Amazon Termination Policy In 2023: Everything You Need To Know As A Seller

As an experienced Amazon seller, one of the most common questions I get is what happens if Amazon shuts down your selling account? Can you get back on the marketplace if you get banned or terminated?

The short answer is – it depends on the reason for termination. Some offenses like safety violations may be reversible, while egregious offenses like counterfeiting will shut you down for good.

In this comprehensive guide, I‘ll share everything I‘ve learned about Amazon‘s termination and suspension policies as a seller. Here‘s a quick summary of what we‘ll cover:

• Amazon‘s point-based warning system and how many points lead to termination.

• The most common reasons sellers get terminated.

• Severance deals Amazon offers banned sellers.

• Sneaky tactics like "hire to fire" quotas.

• Appealing a wrongful termination.

• Getting reinstated after being banned.

• Alternatives like opening a new account.

My goal is to make sure you understand Amazon‘s policies inside and out so you can avoid account suspension and maximize your selling success. Let‘s get started!

How Amazon‘s Point-Based Termination System Works

The foundation of Amazon‘s seller discipline process is their point-based warning system. Here‘s a quick rundown of how it works:

• You receive points for policy violations like shipping late, copyright complaints, etc.

• Points remain active and accumulate for 90 days.

• Get 7 points in a 90 day period and your account will be automatically banned.

Now let‘s dig into the details…

There are two types of points:

Policy Warnings – for late shipments, orders with high A-to-Z claims, listing violations, etc. You get 3, 4, or 5 points depending on severity.

Metric Warnings – for high order defect rate, late delivery rate, etc. These are 1 point each.

Points expire 90 days after being issued. So you need to accumulate at least 7 points within a rolling 90 day period to trigger a termination.

Amazon has leeway with this system. They may issue a "final warning" before banning you even if you cross the 7 point threshold.

The most important thing is avoiding points in the first place through good selling practices. But if you do get warnings, take immediate corrective action to improve your metrics and avoid a ban.

Now let‘s look at the offenses that will earn you points and get you in hot water with Amazon.

Top Reasons Amazon Sellers Get Terminated

Based on my experience, these are the most common triggers for account suspension and termination:

1. Excessive Customer Complaints

Too many negative reviews or A-to-Z claims are big red flags to Amazon. Here are some scenarios that will rack up warnings:

• High order defect rate – Amazon wants this below 1%. Above 2-3% puts you at risk.

• Numerous A-to-Z claims – Even one or two a month could trigger an investigation.

• Review manipulation – Paying for reviews, review swapping, etc. Don‘t do it!

The best way to avoid this is providing excellent customer service. Communicate proactively with customers and resolve any issues quickly.

2. Policy Violations

Amazon has strict seller policies around listings, shipping, returns, and more. Violating these can earn you points. Here are some common examples:

• Inaccurate or duplicate listings – Make sure all your listings are accurate and unique.

• Late shipments – Ship all orders within your stated handling time.

• Prohibited products – Restricted categories like prescription drugs.

• Packaging issues – Poor packaging that leads to damaged products.

Read Amazon‘s policies thoroughly and audit your account regularly to stay compliant. Mistakes here unravel quickly.

3. Intellectual Property Infringement

If you sell knock-offs or counterfeit goods, your selling days on Amazon will be short lived. Here are some scenarios to avoid:

• Copyright violations – Selling pirated books, DVDs, software, etc.

• Trademark infringement – Selling lookalike products from brands like Apple or Disney.

• Patent infringement – Making and selling products patented by someone else.

The best protection is only selling unique products you have full rights to. Consult an IP lawyer if unsure.

4. Inauthentic or Misleading Listings

Amazon hates misleading listings that create a bad customer experience. Some examples:

• Bait-and-switch – Listing shows one product but shipping something different.

• Misleading information – Inaccurate or deceptive claims about products.

• Review manipulation – Removing or editing negative reviews.

• Ranking manipulation – Artificially inflating sales to boost ranking.

Always accurately represent your products in listings and marketing. Don‘t play games trying to boost rankings.

5. Dangerous or Illegal Products

If Amazon determines your products are unsafe, illegal, or unethical, you‘ll be banned swiftly. For example:

• Unsafe products – Faulty electronics, toys with loose parts, flammable clothing.

• Illegal supplements – Steroids, dangerous substances.

• Restricted chemicals – Strong solvents, explosives precursors.

• Wildlife products – Ivory, animal specimens.

It‘s 100% your responsibility to source legal products that meet safety standards. When in doubt, consult compliance experts.

What Happens When You‘re Terminated As A Seller?

When you‘re banned as a seller, here‘s what you can expect:

• Account suspension – Your listings and access will be deactivated immediately.

• Settlement offer – Amazon may offer a settlement deal in exchange for waiving legal claims.

• Inventory disposal – You‘ll be required to remove any remaining inventory from Amazon‘s warehouses.

• Financial withholding – Any money owed to you will be held back temporarily.

–Restitution – You may have to refund recent sales if customers were harmed.

Make sure you understand the repercussions. Consult an ecommerce lawyer if you have questions.

Now let‘s look at two key aspects of termination – severance deals and rehire policy.

Severance Deals – Should You Take Amazon‘s Money?

When you‘re terminated, Amazon may offer you a lump sum payment – typically $1,000 to $5,000 – in exchange for signing a separation agreement and waiving any legal claims.

