As an experienced seller, I often get asked – should I sell on Amazon or Walmart? There‘s no one-size-fits-all answer. When choosing a marketplace, one of the most important factors to evaluate is the return policy. From my years managing ecommerce businesses, I‘ve found taking the time to thoroughly understand each platform‘s policies is crucial to minimizing losses and providing a seamless returns process.
After comparing their policies in-depth, my recommendation is for most businesses to start on Amazon due to the increased protections and support they provide sellers throughout the returns process. However, Walmart can also be a good fit depending on the business model and product types. Read on for my detailed analysis.
How Return Policies Impact Online Sellers
Before diving into the details, let‘s look at why return policies are so crucial for ecommerce businesses.
Product returns are simply a reality of selling online. Research shows about 30% of items purchased online are returned, compared to only 8-10% for in-store retail. As an online seller, you have to accept that returns will happen and plan accordingly.
Returns directly impact your bottom line. From lost revenue to return shipping and restocking costs, they can quickly eat into your profits if not managed properly.
Just as importantly, the returns experience affects your brand reputation and customer loyalty. Seamless, hassle-free returns processes keep customers happy. Difficult ones result in negative reviews and chargebacks, damaging your marketplace standing.
With this context, let‘s look at how Amazon and Walmart‘s policies compare.
Walmart Returns Policy Overview
Walmart aims to balance customer satisfaction with seller flexibility in their policies. Here are the key details:
- Return windows: 90 days for most new, unopened items. Shorter windows of 14-60 days for some categories like electronics, luxury goods, or grocery.
Holiday returns: Typically extended until end of January for purchases made in November and December.
In-store returns: Allowed for free at Walmart stores, except hazardous materials. Makes returns convenient for customers.
Walmart Marketplace sellers: Must abide by Walmart‘s minimum return policy standards – 14 days for electronics/luxury, 30 days for other items.
Restricted items: Prescriptions, firearms, home test kits not eligible for return. Walmart reserves right to limit.
Walmart Marketplace Promise: Provides issue resolution within 48 hours for third-party seller orders. If unresolved, Walmart takes action on the customer‘s behalf.
Overview of Amazon‘s Returns Approach
Amazon‘s policies focus on customer-centricity, consistency, and utilizing technology to simplify returns.
- 30 day return window: Standard for items shipped from Amazon warehouses, with some exceptions. Shows Amazon values convenience.
Holiday returns: Typically extended until end of January for purchases in November/December. Provides extra flexibility.
Amazon-fulfilled returns: Handled under Amazon‘s policies. Prime items get free return shipping. More consistent experience.
Merchant-fulfilled returns: Seller responsible for setting policies within Amazon guidelines. Adds complexity for sellers.
A-to-Z Guarantee: Provides protection if seller doesn‘t meet requirements. Gives customers confidence.
Returnless refunds: Sellers can authorize refunds without requiring a return on eligible items. Aimed at reducing costs.
Automation: Tools like return predictions and instant refunds utilize AI to simplify returns. Benefits sellers and customers.
Comparing the Pros and Cons for Sellers
Next, let‘s do a side-by-side comparing the advantages and disadvantages of each platform‘s policies from the seller perspective.
Walmart Returns Policy
- 90 day window provides more time for customers to return items
- In-store option makes returns convenient for shoppers
- Minimum standards create consistent experience across sellers
- Marketplace Promise provides issue resolution
- Shorter windows on some categories increases return rates
- Customization allows inconsistency across sellers
- Less protection from fraud than Amazon
- Seller responsible for return shipping costs
Amazon Returns Policy
- 30 day window sets consistent expectations
- A-to-Z Guarantee protects sellers from fraud
- Automation and AI simplify processing
- Provides recommendations to manage returns
- Shorter 30 day window may increase return rates
- Stricter policies offer less customization
- Added complexity for merchant-fulfilled returns
Recommendations for Sellers by Business Model
Now that we‘ve compared the pros and cons, let‘s discuss which marketplace may be a better fit depending on your business model and resources.
Recommendation for Most Retail Businesses: Start on Amazon
For most new ecommerce businesses selling finished products, I recommend starting on Amazon. The increased support and seller protections outweigh the added complexities.
Amazon‘s A-to-Z guarantee protects against fraudulent returns, which new sellers may not have the expertise to identify. Automation also simplifies processing a high volume of returns.
The stricter policies create a more consistent experience for customers. This helps build trust in your brand, especially as a new seller.
Sellers do give up some flexibility and pay higher fees. But overall, the support Amazon provides with returns makes it the safer choice for getting started.
Walmart Recommended for Experienced Sellers
For established sellers with experience managing returns, Walmart provides more flexibility to customize policies.
The 90 day window gives more time to resell returned inventory. You can set different windows by product based on return rates and sales velocities.
Handling returns yourself does require resources and processes. But you save on the 15% referral fees charged by Amazon for returns.
Walmart may also be a better fit for locally focused sellers, since most returns will be handled in-store.
Consider Both Marketplaces for Hybrid Model
A hybrid approach where you sell on both Amazon and Walmart can also make sense for some sellers – especially brands looking to scale.
This provides the opportunity to evaluate which policies and programs work best for your business across the two marketplaces. You can utilize the strengths of each.
The hybrid model does require significant bandwidth. As you scale sales, having dedicated account management support can help ensure you stay compliant with each platform‘s policies as you sell across multiple channels.
Tips for Minimizing Losses from Returns
While returns are inevitable in ecommerce, there are still actions sellers can take to reduce return rates and losses. Here are my top tips:
- Provide extensive product details, high-quality images, sizing guides to set accurate expectations
- Offer free and easy returns to remove friction (pay for return shipping yourself if possible)
- Send proactive return/exchange confirmation emails to customers after purchase
- Analyze return data frequently to identify problem products or listings
- Tighten return criteria for high-risk categories like electronics
- Outsource returns processing to specialized companies to reduce costs
The time invested upfront in training your team on best practices goes a long way towards maximizing sales and minimizing losses from returns over the long term.
The Bottom Line
Returns and refunds are a critical component of the online buying experience. Ecommerce sellers must carefully evaluate return policies before choosing Amazon, Walmart, or both marketplaces to sell their products.
While Walmart offers flexibility, I generally recommend new sellers start on Amazon due to the strong protections and support they provide throughout the returns process. However, experienced sellers may benefit from the customization options available on Walmart. Some sellers find success with a hybrid approach across both marketplaces.
No matter which platform you choose, implementing best practices around setting expectations, making returns easy, analyzing data, and outsourcing processing are key factors that will help maximize profits while maintaining high customer satisfaction.
I hope this detailed overview has provided valuable insights as you evaluate the return policies at Amazon and Walmart. Don‘t hesitate to reach out with any other questions! I‘m always happy to share my knowledge as an ecommerce account manager and Amazon seller.