Analyze Your FBA Returns for Amazon Success

As a business owner, you already know that returns are a pain, especially on Amazon.

First of all, they cost you. Not only do you have to refund the original purchase price after you thought you had some revenue, but the returned inventory might be damaged and unsellable, or even totally the wrong product, causing a complete loss.

This would be the case in any retail business. But if you sell through Amazon FBA, you’ll encounter unique challenges.

First, if you choose the setting to have your returns go back to FBA to grade and resell, you run a risk: the FBA staff might make a mistake and end up sending another customer a damaged or used product. This could lead to a negative review and/or seller feedback that tanks your business’s reputation. (Have you heard about the small business that got wrecked because someone received a dirty used diaper?!)

But if you have all returns sent back to you instead of trusting FBA, you have a major time loss on your hands: you and your staff now have to take the time to assess each item yourselves and either resell as new, resell as used, or dispose of it in some other way. Time is money in your business.

Plus, if you’re outside the US, you have to either set up a US-based return address for your US customers, provide a pre-paid international shipping label, or simply refund the item without requiring a return, all of which are expensive and potentially a hassle. (Failing to do one of the three makes the buyer eligible for an A-to-Z claim, which harms your order defect rate.)

Last but not least: if an item gets returned a lot compared to other items in its category, Amazon might add the frequently returned item warning to the listing, which could easily scare off buyers from purchasing the product, reducing your sales.

Amazon’s customer-centric mindset has led it to require third-party sellers to be very generous with their return policies all the time…and extra generous during the holiday peak season. While returns are usually allowed within 30 days, orders placed between November 1 and December 31 are usually eligible for return until the end of January.

With this returns extension taking effect very soon, it’s a good time to analyze your returns and find new ways to reduce or manage them.

How to Analyze Your FBA Returns

First, you’ll need to understand why returns are happening. The best way to do that is to go straight to the buyers themselves. Buyers have to choose a reason when they request to return something, and they have a space to leave a comment with more details as well. Notice any patterns in the return reasons, and read the comments to try to understand where buyers are coming from.

It may seem daunting to read through all returns for every item, especially if your catalog is large. So, prioritize. Your process might look something like this:

Identify the SKU that has the highest return rate, while also having enough sales to be worth your focus. For example, look at your ten top-selling parent ASINs, then choose the SKU among those that have the most returns in the last 90 days.
Next, look at the top two or three return reasons customers choose for this item.
Read through a substantial sample of the return comments for each of those reasons.
Repeat with another high-selling and frequently returned SKU.

SellerPulse by eComEngine is a software tool that provides these details fast. It includes a robust FBA returns report with easy-to-read graphs showing which items are most often returned in which condition or for which reason, plus a word cloud of common themes in the comments. All the individual remarks are imported too, so you can notice a theme and dig in to get more details about the buyers’ experiences.

The report also shows returns over time (so you can see whether there was an unusual spike in returns for a certain period that might not happen again), item disposition (the condition it was returned in), and more

Action Steps

Of course, one benefit of doing this research is that it allows you to collect evidence of any fraudulent returns to make your case to Amazon.

But there are plenty of non-fraudulent returns and plenty of ways to reduce those going forward. Over time, you can improve your product, listing, packaging, or service to prevent the issues you’re seeing in the reasons and comments.

For example, if many buyers are saying that a certain item arrived damaged, you may need to improve the packaging it comes in for extra durability, rather than relying on FBA to pack it with the proper amount of cushion.

Or, if many buyers are complaining that the size, color, or other features of the item are not what they expected, you may need to update the listing to be more accurate to the real product.

As always, the first step to solving a problem is knowing that it’s there in the first place. Start analyzing your FBA returns today to be prepared for Q4 and another successful year.

Rachel Hoover

Rachel is a freelance writer who helps Amazon sellers connect with their customers and manage their seller reputations.