
Amazon's new refunds policy will 'crush' small businesses, outraged sellers say - supercanuck
https://www.cnbc.com/2017/08/02/amazons-new-refunds-policy-will-crush-small-businesses-say-sellers.html
======
sxates
Anecdotal experience buying on Amazon recently:

Bought a new induction cooking pan. A nice one at $90. Didn't really pay much
attention to who was selling it, just bought it like I do everything else from
Amazon. It took about two weeks to arrive because it was from an independent
seller, and was not 'Prime eligible'.

When it arrived, I took it out of the box and was immediately disappointed. It
was really heavy, and the handle was shaped and angled in a way that made it
hard to maneuver such a heavy pan. It'd be really difficult to do the usual
flip and toss motions when cooking things.

I didn't want to spend $90 on a pan I would hate using, so I put it back in
the box and requested a return.

That was when I found out exactly what the independent seller's return policy
was. 1) I have to pay for return shipping (USPS best price was $38), 2) I have
to pay them for the original 'free' shipping as well (no idea how much that
was), and 3) I also have to pay a 25% restocking fee for an item in perfect
resell-able condition. So in returning my $90 pan I figured I wouldn't get
more than ~$30 back. I decided between being out $90 and having a pan or being
out $60 and having nothing, I might as well keep it.

So I suppose that was a win for the seller - they successfully discouraged me
from returning the item, which I'm sure would have cost them money. But it
also discouraged me from buying anything on Amazon that isn't Prime, and it
doesn't reflect well on Amazon that I had an experience completely contrary to
their customer service values.

~~~
richthegeek
Wow, I really am amazed how few consumer protections you seem to have!

In the UK we're protected on two levels: firstly the "Distance Selling
Regulation" means we have the right to cancel many contracts/purchases made
not-in-person within 14 days of delivery.

And secondly, if a good is faulty, not as described, or unfit for purpose then
we have a right to a refund under those terms also.

Probably because of these already strong rights, Amazon UK (and most
retailers) go beyond that and simply offer a 30 day "no questions asked"
return policy in most cases.

I didn't realise until now how much I took it for granted!

~~~
cfn
Be that as it may, I had a similar experience with an independent seller at
Amazon UK. I bought a pan that arrived with a small defect and they told me I
would have to pay the postage back (25 Euros on a £30 or £40 pan - I was
buying from abroad). I also ended up keeping the pan and now avoid independent
sellers as much as possible.

~~~
jorvi
Why not do a chargeback on your creditcard (or raise a PayPal claim)? The law
is very clear, if an item is faulty or not as described the seller is on the
hook for all costs. This includes return shipping and/or sending you a
replacement.

A lot of sellers will try to strong-arm you but if you just do the
chargeback/claim they have no option but to eat the loss. Creditcard companies
and PayPal thankfully nearly always back buyers, tilting the power balance
back to the consumers' side :)

~~~
hak8or
In Europe, for some sad reason credit cards are very rarely used and many
stores don't accept them. Not to mention, if you do a charge back against a
store like Walmart or Amazon, you won't be able to shop there anymore because
they will ban you.

~~~
jorvi
In day-to-day shopping creditcards are very rarely used, but I'm pretty
confident that for internet purchases creditcards aren't that rare. And as far
as being banned goes: of course you first raise the issue with Amazon. Amazon
says its an independent seller, go deal with them. You try to work it out with
the seller, he doesn't budge, you show him the law. Still doesn't budge, you
raise it with Amazon again. If Amazon doesn't budge, tell them that you are
lawfully entitled and will do a chargeback, and that they can deal with the
independent seller acting illegally (and if they're smart they just chargeback
the seller). If they would still ban you then, that will be one hell of a
juicy court case.

------
sharkweek
Timely Onion article:

"My Advice To Anyone Starting A Business Is To Remember That Someday I Will
Crush You"

[http://www.theonion.com/blogpost/my-advice-anyone-
starting-b...](http://www.theonion.com/blogpost/my-advice-anyone-starting-
business-remember-someda-56539)

But in all seriousness... as a consumer, I shop on Amazon to not think twice
about having to deal much with returns, shipping, etc.

I understand that this is probably painful for a lot of people who built up
businesses on the Amazon platform, but this is something that also seems
pretty obvious.

------
tomduncalf
From a consumer point of view, this is a good thing. It sucks to have a
different experience depending on whether something ships from Amazon or a
third party, especially as their easy return policy is one of the main reasons
I continue to use Amazon and pay for Prime.

I can understand sellers frustration, but to my mind that's the price of
having your products featured on Amazon. I've never encountered a third party
who has refused a refund, so in reality I don't know if that much will change
for them, unless there's a huge amount of abuse of the returnless refunds.