You‘re faced with a tough choice – take the quick cash or reject it to preserve legal rights. Here are some key considerations:

Take the severance if:

• You have no plans to sell on Amazon again.

• You need immediate funds after losing business.

• You don‘t have grounds for a wrongful termination lawsuit.

Reject severance if:

• You want the option to appeal and be reinstated later.

• You feel Amazon breached contract and want to pursue legal action.

• You plan to open a new Amazon account in the future.

My advice – consult a lawyer before signing anything from Amazon after termination. Understand all your options before accepting a payoff.

Can You Get Rehired By Amazon After A Ban?

This is one of the biggest questions banned sellers have – can you open a new Amazon account after being terminated?

The answer is maybe, but your chances depend heavily on why you were banned.

According to Chris McCabe, former Amazon investigator and now consultant for banned sellers, these are general rehire eligibility guidelines:

However, your mileage may vary case by case. Here are some tips that can help get reinstated:

• Wait at least 1 year – Give Amazon time to cool off and review policies again.

• Open a new business entity – Don‘t reuse names or information from banned account.

• Get a lawyer‘s advice – Draft a careful reinstatement request.

• Emphasize corrective actions – Show how you‘ll prevent past mistakes.

With the right circumstances and careful approach, many sellers do successfully return to selling on Amazon after a termination.

Can Amazon Re-Close Your Account After Reinstatement?

This is a huge risk if you manage to get your account reopened after a ban. According to Chris McCabe, there are two scenarios where re-banning is common:

1. Making the same violations that got you banned originally. Amazon will be monitoring you closely, so you need to tread carefully. Any recurrence of past offenses will likely lead to another swift termination.

2. Major policy violations shortly after reinstatement. Even if your original issue was minor, things like selling counterfeits or hijacking listings right after reopening your account are grounds for immediate re-banning.

The key is showing Amazon you learned from your mistakes and making absolutely no missteps that could justify another termination. You‘ll be under tight scrutiny, so be extra careful.

Can Amazon Terminate You Without Warning?

In almost all cases, Amazon will issue warnings and suspensions before fully terminating your account. There‘s a common misconception they ban sellers instantly without notice.

However, here are two scenarios where Amazon can terminate you without going through the normal warning system:

1. Severe policy violations – Actions so egregious that immediate termination is warranted, like selling illegal or dangerous products.

2. Pattern of abuse – Accumulating multiple suspensions on an account for ongoing issues.

So understand even severe offenses rarely lead to instant termination for first-time incidents. You‘ll have a chance to self-correct unless the violation is truly extreme.

Shady Tactics – Does Amazon Hire and Fire Sellers?

There‘s a controversial theory that Amazon partners deliberately with some third-party sellers just to ban them later. The alleged reasons:

• Generating severance money – Earn income from termination settlements.

• Churning competition – Knock out new competitors before they grow.

I have not seen strong evidence this is occurring systematically across Amazon. However, here are some pointers in case you‘re worried about this shady practice:

• Vet partners extremely carefully – are they incentivized to get you banned?

• Make sure the relationship is transparent and you understand all processes.

• Monitor warning points yourself in seller central – don‘t rely on partners.

• Consult a lawyer before signing any agreements in case they have hidden trap clauses.

While Amazon wants to encourage good sellers, they also have incentives to eliminate bad ones damaging their brand. Tread carefully when taking on partners promising shortcuts.

Appealing a Wrongful Termination

Mistakes happen – perhaps you were falsely accused of policy violations or an Amazon employee acted unethically. Do you have any recourse for appealing a wrongful termination?

There are limited options, but here are some potential paths to fight your ban:

• Email appeals – Reach out politely but firmly to [email protected] or [email protected] explaining your situation.

• Call support – Talk to Account Health team and ask for supervisor to review your case.

• Consult Chris McCabe – Experts like Chris help guide difficult appeals and reinstatements.

• File arbitration – As a last resort, bring the dispute to legally binding arbitration.

The reality is Amazon holds all the cards and overturned bans are very rare. Unless there are exceptional circumstances, the safest route is waiting out your termination period and reapplying later.

Can You Still Use Amazon As A Customer If Banned As A Seller?

Yes, Amazon will not suspend your buying privileges if banned as a seller. A few things to note:

• You can buy as normal with your regular Amazon account and Prime benefits.

• Your buying history and reviews remain unaffected.

• You cannot sell or interact with sellers using that account.

• Consider a separate buying account to avoid confusion on order status, etc.

So rest assured you can continue using Amazon‘s retail services even after a seller suspension. Just keep your shopping activity completely separate.

Final Thoughts and Takeaways

Getting banned as an Amazon seller is painful, but not necessarily the end if you approach reinstatement carefully. Focus on building a fundamentally sound business, treat every customer exceptionally, and closely follow Amazon‘s guidelines.

The keys to minimizing termination risk are:

• Proactively providing amazing customer service.

• Never risking policy violations or unethical behavior.

• Vetting your suppliers, products, and partners diligently.

• Carefully researching every aspect of a product before listing it.

• Monitoring your account health metrics constantly.

• Consulting experts right away if issues arise.

Despite the challenges, selling on Amazon can be extremely rewarding. I hope this guide helps you maximize your selling success while avoiding unnecessary account terminations! Let me know if you have any other questions.