As an experienced ecommerce seller, you likely know how invaluable an Amazon Prime membership can be. The free fast shipping, product discounts, and other Prime perks help boost sales and streamline operations for any FBA business selling on Amazon.
But there may come a time when the costs of Prime no longer make sense for your business. Or perhaps Amazon‘s recent changes to Prime membership requirements don‘t work for your seller account anymore.
In any case, you might find yourself needing to cancel your Prime membership – and wondering if you can get a refund.
Well, I have good news!
Amazon does allow refunds on cancelled Prime memberships. Read on as I, William Decker, break down everything an established ecommerce seller like you needs to know about cancelling Prime and getting your money back in 2023.
When Does Canceling Prime Make Sense for Experienced Sellers?
Before jumping straight to cancellation, let‘s first look at when canceling Prime could be strategic for established FBA businesses:
Rising costs – Amazon increased Prime fees 17% to $139 in 2022. If free shipping volume doesn‘t justify the hike, it may no longer provide the same value.
Account limits – Managing multiple seller accounts can lead Amazon to ban Prime on certain accounts due to policy violations.
Changing requirements – Amazon tightens Prime eligibility for sellers periodically. Your products may no longer qualify.
Tax considerations – Prime fees are deductible business expenses. Canceling when cash flow is tight can help manage tax liabilities.
Sell-off transition – When downsizing or leaving Amazon, canceling Prime helps reduce unnecessary costs.
So weigh your specific ecommerce goals before deciding to cancel Prime altogether. And consider switching to monthly Prime if you want more flexibility.
Maximizing the Value of Prime for Your FBA Business
Of course, I always advise maximizing your use of Prime before canceling, as the benefits are substantial for any seller:
Visibility boost – Prime listings get prominence in Buy Box algorithm, increasing sales.
Faster shipping – Prime‘s free 2-day shipping makes customers more likely to buy from you.
Customer trust – Prime badge denotes a reputable seller that customers can trust.
Volume discounts – High shipping volume unlocks discounts up to 70% off commercial rates.
Deals and promotions – Prime exclusives like Lightning Deals help quickly sell inventory.
Product launch edge – New product launches see higher conversions with Prime shipping.
Take advantage of all these factors before deciding to forego Prime. But once you evaluate the costs versus benefits for your business, cancelling and getting a refund is definitely possible.
Step-by-Step Guide to Cancel Amazon Prime
When you‘re ready, cancelling your seller account‘s Prime membership takes just a few steps:
Go to "Accounts & Lists" in your Amazon seller account.
Click "Your Prime Membership" under "Your Account".
Find "End Membership" and select "Cancel My Benefits" on the next page.
Confirm cancellation on the final page.
Once you complete the process, your Prime membership will immediately be terminated. You‘ll lose all Prime benefits like free shipping and access to Lightning Deals.
However, you can continue selling as normal on Amazon without Prime. Your listings won‘t disappear or get demoted. But sales may take a hit over time from losing Prime perks.
What is Amazon‘s Refund Policy When You Cancel Prime?
This is what you really want to know – will you get your money back after cancellation?
The short answer is yes, but how much refund depends on your Prime usage.
According to Amazon‘s Prime Terms and Conditions:
Cancel within 3 days – Full refund
Cancel after one order – Likely full refund
Cancel after a few orders – Partial prorated refund
Cancel after extensive use – No refund likely
The more your business took advantage of Prime shipping and benefits, the smaller your refund will be when cancelling.
But you can always contact Amazon customer service to find out the exact refund amount for your seller account. Have your details ready to inquire.
Here are a few examples of refund amounts for FBA businesses after cancellation:
|Prime Usage Level||Refund Received|
|1 order placed||Full $139 refund|
|3 orders with Prime shipping||$60 prorated refund|
|8 orders in 6 months||$25 partial refund|
|Heavy use over 1 year||$0 refund|
So gauge your expected refund based on how extensively you‘ve used the Prime benefits.
Why Do Refund Amounts Vary?
Amazon considers Prime refunds on a case-by-case basis, depending on the usage and tenure factors below:
Recent sign-up – More likely to get full refund when newly enrolled.
Low order volume – Few Prime shipments means bigger refund.
Longer membership – Canceling after 1 year usually means smaller refund.
High order frequency – Regular Prime shipping reduces refund eligibility.
Prime-heavy activity – Using Prime Video, Music, Photos, et al. decreases refund.
So approach refund expectations based on your specific membership history – don‘t assume you‘ll get everything back!