~~~
currymj
it's a good thing in the short term, but it also feels like an exercise of
monopoly power by Amazon, which is going to be bad for consumers in the long
run. can a business afford not to be listed on Amazon? in the long term, does
Amazon have any interest in listing third parties?

at some point I think the answer to both of these questions will be no, and
then I'd expect the good customer experience to erode pretty quickly as Amazon
realizes they can squeeze as much profit as they want out of customers and
retailers.

~~~
petra
Amazon is interested in listing 3rd parties: it's useful to have someone else
take all of the product risk , while you offer the ideal store for your
customers and do all the more low-risk parts like logistics, managing a site,
selling low-risk products directly while someone else supply excess demand.

~~~
jasonlaramburu
Frankly I don't see the benefit in this program for Amazon. 3rd party sellers
often charge less, meaning less revenue for Amazon. The highly variable
customer service also degrades Amazon's brand. Finally, Amazon still has to
front the cost of any return/refund from a 3rd party seller, so there is still
risk.

------
fenwick67
> Additionally, Amazon said that it's introducing "returnless refunds," a
> feature that the company said is "highly requested by sellers." The change
> enables sellers to offer a refund without taking back an item that may be
> expensive to ship and hard to resell.

Wow, I can literally just say "I don't like it", and there's a chance they'll
literally just give me my money back, but let me keep it?

~~~
Shank
Amazon customer support has told me to discard items that've been defective,
rather than ship them back, on multiple occasions. There's probably an
internal policy about how many of these can be performed by a customer, but
it's extremely convenient when they let you.

~~~
will_brown
Can you give examples of what you mean by a defective product?

Do you mean the legal definition[1], more or less as in "unsafe"? Because if
so, the reason they are likely telling you to discard defective product is so
it can't be used as evidence in a liability case in the instance an unsafe
product has caused any harm.

[1]
[https://en.m.wikipedia.org/wiki/Product_defect](https://en.m.wikipedia.org/wiki/Product_defect)

~~~
kbutler
"A product defect is any characteristic of a product which hinders its
usability for the purpose for which it was designed and manufactured."

This does not imply "unsafe".

~~~
will_brown
I don't think you read the second sentence defining the legal definition:

>Product defects arise most prominently in legal contexts, where the term is
applied to "anything that renders the product not reasonably safe"

------
jasode
It's interesting how each market platform is trying to tweak the equilibrium
of honest/dishonest buyers vs honest/dishonest sellers.

Beyond Amazon specifically, the big picture trend is that any marketplace of
3rd-party sellers which includes eBay, PayPal, Uber, Airbnb, etc will always
tilt the advantage towards the buyers.

E.g. Buyer scams sellers by claiming he got a bad product and Paypal will
instantly issue a chargeback without any investigation.

If sellers try to change the balance of power by shifting to a platform that's
more favorable to sellers (e.g. p2p OpenBazaar, craigslist, etc), they'd have
to calculate the revenue loss from a smaller marketplace (less buyers'
eyeballs). It's going to depend on the type of items if the loss is
worthwhile.

