in Amazon’s returns policy.

2. Reason For Return

You’ll want to take a look at the customer’s reason for return to see how to proceed with the request. They will usually mark it as damaged/defective or that they changed their mind. If the product is damaged, defective, or misrepresented, you’ll have to refund the entire cost of the product, the original shipping cost, and the cost of return shipping. If the product is fine and they no longer wanted it, you do not have to pay for the cost of return shipping.

3. Manage Return

Under “Manage Returns” on your Seller Central, you can take one of four actions:

• Authorize Request: You approve the return and Amazon will send the consumer a Return Merchandise Label. This will start the typical returns process.
• Issue Refund: If you are doing a returnless refund or issuing a refund before the customer sends back the product, this action will instantly issue a refund.
• Contact Buyer: This will allow you to contact the buyer directly to try to resolve the issue.
• Close Request: If you are not accepting the return because the request doesn’t fall within Amazon’s returns policy, you can deny it here.

If you choose to “close request,” you’ll have to make an “appeal” with Amazon, which they can accept or deny. If denied, you have to issue a refund to the buyer within 15 days.

Even if you close the request, the buyer can still make an A-to-Z Guarantee claim. These claims often happen in severe cases, such as:

• The seller has refused to accept the return request, which the buyer believes is within the Amazon’s return policy terms
• The item hasn’t arrived or is significantly late
• The item is “materially different” than on the product listing (damaged, misrepresented, or defective)
• The buyer returned item but didn’t receive refund

Before submitting an A-to-Z Guarantee claim, the buyer has to first contact the seller. This gives the opportunity to resolve the issue before it goes to Amazon. As a seller, you want to avoid A-to-Z Guarantee claims as much as possible. Having too many can put your Amazon account and seller rank in jeopardy.

4. Receive Return

When the item is physically returned to your hands or warehouse, you have 48 hours to issue a refund to the buyer.

If the item was marked “sellable,” then you can add it back to your inventory and wait for it to sell again. If it was marked in sellable condition but it’s not sellable, you may need to open an FBA removal order to inspect the item yourself.

If the item was marked damaged or defective, it may or may not be resellable. If the customer damaged or opened it, it can no longer be sold as “new.” However, you can open a removal order to see the quality of the goods yourself. You can then re-sell the goods on Amazon as “like new” or “very good condition,” or you can resell on another platform.

Sometimes, though, customers will mark it as “damaged” or “defective” even when it’s not. In these cases, you can resell it as “new” and add it back to your inventory. Open a removal order to see the condition of goods for yourself. If you get false defective claims, you may want to file a dispute with Amazon; too many returns and damage/defective claims can hurt your seller metrics.

If the item was damaged in transit, you may be eligible for reimbursement by Amazon FBA or the shipping company.

Pro-Tip: Use your returns and excess inventory for a post-holiday sale!

That’s the basics of the returns process. So how do you prepare for this process ahead of time to reduce your returns and streamline operations?

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How To Handle The Dreaded January Returns - amazon boxes at door

How To Handle Amazon Returns

1. Review your returns policy.

89% of online shoppers stated that a return policy would influence their decision on whether or not to buy from the company, according to a BizRate survey, shared by Harris Williams & Co. Offer a lenient return policy that is made well-known and visible on your website.

You’ll also want to consider offering prepaid return labels. Amazon now offers returnless refunds and prepaid return labels for seller-fulfilled items. If you don’t use FBA, you may want to consider offering prepaid return labels to your consumers. Nearly 47% of consumers want a printable label for easy returns. Learn more about prepaid return labels here.

2. Remember your margins.

Most returns can’t be sold in “new” condition again. This means you may not be able to sell them as quickly and for as much money. Moreover, shipping costs—especially if you offer free shipping—can severely cut into your margins. You might be surprised at the loss you can incur with high return rates. Keep this in mind when planning for how you will handle returns of damaged or defective items. How will you refurbish goods to resell on Amazon or another platform? How will you recover revenue?

3. Have a formalized process.

What does the returns process look like for your business? Who handles the returns? Will you need extra staff? Who will reach out to customers to resolve disputes? Who will test and grade the goods for their resale quality? Formalizing these processes ahead of time will ensure you stay within Amazon’s returns policies while providing fast, efficient customer service.

4. Don’t wait until the end of the month.

People often wait until the end of January to do all their returns “in bulk.” Not only will this overload you with returns, but it will also upset your customers. People expect refunds fast after the holiday season, so you want to ensure you provide speedy and convenient service.

The faster and more helpful you are with the returns process, the more likely you’ll get good reviews and metrics in response. Treat every return like an opportunity to win back a customer and boost your ranking. If you start Q1 with a focus on customer support, you’ll put yourself on a strong path towards yearlong success.

5. Consider a restocking fee.

You can charge customers up to 20% of the price as a “restocking fee.” Basically, this tells customers they won’t receive a full refund for items they purchase. You’ll need to include this in your returns policy on your listing, so people aren’t surprised.

This fee can be problematic for some customers. If they know about it before purchasing, they may decide against it because they want the security of a full refund. If they find out about it after returning, they will be frustrated and dissatisfied that they don’t get their money back.

Restocking fees can help maintain margins, but often at the expense of customer satisfaction and support.

6. Start with negotiations.

When you see a return request, you may want to contact the buyer directly. You can apologize for the problem and offer a discount or rebate if the product is damaged or not as they imagined. For example, you might say: “I see that the product you received did not come as expected. I would love to work with you to ensure you end up happy with this product. Can I offer you a 20% discount for the trouble?” You can also further inquire what was wrong with the product to better understand the concerns with your items.

This will keep return rates and shipping costs low while cutting into your margins far less. However, these negotiations can take up a lot of time, especially in the busy holiday returns season. In this way, it’s best to formalize this system with a template answer.

7. Watch your metrics.

Seller metrics will determine your rank and your ability to win the Buy Box. Complaints and return rates are higher after the holiday season, which also means your metrics are lower. You need to counteract this with strong customer service and a professional agency like Seller’s Choice to ensure your listings and reviews are top notch.

8. Use returns data for the future.

Remember that returns are a great way to understand your customer better. Look at your return rates for each product. Which items are returned the most and why? This can give you an idea of the products you may want to cut from your portfolio for 2018 to minimize returns. Focus on those products with low return rates and high margins.

How To Handle The Dreaded January Returns - amazon fulfillment center

The Bottom Line

Returns are a part of business and customer service. Handling them appropriately is crucial to providing for your customer—and the longevity of your business.

Interestingly, 65% of all returns are a result of retailer mistake. This is often because the product is damaged, it’s the wrong item, or it doesn’t appear as it does on the site. If you fix these problems, you can often minimize returns and improve customer service. The best way to handle returns is to proactively manage them.

This proactive management starts with creating appropriate product listings. You want images that present your product honestly and clearly. You want descriptions that will sell your product to the ideal customer.