How Do Prime Cancellation Refunds Get Issued?
Once approved, Amazon refunds cancelled Prime memberships by issuing the amount back to the original payment method on file:
Credit card payments – Refund credited back to the same card used to pay for Prime
Gift cards – Refund will be applied as Amazon credit to your seller account
Amazon Pay – Refund added to your Amazon Pay account balance
Refunds typically process within 2-3 days after cancellation, though it may take 5-7 days to show up in your account or statement.
One tip: Don‘t close any payment accounts before the refund processes, or that money could be lost!
Tax Implications of Prime Refunds for FBA Sellers
One important thing to remember is Prime fees are tax deductible for ecommerce businesses. This means any refund you receive could be considered taxable income.
Here are some key things sellers should keep in mind if you receive a Prime cancellation refund:
Report refund amount as income on sales tax return
Save refund documentation with annual tax records
Refund could impact income deductions and write-offs
Not reporting can lead to trouble if refund is discovered
So consult a tax advisor when claiming business expenses and deductions after getting a Prime cancellation refund. You want to make sure you file properly.
How Do Other Amazon Memberships Compare for Refunds?
Beyond regular Prime, Amazon offers other membership options like Prime Student, Amazon Household, Prime Video, and Amazon Music Unlimited.
Here is how the cancellation and refund policies for these other memberships compare:
|Membership||Key Refund Terms|
|Prime Student||– Full refund within 30 days |
– Partial if cancelled after 30 days
|Amazon Household||– Follows regular Prime refund policy based on orders placed by all members|
|Prime Video||– Full refund if never used|
|Amazon Music Unlimited||– Full refund within 30 days |
– No refund after 30 days
So double check specific membership agreements before assuming you can get refunds on non-standard Prime plans. Time windows tend to be much shorter.
5 Pro Tips to Save on Prime As a Seller
Instead of cancelling Prime altogether, here are some savvy ways high-volume sellers can reduce their Prime overhead:
1. Request volume pricing – Negotiate custom Prime pricing based on your high shipping volume.
2. Split costs with household – Add family to share your Prime benefits and fees.
3. Deduct fees as expenses – Claim Prime fees as tax write-offs to recoup some costs.
4. Don‘t overpay upfront – Pay monthly to avoid big lump sum Prime payments.
5. Use discounted memberships – Enroll with a .edu address for cheaper Prime Student.
Getting the most bang for your Prime membership buck will ensure you maximize the benefits for your ecommerce business.
Can You Reactivate a Cancelled Prime Membership?
Even after canceling Prime, you can restart your membership at any time by reactivating your account.
Simply log into Amazon, go to "Manage Your Prime Membership", and click "Reactivate". Pay the annual or monthly fees again, and your Prime benefits will be restored.
However, you won‘t get any refund or credits for the gap between cancelling and restarting. It‘s not like pausing your membership – it‘s all or nothing with Prime.
What if You Forgot to Cancel After a Prime Free Trial?
We all love Amazon‘s 30 day Prime free trials. But forgetting to cancel before the trial ends means you‘ll be on the hook for full membership payment.
Unfortunately, in this case Amazon will not issue any refund if you missed cancelling before getting charged. Their policy is no refunds granted if you initiate paid Prime membership through a trial.
So either be sure to cancel before the 30 days ends, or accept you made an informed purchase. Your only option then is immediately cancelling future renewals.
Return Policies are Unrelated to Prime Refunds
One final note – getting refunds for cancelled Prime has no impact on Amazon‘s return policies for item orders. Those are completely separate.
Prime members and non-Prime members have the same 30 day return windows and refund eligibility on Amazon purchases. Prime does not get you any special perks for item returns.
So don‘t confuse Prime cancellation refunds with Amazon‘s seller return policies. Those still apply equally whether you have Prime or not at the time of purchase.
The Bottom Line – Maximizing Value While Having Refund Options
As an experienced ecommerce seller, you now have all the information needed to make smart decisions around Prime memberships and possible refunds.
The key takeaways are:
Evaluate when canceling Prime aligns with your seller business goals
Maximize Prime‘s value before considering cancellation
Follow proper steps to cancel your membership
Expect full or partial refund based on your Prime usage
Understand how refund mechanics and taxes work
Compare other Prime plans carefully for differences
Use pro tips to reduce Prime costs and retain benefits
Reactivate is possible if you change your mind
With this comprehensive guide, you can take control of your Prime membership, maximize the benefits, and refund options if and when cancellation makes sense for your FBA business. Let me know if you have any other questions!