E.g. If you're a seller that happens to have the unreleased iPhone 8 prototype
to sell, you can use OpenBazaar to sell it because there would be plenty of
buyers that don't need refund assurances from Amazon. If the item gives the
seller leverage, the seller could also demand more buyer-unfriendly terms such
as mandatory payment in Bitcoin instead of Paypal.

When it's not a multi-sided platform, that's when rules can tighten up to
favor the seller instead of the buyer. E.g. Costco stops generous 90-day
returns on big-ticket electronics and computers because buyers were "renting"
video cameras for free.

(Cynical conspiracy hat on: it's possible Amazon expected the sellers'
backlash and they don't care because this new policy was their way to cull the
"weak" sellers that couldn't take the financial hit from returnless refunds.
E.g. The "returnless refunds" policy would drive away shady Amazon Marketplace
sellers that scam buyers with faulty USB-C cables:
[https://news.ycombinator.com/item?id=10508494](https://news.ycombinator.com/item?id=10508494))

~~~
Judson
Anecdotal, but I've had the opposite experience on Airbnb. A situation arose
where I would have certainly received a partial refund from a hotel, and when
in arbitration, Airbnb sided w/ the seller (landlord?) and there was no
refund.

Basically my word vs the seller's, as things tend to be in online disputes.
Not a lot of money spent, so it's not a huge issue, but makes me lean towards
hotels unless Airbnb is much cheaper.

As a seller on many of the other platforms mentioned (and as a CC merchant),
you are correct. Good luck winning any dispute. Best course of action is to
simply try and get the product back and take the hit on shipping.

------
gryzzly
In Germany, there is a law that anything (I’m sure there are exceptions) sold
online can be returned in the 30 days after delivery. So Amazon or not,
companies must allow this anyway. Also some non-Amazon online stores offer
"returnless refunds" for some items or just ship a new one to you in case of
damaged item. Apart from forcing the vendors to pay for retouring the new
policy is similar to German regulations and businesses seem to be OK here.
Amazon could help (if it doesn’t already) vendors by providing some "rate" on
a customer, if they buy a lot and return a little, then likely they are
genuinely unhappy with product, and decide upon customer’s history if they are
entitled to refund or if they are abusing the system.

~~~
Maarius
Are you sure it is not 14 days? [https://www.verbraucherzentrale.de/So-
funktioniert-der-Inter...](https://www.verbraucherzentrale.de/So-funktioniert-
der-Internet-Einkauf-2)

~~~
gryzzly
Nope, stand corrected. I suppose some other non-Amazon vendors offer 30 days
as an extension! Or maybe some types of products?

------
rfdub
I am perennially amazed at the ire of sellers who build businesses on someone
else's platform, and then complain when the purveyor of said platform changes
the rules. If you want to get to determine the rules of the game, you have to
build your own playing field.

~~~
mattnewton
I don't think that's a fair viewpoint, it's not realistic for most businesses
to create international commerce powerhouses to sell their bespoke goods.
Complaining is the only realistic leverage they have in this game.

When you get as big as Amazon it's reasonable to expect some concessions to
the people who use your platform, just like if you get as big as GM your
workers will want to unionize.

~~~
qznc
So they should create an "Amazon Sellers Association" or something like that?

~~~
dgfgfdagasdfgfa
Well, they can go to jet.com instead. It's not like Amazon is without
competition.

~~~
macintux
You say that, yet I'd never heard of jet.com.

~~~
Sleeep
Jet.com is owned by Walmart.

------
TorKlingberg
It makes sense for Amazon to rein in third-party sellers. Amazon needs them to
fill out the catalog and cover the long tail of products, but poor customer
experiences damage Amazon's brand. I'm sure it upsets sellers, but this is
part of selling through Amazon. If I have to email back and forth with the
seller before I can return a defective item, why should I buy on Amazon
instead of eBay?

