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About Customer Returns, What to Do

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.

{ 32 comments… add one }
  • Carol Hearn November 23, 2018, 12:26 pm

    When I had an antique shop in a shopping mall, my partner and I worked out a fairly strict return policy. We had to do this because there were 6 of us who worked with customers and we wanted our answers about returns to be consistent.

    When I began selling on ebay in 1997, I carried over my basic policy to ebay (my mistake, I take the financial hit; your mistake, the hit is your responsibility). Even as ebay has moved more in the direction of “no fault” customers, this seems to work for almost all transactions.

    In my opinion, sellers who are too quick to offer refunds look like hobby sellers rather than business people. I know there are reasons that many disagree with this opinion, but stores that run like businesses do not give refunds with free return shipping at the drop of a hat (the exception being clothing, where fit is an issue). I cannot stay in business if I lose money on transactions (whether by spending too much for inventory, charging too little, paying too much for advertising, or spending too much on postage).

  • dan August 1, 2018, 2:43 pm

    I mostly sell on ebay, and I will look at the feedback the person leaves before I decide on a refund or not. Its not fool proof but you can see if they game the system. I refused to deal with someone and never heard back. They only left negative feedback and are abusing the system. Another demanded I give them a refund and I refused since it touches the crotch. Got a threat of a bad review, but I can’t find it. If they leave honest feedback I will take the return because the color is wrong or it doesn’t fit. There are many scammers on ebay that will want to return a low dollar item in the hopes you just refund them

    • Jordan Malik August 1, 2018, 2:57 pm

      You are right, hopefully the # of scammers/returns you get are a low percentage compared to your overall sales. I know in the online clothing business overall, store owners/brands have to accomodate for losses incurred by unscrupulous buyers.

  • Jason December 26, 2016, 2:34 pm

    I agree. I’ve noticed that most customers are being honest and they’re not trying to pull a fast one.
    I usually refund right away depending on the price I paid. If it’s expensive, I’ll try to negotiate a partial.

  • Sam U December 23, 2016, 2:32 pm

    Do anyone know how you can blacklist list a customer that is abusing the return policy to keep them from making further purchases if you are using FBA.
    George you hinted on this above. How did you do that and are you using FBA?

    • Jordan Malik December 26, 2016, 5:37 pm

      Not sure if there is a way to do that. You should inquire with Amazon seller support first, see if they have any ideas. If they aren’t helping you, ask them to escalate your problem to a supervisor.

  • Steve S. August 11, 2016, 4:36 am

    Briefly discussed here is the unscrupulous returner/customer. What to do if this customer is repeatedly ‘dissatisfied’ but continues to buy from you and attempts to extort discounts with each purchase. I asked Amazon about somehow blocking such a customer from future purposes but got nowhere with them. When I confronted the customer he left ridiculous feedback which was immediately removed by Amazon. Has anyone else dealt with this issue?

  • Robert G. June 12, 2016, 8:31 pm

    A great blog. I have back and forth on requiring that unhappy customers return items under $50. Most of my products are less than $50. Your recommendations and reasoning are very helpful.

  • Ed Carl August 1, 2015, 1:13 am

    Hi Jordan and fellow e-sellers: I’ve been selling Merchant Fulfilled 3+ years, have a very low return rate (below 2%), and yes the returns do take too much time when they happen. But I do not generally refund the customer right off the bat, but try to find out why they are unhappy and what would set it right. I have found almost all my customers to be pretty reasonable and aren’t trying to take advantage of the Amazon policy. I always make it clear in my first communication to an unsatisfied customer, that my intention is to make them happy customers. I always start by thanking them for their order, and apologizing for any inconvenience. I try to be humble and helpful but not a pushover. I have also given refunds just to avoid a hassle and to not waste time with it, when a customer seemed unreasonable. Luckily I wasn’t dealing with large amounts.
    I think your magnaminity vis your customers is a great attitude too, even if it makes sense in terms of your costs incurred otherwise. I always try to respect the golden rule, but not necessarily expect my customers to always be as generous. But I haven’t had to deal with scammers.
    So to summarize my policy is to give the benefit of the doubt and not jump to conclusions. Truly try to help the customer as I would wish to be helped. If they are. Honestly try to make their day. Most all of my customers have been honest and I keep in mind that they have a right to return an unwanted purchase for any reason. I try to respect that, few if any questions asked. But I’ve found if they get the idea that you are and act truly on their side to fix the problem, they usually appreciate it and respond by giving you the benefit of the doubt too. There may be a few with a bad attitude sometimes or who are unreasonable and with them I completely agree with your approach. You might not know what hassles they have gone through in their lives lately, so definitely I try to emphathize and not accidentally frustrate them further. Who needs it? Usually (not always) we reap what we sow and if a customer abuses the policy, it’s their bad karma, not mine. I have usually refunded partially and then refunded in full when the item has been returned. I think that is also a good policy.

