By Jordan Malik, MBA/MS & Award-Winning Amazon Pro Merchant & eBay Top Seller

Tuesday

About Customer Returns, What to Do

NOTE: This blog has moved to: http://www.HonestOnlineSelling.com

If you look close at this screen shot of my 2011 Holiday sales on Amazon.com, you'll see a 6% return rate in December.

Remember those returns do not include returns Amazon will receive in January (for my buyers' Nov-Dec purchases). I'm expecting my return rate overall to be about 8%.

I don't know if that's high or not compared to other sellers. Anyway I can explain why mine isn't a 'perfect zero':

> The buyer had remorse or the recipient returned it for something else;

> At least 50% of the inventory I sell is 'not new' (i.e. Amazon makes sellers choose conditions like 'Collectible - Very Good' for Toys; or 'Used-Very Good' for books/CDs/DVDs.)

The problem with selling 'not new' items is that buyers' expectations can be different from my selection of condition.

So for Amazon sellers - When you're listing your 'not new' inventory, the safest way is to select the item condition that is one level 'lower': So if I have an item I think is 'Like New' I'll usually select 'Collectible-Very Good' instead.

For eBay sellers - certainly don't try to pass off a used item as 'New', and include lots of pictures so the buyer knows exactly what to expect.


My Tips for Dealing with Returns

I've seen many sellers completely freak out over returns and they end up haggling with the customer.

My advice:

> For any item under $50, don't haggle or ask the customer to ship it back -  just give them their money back. It's just not worth it (more on that below). The customer will be delighted and will likely leave you positive feedback (and/or remove his/her negative feedback left for you).

> For items priced $50 to $100, offer a partial refund (50-75%) if they're unhappy. Of course if the item is broken or defective, you should refund them promptly (don't wait for them to return it to you, but definitely ask them to return it)

> For items priced over $100, you should offer a partial refund (50-75%) if they're unhappy. Use your discrection but I would wait for the item to be returned first if they want a full refund.


My Reasoning for "Don't Haggle, Just Refund Them"

The reasons why I refund a customer right away if they are unhappy with a $50-or-under item:

> In most cases, the buyer is honest and truly dissatisfied, I don't think they're out for a freebie (and I really want to please the customer - shouldn't we all?); AND

>I think sellers' time is too valuable to have to negotiate (for instance): who's paying the return shipping; what to do with the item when it's returned; take time to inspect/repair/relist the item; decide how much to refund the customer; etc. If you add up all the time invested in dealing with a return, we (sellers) could be using that time to scouting for new products to sell.

There are some exceptions, of course, but in general, it's better to refund the customer and tell them to keep the item. Anything else is just not worth the time investment.

Do you agree/disagree? I want to hear from you! Click 'Comments' below.

5 comments:

Neal Williams said...

I think the Amazon return policy is flawed. The "no questions asked" return policy that has been used by many retailers has eventually been scrapped or restricted by every retailer that has used it.
As more buyers become aware of the policy, it's abuse will become more prevalent. Fortunately, many of my items get returned without even being opened so I can relist - the only drawback is I have to pay freight again.
I think a change to the AZ refund policy is way overdue - perhaps a 30 day restriction would be a good start.

jdhpa said...

Hi Jordan,

I don't mind giving my customers a 100% refund if they're unhappy, or paying for their return postage. I think most customers would consider that to be treating them well. Rather than try to sell the returned item again I either give it away or discard it. I wouldn't give someone a refund and let them keep the product, though, I don't want to reward dishonest behavior, and some dishonest people would take advantage of that.

Do you have any statistics on how many of your returns are 'repeat return customers?'

Thanks for the good article!

SavySeller said...

Our primary sales are on eBay. We have become believers in "Don't Haggle, Just Refund Them".

With the eBay 'One-Way' feedback system, a seller has more to loose than dollars by making a return an issue; rather than, just refunding and Hope the buyer doesn't give you any feedback - instead of a negative or low DSR rating.

Add the potential for a low DSR rating, the grief and upset of trying to negotiate with an already unhappy 'being right' buyer and the wasted time involved -equals a Recipe for Disaster!

Sellers should be spending our time selling, not counting our losses. This is also a good reason why eBay sellers should be looking at other selling platforms, such as Amazon.

European_Classic_Gifts! & Cleveland_House

SavySeller said...

At this time, our primary sales are on eBay. We have become believers in "Don't Haggle, Just Refund Them".

With the eBay 'One-Way' feedback system, a seller has more to loose than dollars by making a return an issue; rather than, just refunding and Hope the buyer doesn't give you any feedback - instead of a negative or low DSR rating.

Add the potential for a low DSR rating, the grief and upset of trying to negotiate with an already unhappy 'being right' buyer and the wasted time involved -equals a Recipe for Disaster!

Sellers should be spending our time selling, not counting our losses. This is also a good reason why eBay sellers should be looking at other selling platforms, such as Amazon.

European_Classic_Gifts! & Cleveland_House

Clayton said...

On Amazon, I have started placing a comment about a return is not necessary if they are not happy with what they bought. Just contact me and I'll issue a full refund. I'm testing this out on lower priced items.