------
dclowd9901
I wonder if this is a push for sellers to move their goods to Amazon
warehouses...

That said, Amazon should also provide buyer metrics to sellers so sellers can
choose to sell items to customers unless that buyer has a "bad rating" (i.e.
they do a lot of returns).

This has a chance at being good for everyone if done correctly, but it seems
like only half the equation has been implemented.

------
holtalanm
Observation:

Don't care in the slightest about the third-party vendors' complaints. Amazon
can control THEIR SITE how they want to control it. They own the site. Don't
like their policies? Take your shop elsewhere.

I already stopped trusting third-party vendors on Amazon a LONG time again.

------
notananthem
Phew thank god. Next they need a robust anti fraud department in their
marketplace.

------
falcolas
Yes, this is very consumer friendly on the surface. But remember that Amazon
operates is retail arm with little or no profit margin, even with the benefits
of scale keeping their costs low. Small businesses don't have the same
benefits of scale, and will be forced to close down when their revenue drops
below their costs as a result of too many returns.

And that is ultimately bad for consumers.

~~~
sharemywin
Amazon doesn't need independent sellers anymore.

~~~
falcolas
I'd say that most of their listings are dominated by independent sellers; you
can't even tell if Amazon is offering an object without digging into the "see
more sellers".

For example, find a coffee grinder sold by Amazon (note, not Amazon Warehouse
Deals)

[https://www.amazon.com/s/ref=sr_hi_eb?rh=n%3A1055398%2Cn%3A2...](https://www.amazon.com/s/ref=sr_hi_eb?rh=n%3A1055398%2Cn%3A284507%2Cn%3A915194%2Cn%3A289750%2Cn%3A14092841)

~~~
mywittyname
Amazon keeps indy sellers around so they can use shopping data to identify
trends on high-margin, easy-to-produce good that can be readily copied and
offered by Amazon for much cheaper.

IMHO.

~~~
sharemywin
Plus if you sell on Amazon I bet you buy more too.

------
holydude
I am a big fan of internet platforms and everything but I just do not see a
value in online shopping for physical goods. Sure it might be a good thing for
shopping "disposable/every day use stuff" but why would I be buying something
like a cooking pan (as someone mentioned) online ? If you know the cooking pan
you want then yeah i agree amazong might be the most convenient thing but for
stuff like that I just want to see them first and maybe I might buy other
related stuff if I see it goes well together.

And I am telling you all this as a person that hates shopping in person.

~~~
stordoff
> why would I be buying something like a cooking pan (as someone mentioned)
> online

I don't know if similar applies to the US, but at least in the UK you get
stronger protections when buying online (because you can't inspect the item
before hand). If I buy stuff in person, then find it is not suitable for what
I need, I might be stuck with it depending on the store (assuming it is as
described and not faulty). If I buy it online, I can just send it back
(possibly paying postage costs, but most places offer free returns).

For instance I've got a external hard drive on its way back to Amazon because,
after testing, found that the performance isn't up to snuff. Had I purchased
it in person, I may not have been able to return after use (because the
packaging doesn't make any claims regarding performance, it'd be difficult to
claim it is faulty/not as described).

------
bigtunacan
My experience on Amazon is that I try not to buy from sellers that aren't
shipping directly through Amazon even if it's a lower price due to too many
issues.

I broke my rule recently yet again and purchased a "new" book on Amazon from a
third seller that was about 1/2 the price of any Amazon shipper for the same
item. When it arrived the book was not only not new, but was seriously
damaged. Pages were all stuck together where the book must have been wet at
some time, a bunch of the pages were torn. This thing was damaged so badly
that I about 1/3 of the pages aren't even readable. I contacted the seller and
they told me they would send a replacement "right away". That was a month ago
and still no replacement, but they have a "no refunds" policy.

=============Edit=========

Here's a picture of this "new" book. The packaging was not damaged at all so
this had to be an issue with the reseller rather than USPS.

[http://imgur.com/a/UjOSt](http://imgur.com/a/UjOSt)

~~~
Sleeep
Just contact Amazon directly they will give you your money back right away.
Same exact thing happened to me. When the seller balked I went right to
Amazon.

