Amazon’s new marketplace returns policy may force some sellers from the platform, but it could boost customers’ trust in third-party retailers that fulfill their own orders.

A new Inc. returns policy is putting some marketplace sellers on edge. But it may give customers more peace of mind.

An updated return policy, which Amazon plans to implement in October, would automatically authorize returns to sellers who ship items themselves, standardizing the return process already in place for purchases made from Amazon or fulfilled by Amazon. According to an email posted to Amazon’s marketplace seller forum, Seller Central, the updated policy will allow customers to “instantly” print shipping labels after requesting a return.

Sellers can exclude any items they want from the automated return process, and it’s still an opt-in system that could leave merchants on the hook for steep return costs if they leave a bulky item out of the policy. It’s also unclear if Amazon will rank products that have automated returns higher in search results than those that don’t adhere to the updated policy.

“I was completely shocked when I received this email,” said Brian Greenspan, chief operating officer at Inmod, an online retailer of furniture, lighting and home decor. “We ship furniture, and [returning] furniture can be quite costly at times because of the large cartons. This change is going to make it impossible for us to sell our products on Amazon.”


Greenspan said Inmod, No. 791 in the Internet Retailer 2017 Top 1000, is considering removing its small parcel products from Amazon due to the new policy. That would cut out about 45% of what the furniture retailer currently offers on Amazon. About 10% of Inmod’s current sales come from the online retail giant.

However, there are significant benefits to the new policy for shoppers and sellers. Customers won’t have to wait for sellers to reply to them before shipping items back, and sellers can eliminate the time spent authorizing return requests. Amazon’s only comment to Internet Retailer is that when customers know a return will be easy, they are more likely to make a purchase.

“Anything Amazon can do to improve the customer experience and help shoppers feel comfortable buying on Amazon, no matter who fulfills the order, will help maintain trust and therefore sales on the platform,” said Kiri Masters, CEO at Bobsled Marketing, a consultancy that helps retailers market on Amazon. “By lessening the ‘risk’ of buying from a third party on Amazon, more customers might be willing to venture outside of buying only products which are Prime eligible.”

Prime is Amazon’s customer loyalty program that costs $99 a year or $10.99 a month and gives consumers access to fast shipping options, streaming video and music, and other benefits.


Concerns still persists in categories like electronics and furniture, where sellers may rather spend time walking customers through setup challenges than pay for return shipping on bulky or delicate items. For Ice Shaker founder Chris Gronkowski, many requested returns are the result of buyers not reading the product description. Ice Shaker sells vacuum-insulated containers for water and protein shakes. It gets about half of its sales through Amazon.

“I have contacted customers to ask them why they are returning products and I have had answers as crazy as the Ice Shaker doesn’t hold enough liquid, when the listing clearly states that it is a 26-ounce cup,” Gronkowski said. “Amazon’s return policy is deadly toward small business seller because it has given buyers the idea that you can purchase anything you would like and return it within 30 days, no matter the reason or the condition of the product.”

Another new feature Amazon noted in its email to its marketplace sellers is the “returnless refund,” an opt-in program that allows sellers to issue refunds for items they don’t need to be physically returned. The idea of offering refunds without getting the product back raised some sellers’ eyebrows.

“In other words, customers get things from us for free!” one seller wrote on Seller Central. “Is this a joke?”


However, the process can save on return shipping and processing costs, especially for low-value items. According to the email Amazon sent to sellers, returnless refunds have been highly requested by retailers.