Amazon has started posting a warning about frequently returned items as the company tightens its belt in response to shaky finances and an uncertain economy. Industry-wide e-commerce returns have skyrocketed during pandemic shutdowns. Although they have declined, they are still well above pre-pandemic numbers.
The new merchant badge bed, “Frequently returned item: see product details and customer reviews for more information about this item.” However, it doesn’t appear visible to everyone (my Amazon account doesn’t show it when viewing the turntable And Dresses This information reported on). This may suggest that Amazon is rolling out a phased rollout or limited testing. Additionally, the labeled products all appear to be from third-party vendors provided by Amazon.
Product returns and exchanges are a convenience businesses use to help customers shop with confidence, but they can also be costly. Return costs include shipping, handling of returned inventory, and other miscellaneous expenses. The company is likely hoping the tag will prompt sellers to change their listings or products, because a large alert could seriously hurt an item’s sales. Sure, retailers are factoring yields into their pricing, but with higher-than-usual rates, businesses are cutting back on spending (Amazon has announced layoffs for 27,000 employees this year), it is logical that it will get tough.
Some sellers said their customers return items at a higher price on Amazon than when purchased at other outlets, a discrepancy they attribute to Amazon’s easy checkout process and shipping fast from Prime. The retailer has already passed on some of the extra expense to sellers, as it increased fees for “Fulfillment by Amazon” sellers earlier this year.
“We currently display return rate information on select product detail pages to help our customers make more informed purchasing decisions,” Amazon spokeswoman Betsy Harden confirmed. information this week. This isn’t the first time Amazon has publicly highlighted sales data: the company recently began displaying a badge showing how many sales a product has made (e.g., “100,000+ purchased last month “).
In December, the National Retail Foundation (NRF) reported that online return rates rose to 18% in 2020 – when customers totaled $428 billion in returned goods – from just 8.1% in 2019. They fell only slightly to 16.5% last year. Unfortunately, bogus returns are another concern: the NRF reports that retailers lose $10.40 in return fraud for every $100 of merchandise returned.
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