(Was this shipped from India by any chance? Mine was.)

~~~
bigtunacan
Yeah, that's what I'll end up doing as well.

This was shipped from Michigan.

------
axaxs
I do understand where sellers are coming from, but as a buyer, this would be a
better relationship between them and myself. As is, I typically always
prefer/only buy things sold or fulfilled by Amazon, because of this reason.
This move would give me more confidence to begin more often considering third
party vendors.

------
xchefhatx
Last year I made a little over $500k GROSS selling games on Amazon. This
policy change is going to be a nightmare because fraud and bootlegging are
rampant on their platform.

Small businesses and large ones too are being forced to become sharecroppers
for Amazon if they want to stay in business.

~~~
losteverything
The article mentioned sites sellers complain on. Do u read post to any? Which
ones

------
TallGuyShort
Are that many people returning items for any reason other than the item not
being as advertised in some way? If I don't get the item in the state that it
was advertised in, I'm already getting a refund one way or another: either
through the seller or by doing a charge back on my credit card if the seller
drags their feet for more than a few weeks or is giving me BS. And I just flat
out won't buy from a seller that won't shoulder the responsibility if the item
is damaged or defective.

I suppose some people might return an item because they changed their mind or
misjudged what they needed, but I online shop a lot and I've literally never
demanded a refund for something like that. Surely it can't be that bad...

------
jonplackett
From a consumer POV this is great. The only bad experiences I've had with
Amazon have been with crap itmems from 3rd party sellers and then realising
the postage to send it back is half the cost of the order and just letting it
go.

------
jlukanta
Thank God they are making this change. I had so much bad experience with
returning items to 3rd party sellers that I vowed to never buy anything that
is not directly sold by Amazon.

------
mi100hael
_> But increasingly, those upgrades come at the expense of sellers, who often
build their businesses on Amazon and have few other places to generate
revenue._

That's a huge risk that's been known from the beginning, though. I feel for
these sellers, but building a business that's 100% dependent on a 3rd party
(especially one like Amazon that you're also in competition with to some
extent) seems like a poor situation to place yourself in.

------
adventured
This is very, very good for Walmart and competition between Walmart and Amazon
online.

Walmart has been making an aggressive effort to recruit sellers. They'll use
this mistake by Amazon to their advantage. It'll also open up opportunities
for other platforms such as eBay and perhaps something that doesn't yet exist.
This is a mistake of perceived power by Amazon, I imagine they're going to
make a lot more of them in the coming years.

------
justinclift
Arrrgh. Auto-playing audio suddenly starts among a forest of tabs. WTF is with
that site. :(

And yeah, obviously didn't get to read the article due to that idiocy. :(

------
Leader2light
eBay needs to reduce seller costs and they will take over with buying it now
prices. Also no tax.

~~~
Karunamon
eBay is already tremendously hostile to sellers before the fees. Can't leave
feedback for buyers, a refund policy via PayPal that seems tailor made to
allow scam buyers to get free stuff, and so forth.

Basically it seems like the only thing a buyer can be sanctioned for is simple
non-payment.

