All sellers will experience returns for one reason or another. It’s part of doing business as a retailer, and most returns can either be resold, or written off as a loss. However, a high return rate is something else, and for Amazon sellers it can mean penalties, both financial and in terms of ‘account health’.
In my course, How to Start an Amazon FBA Store on a Tight Budget, I advise students against selling products with the potential for high returns. These would include clothing and shoes, very fragile items, and electronic-type products purchased from China.
As of June 1st, 2024, Amazon has added another reason to avoid a high return rate: an increased penalty fee. The fee is applied three months after the month in which the high returns occurred. Clothing and apparel are excluded from the new fee, and sellers will not pay the fee for any month where less than 25 units were sold.
How can you keep return rates low aside from not selling items with a propensity for high returns?
When sourcing from China, always vet suppliers and order a sample (or two) of the product first so that you can evaluate it. In addition, create accurate Amazon listings that reflect the product in detail so that customers know exactly what they are purchasing.
