How to Effectively Manage Amazon Refunds

Ecommerce may be heaven for its low overhead, but return rates for Amazon seller stores are anything but heavenly.

Ecommerce return rates are about 30% compared to 9% in brick-and-mortar. Not only does this hurt revenue, but seller metrics can suffer, too, if unhappy customers leave negative reviews. 

Read on to learn how to manage those pesky Amazon refunds.

How to Effectively Manage Amazon Refunds

Amazon’s eCommerce grew by 41% during 2020 due to pandemic lockdowns and restrictions. The demand strained the entire fulfillment system, and “item not received” fraud skyrocketed.

It’s no surprise that the question of how to manage Amazon refunds is top of mind right now. Even in less busy times, refunds are a fact of life. Managing returns is part psychology and part data and documentation.

Communication with your customers and a systemic approach to tracking refunds in your business are the keys to managing uncertainty.

Communication 

Whether you are an FBA or FBM merchant, put yourself in the customer’s position.  Keep in mind that returning an item is a hassle for the customer, too. The more expensive an item, the more likely they are to return it if they are not satisfied.  

Help your customer with as much information as possible before they purchase. 

FAQ sections help customers make an informed decision. This helps avoid “unboxing” disappointment. 

Include detailed product descriptions, along with lots of images and videos.  For clothing, pay attention to sizing charts. If items run small or large, or the red in the photo is more orangey, make that clear. 

Here are some details to consider, including:

  • Exact product dimensions 
  • Manufacturing locations
  • Materials description
  • Weight of product, if relevant
  • Product instructions for use, if applicable
  • Warranty information

While FAQs and details take time to create, they save time and money as preventive medicine for refunds in the long run.

Ask Customers About Their Amazon Refund

Returns are no fun, so it’s tempting to spend as little time as possible on them. 

That is a mistake. If you can find out why a customer returned the product, you may prevent future returns. Perhaps there is a problem with the item’s supplier. Or, if your shipper is not reliable, your customers will not be happy, and you may need to make changes. 

Reaching out to customers can help you find out why they returned the item.

Tip: before you spend a lot of time contacting customers, run a returns report in your Amazon Seller Account. Amazon collects data about returns and the reasons why, including:

  • Accidental Orders
  • Inadequate quality
  • Item is damaged, but the package isn’t
  • Item and package are damaged
  • Item is defective
  • The wrong item was sent

The report can flag trends or a problem with a specific item, geographic area, or type of customer. 

Let the Customer Know You Care

A customer who experiences a botched return or product may leave a negative review. To reduce the risk to your seller metrics, reach out to the buyers who request a refund to see if you can do anything. 

Oprah, who knows a thing or two about human behavior, once said that most people simply want to know that you see them, hear them, and empathize.

A personalized message and prompt, smooth return experience can turn a negative review into a positive one.

Customers who leave negative reviews may decide to remove it if you show some genuine interest in fixing the problem. 

If you’re an FBA merchant, send a message to follow up and confirm that everything is OK. You don’t have control over the return process, but if the customer is unhappy, they may leave a bad review for your business.  

Returns can be a symptom of internal issues in your business, too. Plan for busy seasons to avoid staff overwhelm, errors, lack of stock, and an uptick in returns afterward. 

Ask existing employees to co-create a strategy to minimize returns. Foster a “we’re all in this together” camaraderie, so employees feel supported, not burned out.   

Create a System for Amazon Refunds

The second aspect to managing Amazon refunds is not about the customer. This is about your business systems.

Returns are inevitable and can be harmful to your business. Having a system for dealing with them helps in two ways. Systems save time, and you may be able to automate certain tasks. 

Also, a system will reveal trends in returns. You can take action to correct an issue before it grows. 

Ask your refunds manager to create a spreadsheet tracking every return claim and authorization. Note deadlines for resolving issues for outstanding returns, so you don’t miss them.

Track pending refunds and confirm them with Amazon refund notification emails. Check every item that comes back determine if and how they should be restocked and relisted.

For returns due to damage, FBA sellers need to track when the damage happened. If the damage to a return was Amazon’s fault, you could request an Amazon FBA inventory reimbursement. 

For FBA returns, Amazon refunds the purchase before the item is returned. Track refund notifications email separately and log them by date. If the customer does not return the item within 45 days, you can request an Amazon seller reimbursement.

Next Steps for An Amazon Refund Strategy

Every seller needs an Amazon refund strategy and system. The best strategy to minimize business risk and loss of revenue depend upon each business’ needs. Larger sellers may benefit from outsourcing FBA reimbursement activity.

At Legacy Seller, we specialize in Amazon seller reimbursement services. Contact us to discuss your unique situation.  

Our Amazon Refund Service

Affordable

We don’t make money until we get you every Amazon refund you’re owed. There are no start-up costs, monthly fees or long-term commitments to worry about. Once the money is reimbursed, we charge a competitive commission on the money recovered.

Efficient

We work smart to make sure you’re reimbursed as soon as possible. You'll start seeing reimbursements in as little as 48 hours plus, we review your account and file for reimbursements every 2 weeks. Others do it every few months.

Complete

We deliver comprehensive recovery reports detailing your refund activity, ensuring all items are accounted for and that you receive refunds for everything you deserve. You’ll be able to rest easy knowing where your inventory stands at all times.

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