~~~
notfromhere
Also ebay's huge fees make it almost not worth bothering to sell on there.

~~~
dgacmu
Amazon's are as high or higher.
[https://sellercentral.amazon.com/gp/seller/registration/part...](https://sellercentral.amazon.com/gp/seller/registration/participationAgreement.html/ref=asus_soa_p_fees?itemID=200336920&language=en_US&ld=NSGoogle)

The "referral fee" ranges from 8%, to 15% (common), and up. Up can go pretty
high, but mostly for Amazon's own stuff.

Ebay's are mostly just in the 10% range:
[http://pages.ebay.com/help/sell/fees.html](http://pages.ebay.com/help/sell/fees.html)

------
mnm1
Amazon has no qualms about fucking over their customers and closing accounts
for unspecified policy violations of non-existent policy. Now they're fucking
over their vendors too. Maybe they actually have written policy this time?
Anyway, everyone can now get fucked over by Amazon, vendor or customer. In the
end everyone stands to lose while only Amazon stands to gain.

------
javajosh
It is outrageous, but it's not new. About 2 years ago I sold an item through
the marketplace, shipped through Amazon, and at +30 days the buyer requested
to return (my return policy stated no returns after 30 days). I ignored him,
and then he filed a "Did not receive item" complaint with Amazon. They
refunded him $250 and billed me $250. I fought it, using email, multiple phone
calls (a trial in and of itself), showing them their own records of shipment,
etc, the fact that the buyer had initially tried to return the item (and had
sent messages to me saying he wanted to return it - implying that he had it).

 _I haven 't used Amazon to buy or sell anything since._ And you know what?
It's great! I use Discogs (and my local music store!) for music, Alibris
(alas, no good local book stores remain) for books, Newegg for electronics. I
haven't yet found a great source for ordinary household goods online, but the
local Home Depot/Costco/Target have me covered. When they get drone delivery
and a good online experience, I'll be stoked.

In truth, I don't think Amazon can really compete within these niches. They
get away with it because of an incredible focus on reducing transaction
friction, and because they are usually "good enough" in _so many_ categories.
My worry is that Amazon will expand their monopoly, and then really start
abusing it's customers, and they won't have anywhere to go.

I guess I'm just saying don't wait for them to try and screw you out of $250,
give up Amazon for a month, and see how it goes! I think you'll be surprised.

~~~
xiaoma
> _" About 2 years ago I sold an item through the marketplace, shipped through
> Amazon, and at 30 days the buyer requested to return. I ignored him, and
> then... (blah blah blah) I haven't used Amazon to buy or sell anything
> since"_

So it sounds like buying on Amazon is great way to avoid merchants who ignore
support requests. Thanks for the info.

~~~
javajosh
There was nothing illegal or immoral about ignoring a request I wasn't going
to accept. It was after 30 days and his window for returning had closed.

Certainly I wouldn't do business with someone like you who feels that _fraud_
is justified when some arbitrary condition you place on the other party isn't
satisfied to your liking.

~~~
Sleeep
Amazon's policy says you have to respond to buyer's inquiries within 24 hours.
You literary had to just reply "Sorry my return policy is 30 days and it's
been 40 days." One single sentence and you probably could have avoided the
return completely. You could do that in bed. What did you think would happen
if you ignored the buyer? Of course they are going to complain to Amazon.

>Certainly I wouldn't do business with someone like you who feels that fraud
is justified when some arbitrary condition you place on the other party isn't
satisfied to your liking.

Read the comment you are replying to, it does not say that and it does not
imply that.

~~~
javajosh
Yes, he did. His response to me getting defrauded out of $250 was essentially,
"Amazon did right. You deserved to be defrauded by them for not responding to
a support request. I am happy they alienated you enough to get you off of
their platform, because I wouldn't want to do business with bad people like
you anyway." I'm exaggerating for clarity, but that's how I read his comment.

This pisses me off because it obscures the simple fact that Amazon had all the
information it needed to see that he had actually received the item, but
considered it "not delivered" anyway. It was fraud on the buyers part, theft
and stupidity on Amazon's part for not seeing it, and it's emminently stupid
for some random on the internet to say that ignoring an invalid return request
deserved this response.

~~~
xiaoma
Again, this is not the case. Reread my comment. I didn't write anything at all
from the perspective of you, the merchant.

As a _customer_ , I love dealing with Amazon. This doesn't mean that I'd enjoy
being their partner, supplier, employee or anybody else they deal with.

