Amazon.com’s free and easy return policy is reportedly one of its biggest strengths, but the platform recently began displaying Frequently Returned Items labels on some of its product pages, highlighting the company’s efforts to reduce consumer returns.
The reported increase in returns is not a problem that is unique to Amazon.com. During the epidemic, the U.S. e-commerce market was booming, with newcomers joining the online shopping scene, but the number of consumer returns also increased dramatically, driving up operating costs for major platforms.
Amazon has always offered a very generous return policy. Within 30 days of purchase, consumers can return purchased but unused merchandise, and they can even return it directly to Amazon’s U.S. Whole Foods outlets.
Amazon’s free return policy is gradually becoming a standard service in the U.S. e-commerce industry, but the cost of free returns is increasing for the platform. During the epidemic, e-commerce platforms saw a huge increase in returns, causing some of Amazon’s competitors to tighten their free return policies, thereby controlling the costs of shipping returned goods and subsequent processing.
Some third-party sellers on Amazon’s online store described Amazon as easier and “less costly” for consumers to return compared to other e-commerce platforms.
Amazon’s free return costs may continue to rise in the future. Earlier, for the return of goods that can not be sold twice, Amazon has begun to charge a disposal fee for third-party sellers, and earlier this year, Amazon again increased the order delivery fees charged for third-party sellers (for the platform to be responsible for the delivery of goods).
A broader context for this display of return rate warnings to consumers is that Amazon is facing a significant decline in e-commerce sales and has had to control costs and make massive layoffs.
The items labeled as “high return rate” included some VCRs and apparel sold by third-party sellers and delivered by Amazon. In addition, these items received a four-star rating (the highest being five stars) in consumer reviews.
Amazon spokeswoman Betsy Harden said the move is to help consumers make a more informed decision about whether to buy.
Amazon has recently begun providing more data on items for consumers, with return rates becoming the latest example. The platform recently began displaying sales data for some popular items, for example.
For third-party sellers, Amazon’s return rate label may have some implications, such as they need to think about why certain goods are more serious returns, and take some measures to reduce the return rate.
Previously, Amazon did not release information on the number of items returned each year, but according to a report by the National Retail Foundation, in 2020, the return rate doubled from the previous year to 18 percent. in 2022, the e-commerce return rate decreased slightly to 16.5 percent, but was still higher than before the epidemic.
E-commerce platforms, including H&M and Zara, have reportedly recently begun a new experiment in returns by requiring consumers to pay return shipping costs. In addition, Amazon and other large e-commerce platforms have introduced a new policy that eliminates the need for consumers to send back items after receiving a refund if they are cheaper to return or if shipping costs are too high.
