8/15/15 update - Listen to my recent podcast on 'Customer Returns'
If you look close at this screen shot of my 2011 Holiday sales on Amazon.com, you'll see a 6% return rate in December.
Remember those returns do not include returns Amazon will receive in January (for my buyers' Nov-Dec purchases). I'm expecting my return rate overall to be about 8%.
I don't know if that's high or not compared to other sellers. Anyway I can explain why mine isn't a 'perfect zero':
> The buyer had remorse or the recipient returned it for something else;
> At least 50% of the inventory I sell is 'not new' (i.e. Amazon makes sellers choose conditions like 'Collectible - Very Good' for Toys; or 'Used-Very Good' for books/CDs/DVDs.)
The problem with selling 'not new' items is that buyers' expectations can be different from my selection of condition.
So for Amazon sellers - When you're listing your 'not new' inventory, the safest way is to select the item condition that is one level 'lower': So if I have an item I think is 'Like New' I'll usually select 'Collectible-Very Good' instead.
For eBay sellers - certainly don't try to pass off a used item as 'New', and include lots of pictures so the buyer knows exactly what to expect.
My Tips for Dealing with Returns
I've seen many sellers completely freak out over returns and they end up haggling with the customer. (Note: If you sold the item via Amazon FBA, the customer may bypass you totally and deal with Amazon customer service, who can authorize a return/refund themselves without your input).
My advice (if the customer contacts you):
> For any item under $50, don't haggle or ask the customer to ship it back - just give them their money back. It's just not worth it (more on that below). The customer will be delighted and will likely leave you positive feedback (and/or remove his/her negative feedback left for you).
> For items priced $50 to $100, offer a partial refund (50-75%) if they're unhappy. Of course if the item is broken or defective, you should refund them promptly (don't wait for them to return it to you, but definitely ask them to return it)
> For items priced over $100, you should offer a partial refund (50-75%) if they're unhappy. Use your discrection but I would wait for the item to be returned first if they want a full refund.
My Reasoning for "Don't Haggle, Just Refund Them"
The reasons why I refund a customer right away if they are unhappy with a $50-or-under item:
> In most cases, the buyer is honest and truly dissatisfied, I don't think they're out for a freebie (and I really want to please the customer - shouldn't we all?); AND
>I think sellers' time is too valuable to have to negotiate (for instance): who's paying the return shipping; what to do with the item when it's returned; take time to inspect/repair/relist the item; decide how much to refund the customer; etc. If you add up all the time invested in dealing with a return, we (sellers) could be using that time to scouting for new products to sell.
There are some exceptions, of course, but in general, it's better to refund the customer and tell them to keep the item. Anything else is just not worth the time investment.
Do you agree/disagree? I want to hear from you! Click 'Comments' below.