To Ship or Not to Ship: Does Amazon Refund Shipping Costs?
The short answer is yes, Amazon does offer refunds for shipping costs in many cases. But the full picture is more nuanced, with policies varying based on your fulfillment method, product category, customer location and other factors. This detailed guide will walk you through everything you need to know about getting shipping costs refunded on Amazon returns as a seller.
As an experienced Amazon seller, I’ve navigated these waters many times. With billions in ecommerce sales and over 20% of products returned, Amazon‘s return and refund policies impact us all. I’ll share insights from my years managing Amazon accounts and selling through Fulfillment by Amazon (FBA) and self-fulfillment. My goal is to help you minimize return shipping headaches and costs, so you can focus on growing your business.
FBA vs. Self-Fulfilled: Who Pays for Returns?
The first question to address: are your orders fulfilled by Amazon through FBA, or are you self-fulfilling orders? This determines who’s on the hook for return shipping costs.
With Fulfillment by Amazon (FBA), Amazon handles the entire fulfillment process when an order is placed. As part of their customer service, they‘ll refund the original shipping fees they collected if an FBA order is returned.
For example, if Amazon initially charged the customer $5.99 for standard shipping on their FBA order, that $5.99 would be refunded back to the customer upon return. It streamlines the process for you as the seller.
With self-fulfilled orders, you handle the fulfillment and shipping yourself. In this case, Amazon does not refund original shipping costs to the customer if they return an order.
For self-fulfilled returns, you either provide a return shipping label or have the customer cover return postage costs. So those initial shipping fees paid by the customer are generally lost, unlike with FBA.
When Does Amazon Refund Shipping Costs?
While the FBA versus self-fulfilled distinction is important, Amazon‘s exact policies on refunding shipping also depend on other factors:
Product Category Specific Policies
Amazon sets category-specific guidelines that impact return shipping refunds:
- Apparel and fashion items sold directly to U.S. customers qualify for Amazon’s Free Returns program. This provides pre-paid return labels, and Amazon refunds the label cost (around $5-10) back to the customer. For sellers, Amazon charges that return shipping label fee back to your account.
Baby products like diapers have more restrictive return policies. If the wrong item is accidentally shipped and the issue is not Amazon’s fault, they do not refund return shipping fees to make it right for the customer.
Review Amazon’s detailed category-by-category policies to understand qualifications for return shipping refunds.
Customer Location
Where your customer is located can impact how return shipping is handled:
- Shipping rates, speed and refund eligibility often varies based on the customer’s country or region. Amazon sets policies and programs specific to location.
In the U.S., Amazon offers pre-paid return postage labels for most items. In Europe, sellers are responsible for providing return labels.
Customers in some locations may have access to discounted return shipping rates or free return options that Amazon subsidizes. This makes it more affordable to return items.
Review international return policies by region to understand associated shipping refunds.
Reason for Return
Why an item is returned also affects whether Amazon refunds the original shipping fees:
- If the return reason falls under customer fault (e.g. no longer wanted, found better price), Amazon does not refund original shipping costs.
If an item is defective, damaged, or Amazon/seller made an error (sent wrong item), they refund 100% including original shipping under the A-to-Z Guarantee.
For instance, if a customer selects “no longer needed” as the return reason, they likely have to pay return shipping themselves and would not get original shipping costs back. But if the item arrives broken due to fulfillment error, Amazon will refund the full amount paid including any shipping fees.
Return Rate Statistics and Trends
To provide context on the scale of Amazon returns:
- Amazon‘s return rate is around 20% across the marketplace, much higher than the 10% average for in-store retail.
Apparel and shoes bought online have the highest return rates at 30-40%. Electronics and home goods are returned 10-20% of the time.
Total ecommerce return volume is estimated at $550 billion per year. Amazon drives a large chunk of that.
Some sellers see over 30% of their Amazon orders returned, depending on product category.
Managing returns and associated costs at this scale takes strategic thinking. Having visibility into the nuances around shipping refunds allows you to set accurate expectations with buyers.
Navigating Amazon’s Refund Methods
Amazon offers several options for processing refunds, which impact timelines and processes:
Standard refund: Issue refund after receiving the returned item back. Simple but can increase total processing time.
Returnless refund: Issue refund without requiring the customer to ship the item back first. Provides faster refund but less opportunity to verify condition.
Refund at first scan: Refund is automatically issued as soon as the returned package is scanned by Amazon upon receipt at a facility. Used for FBA and seller-fulfilled Prime orders. Fastest option from a customer perspective.
Here is a comparison of typical refund processing times based on method:
| Refund Method | Processing Time* |
|---|---|
| Standard | 14 days from return request |
| Returnless | 5 days from return request |
| First Scan | 2 days from item receipt |
*From return authorization through issuing refund
Understanding the timeframes and processes for each method allows you to communicate next steps and set expectations for Amazon buyers.
Now let’s walk through exactly how to handle returns and issue refunds step-by-step.
Step-By-Step: Issuing Refunds on Amazon
To issue a refund as a seller on Amazon:
- Login to Seller Central and go to Manage Returns to review new return requests.
Choose to authorize or decline the request based on policies and reason given.
If authorizing, wait to receive the returned item back from the customer.
Once returned item is received, process a refund for the full or partial approved amount.
For Amazon Pay orders, issue refunds through the Refund API in Seller Central.
If there was an error on Amazon’s end, such as a damaged item or incorrect fulfillment, you can submit a reimbursement claim to recover associated costs like refund shipping labels.
I advise working with an Amazon account manager for complex reimbursement claims to ensure proper documentation and representation. Having your own dedicated Amazon expert smooths the process.
Best Practices For Managing Returns
Here are some top tips for processing Amazon returns:
- Clearly communicate return instructions and policies upfront to set expectations with buyers. List policies on your listings.
Confirm correct return shipping addresses to avoid issues receiving returned items from customers.
Consider Amazon’s Returnless Refunds program to simplify processing for self-fulfilled orders.
Monitor reasons selected for returns to identify any product issues or gaps in communication.
Have an action plan ready when return rates spike, such as during holidays.
-Enroll in Amazon programs that provide discounted return shipping to lower costs.
Taking a proactive, strategic approach enables you to handle high return volume smoothly while keeping profitability and customer satisfaction high.
The Bottom Line
So back to the original question – does Amazon refund shipping costs? In many cases, yes, but it depends on your fulfillment method, product categories, buyer location and reason for the return.
Hopefully this guide provided clarity around Amazon’s return shipping policies and equipped you to make informed decisions for your business. With billions in ecommerce volume, returns are simply part of the territory. Focus on reducing friction for your customers and streamlining processes on your end.
If managing complex Amazon returns feels overwhelming, don’t go it alone. As an experienced FBA seller and account manager, I’m always happy to advise sellers looking for guidance navigating Amazon’s intricate policies. Feel free to get in touch with any questions!