    \But of course with FBA we won’t/don’t have that kind of control. SO changing from Merchant fulfilled to FBA we no longer have to deal directly with and have a personal relationship directly with our customers. 99 times out of 100 the customers are honest and within their rights and just want a fair shake. The others aren’t worth any of our time, so just to refunding make sense, if it is a petty amount especially.

    • Jordan Malik August 1, 2015, 9:16 am

      Ed – EXCELLENT analysis here, great advice. Thank you for sharing.

  • Pat G January 14, 2015, 1:32 pm

    Jordan
    As I am a new 100 % FBA seller for the last 2 months ( going well so far )
    Have never experienced returns as of yet ?
    But today received e mails that two items where being returned today ?
    Great timing with your article
    My question is how do I refund them ? Am I even able to make any of the decisions ?
    With FBA on auto pilot Amazon handling returns ?
    Does Amazon take care of everything or can I make adjustments in Seller central
    Any advice would be great

    Hey get this I sold a dancing Santa two week before Christmas , new worked perfect
    Today it is being send back to me…..Hummmm not everyone is honest.
    Can you say decorate the house , then clean up….just a thought..
    Thanks for all you do always enjoy reading your materials , you Rock !!

    Pat G

  • Marcelino October 16, 2014, 12:20 pm

    Thanks for this JB, as always valuable content.

  • Michael Putnam May 4, 2014, 10:18 pm

    Jordan,
    I had a retail gift store in a mall for 20 years and was the one that took care of most customer returns. Before I had my own store I managed a Drug Store in California and they taught that an unhappy customer will do more damage to your business that the few dollars you might save by not giving them a refund. I think your approach is right on and exactly what I will do.

    • Jordan Malik May 5, 2014, 1:03 am

      You hit the nail on the head, Michael. I appreciate you writing in.

  • Jim Lowe November 12, 2013, 3:17 am

    My refunds are below 2%. Interestingly, most of them occur BEFORE the items are shipped from Amazon FBA. All items sent to Amazon FBA are carefully inspected Before sending to FBA warehouses. Most of them are medical and it is clearly explained to customers in ALL ads that my items are ALL new. Very Different from what Jordan does here but, I do learn a lot from Jordan’s post above. Lot’s of learning to do here.

  • Greg June 16, 2013, 2:03 am

    Is there some way to arrange with Amazon to have items of yours below $50 to automatically be fully refunded and the customer allowed to keep the item? I had an incident recently where the item was refunded and a return authorized before I even knew there was a problem. When I found out I contacted Amazon to request the customer be allowed to keep the item and was informed that since the return had already been authorized, this wasn’t possible. I feel that had such an arrangement been in place, the negative feedback may have been avoided.

    • Jordan Malik June 16, 2013, 12:52 pm

      I have not heard of that option, sorry. it sounds like a great idea yet. Have you contacted Amazon support and asked them?

  • Caroline January 11, 2013, 11:19 pm

    I sell apparel so my return rate is very high — more like 20-30%! I’ve always given 100% refunds and sometimes I’ll pay for return shipping. My problem with the Amazon return policy is that I sometimes get items back without the tags, or even stained, and the customer still gets a full refund. They’re often marked “defective” and I can find nothing wrong. I assume buyers do that to get free return shipping. All my customer returns get prepped and relisted, with a change in condition and lower price if necessary. Just a part of doing business on Amazon, I guess.

