Amazon’s Return Policy has come under fire recently as more and more customers are being suspended or banned for returning items too often.
Customers enjoy shopping on Amazon because of their customer-friendly return policies. Customers can return items they don’t want in a variety of ways. However, Amazon’s actions suggest that they believe some customers are taking advantage of the system. The company says that bans for returns are rare but will not divulge any information on exactly how many customers have received bans or suspensions.
Amazon’s shipping costs in 2019 alone checked in at about $37.9 billion.
This astronomical number represents about 13 percent of total company sales, which explains why Amazon is turning over every rock to find the best and most monetarily efficient method of shipping. Although Amazon is the largest e-retailer in the world, it operates with a slim margin of profit in order to compete with companies like Walmart and thus must ensure their customers’ returns do not get out of hand.
“We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time,” an Amazon spokesperson said. “We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers.” -Amazon Spokesperson, 2018
Outrage has grown amongst customers as more and more receive bans from making too many returns. This has caused some affected users to take to social media in frustration.
Nir Nissim, a 20-year-old from Israel, told the Wall Street Journal that he received an email in March 2018 alerting him that his account had been banned because he was in direct violation of the company’s policy. Meanwhile, Nissim has a $450 gift card balance on his account that he was unable to use. He contacted Amazon “every day for a week or two” out of frustration, unaware of how he violated the policy.
After weeks of prodding, Nissim was told that his account was shut down because he had made too many returns. He later told the WSJ that he had returned just one item in 2018 and four in 2017.
A North Carolina native named Nancy Von Gunten shared a similar story with a local news outlet, WRAL:
“I went to return something, and they allowed me to return it, but I got a ‘warned’ notice on my receipt that said I had excessive return activity.” Von Gunten detailed. “I can still shop; I just can’t return anything because my percentage of returns on this return activity report that I received is higher than what they allow.”
Von Gunten will simply have to grin and bear it if one of her items is defective or incorrect on a future order since she cannot return anything. This policy could cause other affected shoppers like Von Gunten to stop purchasing through Amazon in the future.
Nathan Peterson, an Illinois native, tweeted out this picture of his purchases and returns from 2013-2018, accompanied by a caption that reads:
“Amazon just permanently shut down my family’s account for ‘too many returns.’ No warning. #AmazonClarity”
Another Amazon shopper, Claire Bochner, took to Twitter to voice similar frustrations, posting this picture of an email that Amazon had sent her which she felt was particularly impersonal:
Bochner’s accompanying caption read:
“@amazon – wow, great customer service, so personal and caring! Do u even read my return reasons (like 6 purchases in the last year…and that’s too many?) and a replacement for something I NEVER [received]. #BadCustomerExperience #onlineshopping #Horrible #ShopLocal #BoycottAmazon”
If more and more customers become frustrated as a result of Amazon’s new policy, they could risk losing their valued customers, negatively impacting sellers as a result.
Amazon does not actively inform customers in its return policy that certain behaviors or patterns of returns can get them banned, and should consider revising that to make it more clear.
However, the company does say in its terms and conditions that it, “reserves the right to terminate accounts in its sole discretion.”
If the company does not revise its policy, sellers may start to worry that more people will boycott the company.
Amazon’s Return Policy – How One Seller Got Around His Ban
CNet.com spoke with a banned Amazon shopper who outsmarted the company. He is a 22-year-old student who chose to remain anonymous received an email from Amazon in 2015 stating, “we noticed a number of your orders have been returned.”
“I totally understand why they do this,” he said. “And now that I’ve been through it, I know how to prevent it and get around it in the future.”
The anonymous individual started making electronics repairs for fellow students with parts he ordered from Amazon and would return parts that were defective or no longer necessary for the repairs.
“Needless to say, my return history was extensive,” he said. “It wasn’t to me crazy, but maybe to them.”
After his first warning, he received another email that read, “While we expect occasional problems with orders, such large numbers of returns can suggest that customers are unaware of our return policies.
We want to call your attention to our returns policies because repeated misuse can result in the closure of your Amazon account,” the email continued.
After he continued operating with the same return habits, Amazon closed his account, refunded a portion of his Prime membership and canceled all of pending orders from said account.
He decided to open new accounts with different email addresses or credit cards, but Amazon quickly figured out that they were linked by shipping addresses as well as his computer’s IP address.
He realized that if he added a VPN (virtual private network) to his computer, his IP address would be hidden. With a VPN in tow, he easily was back in business with similar habits and purchases as before.
After a little over a year of being banned, the anonymous source created a new account with his real name and without the VPN, suggesting that Amazon’s “bans” are not for life.
“I don’t know what the length of time is, but when they ban you, it’s not forever,” he said.
There may be many others who have been banned disguising themselves with VPNs and fake names, which could be another mountain that Amazon needs to climb.
If sellers try to track a user and cannot find an IP address, that should be an immediate red flag.
Amazon’s Return Policy – Are Retailers Spearheading These Bans?
Amazon must toe the line on its return policy to ensure customer satisfaction, while also avoiding scams and misuse of the return policy by customers- all while operating its multi-billion dollar industry.
To fight this, many larger retailers who sell through Amazon such as Best Buy have begun tracking the return rate and behavior of individual customers and products to determine what the issues are and how to minimize lost revenue from returns.
The third-party service that Best Buy uses is called The Retail Equation, which is a service based in Irvine, California that suggests “more than 10 % of all general merchandise retail sales transactions are processed through return optimization solutions from The Retail Equation”.
This third-party platform asses customer action and gives the customer a “rating” or “score” based on algorithms formed from their return habits juxtaposed with the return habits of others with similar products. This service also strongly suggests a limit on how many items a customer can and should be allowed to return.
If Amazon and its top retailers are taking advice from The Retail Equation, other sellers should consider doing the same. If sellers use this platform, they could better ensure that they are not being taken advantage of.
The Retail Equations site suggests that they have saved sellers nearly $1.2 billion as of June 7th, 2018 and implores retailers to “make better-informed, real-time decisions with unparalleled industry and data science expertise, and the world’s largest retail transaction database.”
While Amazon and its retailers attempt to find perfect harmony between limiting returns and ensuring customer satisfaction, sellers should take action to protect themselves. Sellers should keep in mind the types of customers that are returning which types of products and consider using The Retail Equations platform to protect themselves from customers looking to take advantage of them.