This guest post was written by Refunds Manager. Founded in 2012, Refunds Manager secures Fulfillment by Amazon reimbursements for sellers. Using a unique combination of software and manual review, the Refunds Manager team is able to find FBA errors with greater accuracy than sellers themselves.
Let’s talk about one of the scarier, more frustrating aspects of selling on Amazon—customer returns.
If your return rate is too high for a product, Amazon will not allow you to sell it anymore. And before that startling reality even comes to fruition, high return rates will negatively affect your profitability.
If the product the customer returns is deemed unsellable, then you’ll have to hawk your wares for a lower price elsewhere, like eBay or a local fleamarket.
Don’t despair! There are some actions to take to lower your return rate on Amazon. Read on for actionable tips.
1. Never round up on an item’s condition
If you do retail arbitrage (purchasing items at Target, for example, and then selling them on Amazon), it’s important to mitigate the customer’s expectation.
You don’t want the customer to expect one thing and receive another. That’s why you should always “round down” when in doubt about describing an item as “excellent”, “good” or “acceptable” and never ever ever round up
This will lower your return rate because customers will feel like they received exactly what they wanted, or will be pleasantly surprised if the condition is even better than they expected.
2. Help customers pick the right size
Never let the fear of returns prevent you from a great business idea. For every seller who is terrified of selling clothes and shoes, there’s another making bank with little competition.
Most of the time, customer-returned clothes and shoes will be placed back in your sellable inventory, making returns a non-issue.
But it’s still wise to lower your return rate to protect the health of your FBA account and lessen the chance for customers returning something after wearing it.
To do this, help your customer pick the right size. For example, Tatiana Buree sells waist trainers on Amazon and on her website, Luxx Health (currently at over $50k per month in sales on Amazon). When she initially came up with the idea of selling waist trainers, other sellers advised her against it because of the high return rate. To help prevent returns, she devised a sizing system specific to her product (which doesn’t correspond to the standard pant or shirt size) and saw a low rate of returns. If you think strategically and give all the sizing information needed before the purchase, you have a higher chance of success.
3. Fully inspect all product packages before sending to FBA
One of the best ways to lower your return rate is to send quality products to FBA. Here’s what Stephen Smotherman of Full Time FBA has to say on the topic:
I get people asking questions on Facebook groups saying things like, “Hey I got a shoe box where the lid is completely ripped off. Do I just polybag it?” No! Think like an Amazon customer. If you’re an Amazon customer and you’re spending forty, fifty, sixty, or a hundred dollars on shoes and you see that the box cover has been torn off, it doesn’t feel right for some people.
Especially with high priced shoes, or high priced anything…people want “new” to be “new.” Stop sourcing borderline items. Even though you might be okay with a little defect on the box, other Amazon customers are not thinking like that.
Act on his advice and be very picky with the items you source for retail arbitrage. If it’s questionable, simply don’t sell it. Not only does the product have to be in mint condition, but the packaging as well.
4. Create a replacement agreement with your supplier
For private label sellers, you can have a supplier agree to replace returns due to defectiveness. Whether the unit is slightly damaged or doesn’t function, your supplier should foot the bill for sending bad products to Amazon. According to Manny Coats of the AM/PM podcast, you should request this credit monthly, so the supplier is not stuck with a big request at the end of the year.
To find out if your customers are returning defective products to FBA, look inside of your SellerCentral portal. Navigate to the FBA Customer Returns Report in the Customer Concessions section. This report will show the reason a customer chose return the item. For defective units, work out a credit agreement with your supplier.
Not only will this agreement help your profit margins, it will help lower your return rate by ensuring your supplier is fully invested in shipping quality items to Amazon.
5. Ask customers why they returned something
Unfortunately, the FBA Customer Returns Report doesn’t always give helpful answers as to why an item was returned. Customers can choose to not give a reason which will show as “unknown” on the report.
While it’s usually not allowed to contact Amazon customers, it is okay to contact them if you have a question specific to their order.
If they ordered your product, returned it, and you have no idea why, go ahead and reach out and ask them.
6. Include excellent product photos (including contextualized images)
If your FBA Customer Returns Report has a lot of returns marked as “product doesn’t match description,” you probably have a problem with the photos or text on your listing. Taking more accurate photos should help clarify any confusion.
Amazon shoppers need a lot of information to make an informed buying decision, and photos are definitely a great addition.
Here are a few things to include:
- Images of all sides/angles of the product
- Images that help contextualize use of the product
- Images that show the products size in relation to a person or common item
- Images of any important parts or accessories that are included
Make sure the lighting helps portray the color as accurately as possible. Especially when home decor or clothes, the wrong color can mean the item will be returned. If this isn’t possible, add more details in the description to explain how it may be different.
Lowering your return rate can help increase profit margins and protect the health of your account, so it’s worth the effort.
For those times when you have reimbursement issues with customer returns, the team at RefundsManager can help. Learn about how we personally handle FBA claims for sellers.
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