  • George August 8, 2012, 2:04 am

    I agree giving money back and let them keep the item.
    However, I’ve my own policy.
    Every buyer that did ask me for a refund, I automatically flag it as “Don’t Ever Sell Again”.
    Do you now how great I feel when “one of those” send me an email asking:
    Why I can make a purchase? Do you know my answer?
    Absolute silence.

  • Toni August 7, 2012, 7:47 pm

    I agree with Neal regarding Amazon’s “no questions asked” return policy, and I have no qualms about reselling a returned item, as long as it is in sellable condition. In fact I had an item returned, and upon inspection there was absolutely nothing wrong with it! I guess it was buyer’s remorse. So back it went to Amazon and it went to a satisfied customer.

  • Shelby August 2, 2012, 4:23 pm

    I say what jdhpa said, “I don’t mind giving my customers a 100% refund if they’re unhappy, or paying for their return postage. I think most customers would consider that to be treating them well. Rather than try to sell the returned item again I either give it away or discard it. I wouldn’t give someone a refund and let them keep the product, though, I don’t want to reward dishonest behavior, and some dishonest people would take advantage of that.Do you have any statistics on how many of your returns are ‘repeat return customers?’Thanks for the good article!”

  • Clayton February 28, 2012, 1:56 pm

    On Amazon, I have started placing a comment about a return is not necessary if they are not happy with what they bought. Just contact me and I'll issue a full refund. I'm testing this out on lower priced items.

  • SavySeller January 16, 2012, 8:16 pm

    At this time, our primary sales are on eBay. We have become believers in "Don't Haggle, Just Refund Them". With the eBay 'One-Way' feedback system, a seller has more to loose than dollars by making a return an issue; rather than, just refunding and Hope the buyer doesn't give you any feedback – instead of a negative or low DSR rating.Add the potential for a low DSR rating, the grief and upset of trying to negotiate with an already unhappy 'being right' buyer and the wasted time involved -equals a Recipe for Disaster!Sellers should be spending our time selling, not counting our losses. This is also a good reason why eBay sellers should be looking at other selling platforms, such as Amazon.European_Classic_Gifts! & Cleveland_House

  • SavySeller January 16, 2012, 8:14 pm

    Our primary sales are on eBay. We have become believers in "Don't Haggle, Just Refund Them". With the eBay 'One-Way' feedback system, a seller has more to loose than dollars by making a return an issue; rather than, just refunding and Hope the buyer doesn't give you any feedback – instead of a negative or low DSR rating.Add the potential for a low DSR rating, the grief and upset of trying to negotiate with an already unhappy 'being right' buyer and the wasted time involved -equals a Recipe for Disaster!Sellers should be spending our time selling, not counting our losses. This is also a good reason why eBay sellers should be looking at other selling platforms, such as Amazon.European_Classic_Gifts! & Cleveland_House

  • jdhpa January 11, 2012, 2:51 pm

    Hi Jordan,I don't mind giving my customers a 100% refund if they're unhappy, or paying for their return postage. I think most customers would consider that to be treating them well. Rather than try to sell the returned item again I either give it away or discard it. I wouldn't give someone a refund and let them keep the product, though, I don't want to reward dishonest behavior, and some dishonest people would take advantage of that.Do you have any statistics on how many of your returns are 'repeat return customers?'Thanks for the good article!

  • Neal Williams January 10, 2012, 6:11 pm

    I think the Amazon return policy is flawed. The "no questions asked" return policy that has been used by many retailers has eventually been scrapped or restricted by every retailer that has used it.As more buyers become aware of the policy, it's abuse will become more prevalent. Fortunately, many of my items get returned without even being opened so I can relist – the only drawback is I have to pay freight again.I think a change to the AZ refund policy is way overdue – perhaps a 30 day restriction would be a good start.

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