FBA Customer Returns Fee–WTF is this?

Apparently it came into effect last June 1st and I only found out today when I checked the Payments report and saw this line item under FBA fees. The amount charged was not a lot but when you’re paying so much to Amazon already, a penny seems like a lot!

So what is it exactly?

It’s a returns processing fee for all products (except apparel and shoes) with a high return rate by category, to address the operational costs of returns and to reduce waste. The fee will only apply to products that have return rates above a threshold specific to each product’s fee category. The fee applied per unit is based on the product’s size tier and shipping weight.

You can read more about it here. You need to be logged in to Seller Central to read the article.

How to avoid being charged with this fee?

• Instead of using Fulfilled by Amazon (FBA), use Fulfilled by Merchant (FBM)
• If you’re using FBA, make sure to launch a high-quality product to avoid getting a high return rate

Almost always, it feels like Amazon is taking advantage of sellers by coming up with ridiculous fees. As if what they’re charging now is not enough! Just look at these scenarios–

First off, if you’re doing FBA, you have no say when it comes to customer returns and refunds as long as these are within the 30-day period from date of purchase. Second, most returned products can no longer be sold again so these products are either disposed of, returned to merchant, or liquidated, ergo, you lose money. Third, Amazon can increase FBA and storage fees whenever they want and when sellers try to increase the prices to compensate for the increase in fees, Amazon penalizes the sellers by removing the buy box.

When do sellers ever win?

That is a million dollar question. But don’t get me wrong, there are a lot of successful Amazon sellers who’ve been around for years, if not decades. Most of these sellers go all-in and they ride the highs and the lows of selling on Amazon.

Selling on Amazon is never easy, often dealing with a lot of complex issues but if you are able to crack the code and actually become profitable, then the experience becomes rewarding.