Offering a generous return policy is good for Amazon sales, but it comes with significant costs – and as people grow ever more concerned about the environment, it can have an impact on its image as well.
Amazon addressed the issue in a recent blog post on its German marketplace – including describing how it handles returns of items sold by third-party merchants who account for over half of the products sold on Amazon worldwide.
Amazon thoroughly inspects returned goods in deciding what to do with them – many of the items are put back on its virtual shelves, it said. But the priority is to reduce the number of items returned by customers in the first place. It does this in part by allowing buyers to leave product reviews shoppers can read – and it provides extensive product information, including customer or manufacturer videos and photos.
Amazon said the number of fashion items returned in Germany due to a wrong fit has decreased by over 25% since 2020 thanks in part to size recommendation – “for example based on previous purchases, returns or items that a customer has looked at but not bought.” (Translation from German thanks to Google Translate.)
If Amazon determines the returned item is no longer in mint condition, it undergoes further thorough screening to mark it for the next best use: resale as used through the Amazon Warehouse program, sale to buyers of residual items, donation to non-profit organizations or return to the supplier.
Amazon Germany said the proportion of the products sold that must be disposed of is “in the per thousand range.”
“Only when all other avenues fail does the recycling of items come into play. The aim here is to keep the materials in circulation. For example, products are recycled because they are no longer usable – like an opened toothbrush, a broken lightbulb or an outdated calendar. Only as a last resort do we send products for energy recovery. For us – as for other traders – this is the least attractive option, both ecologically and economically.”
In a Frequently Asked Questions section, Amazon explained what happens to returned goods from Amazon’s third-party sellers. “Since the returned products do not belong to us, it is up to the selling partners to decide what to do with the goods,” it said.
“We have three programs in place to make it easier for our partners to resell returned items or overstock:
“With a first program, third-party providers can resell returns and excess stock to buyers of residual items at a profit. The program is now available in Germany, France, Great Britain, Italy, Spain and the USA. Austrian third-party providers can also participate in the program.
“Third-party providers can also use a second program to resell returns directly to Amazon customers. The program is available in Germany, France, Great Britain, Italy, Spain and the USA. This program is also open to Austrian companies. Amazon then automatically grades a returned item and assigns it one of four standard conditions: Used – Like New, Used – Very Good, Used – Good, and Used – Fair. Third-party sellers set the item price themselves based on condition – just like their new products.
“We also have an outlet shop through which third parties sell surplus goods to customers and usually still receive between 30 and 60 percent of the original price.
“Alternatively, of course, we also send returned or unsold goods back to the third party.”
Amazon also made a point of saying in the FAQs that it was not true that its fee structure made it cheaper for selling partners to dispose of goods.
You can find the full post on AboutAmazon.de (German language).