FBA Returns Processing Fee (Effective June 1, 2024)

Understanding the New Returns Processing Fee on Amazon: What Sellers Need to Know

As of June 1, 2024, Amazon is set to implement a new returns processing fee for products across various categories, with the exception of apparel and shoes. This move is aimed at addressing the operational costs associated with high return rates and to encourage reductions in waste. Here’s what sellers need to understand about these changes and how they might impact your business on Amazon.

Who is Affected?

The returns processing fee will apply only to products that exhibit return rates above the category-specific thresholds. These thresholds are determined by Amazon and vary across different product categories. Sellers can view these thresholds and their product’s specific return rates via the FBA Returns section on their Amazon Seller Central account.

View Your Returns - SellerCentral.com/fba-returns

Fee Calculation

The fee is calculated based on the number of units returned that exceed the threshold within the three-month period following shipment. For example, if 1,000 units of a product are shipped and 120 units are returned within the next three months, with a category threshold of 10% (or 100 units), the fee would be applied to the 20 units that exceed this threshold. The fee amount depends on the product’s size and shipping weight.

Important Dates

For returns exceeding the threshold, the charge will be applied between the 7th and 15th day of the third month following the initial shipment. This means if excess returns are recorded by August, the fee will be assessed between September 7th and 15th.

Exemptions and Waivers

Products that ship fewer than 25 units in a month will be exempt from this fee. Additionally, sellers enrolled in the FBA New Selection program will see the fee waived for up to 20 units of each eligible parent ASIN, provided these returns are received at a fulfillment center within 180 days of the first inventory-received date.

Apparel and Shoes

It’s important to note that for apparel and shoes, no thresholds are applied. A returns processing fee will be charged for each customer-returned unit, regardless of the return rate.

Why This Matters

This policy shift reflects Amazon’s focus on reducing the operational strain of handling returns and minimizing waste. It incentivizes sellers to improve product quality and enhance customer satisfaction, potentially leading to fewer returns. However, it also places additional responsibility on sellers to closely monitor their return rates and make necessary adjustments to their product offerings.

Next Steps for Sellers

• Review the Category Thresholds: Familiarize yourself with the return rate thresholds specific to your products.
• Monitor Return Rates: Keep an eye on your product’s return rates through Amazon’s FBA Returns dashboard.
• Quality Control: Consider investing in better quality control measures to reduce the likelihood of returns.
• Customer Feedback: Use customer feedback to address common issues that might lead to returns.

This change is a significant adjustment for Amazon sellers, but with careful planning and enhanced focus on product quality, it can be managed effectively to minimize any negative impact on your business.

For more detailed information on these changes, sellers should refer to the official Amazon update on 2024 returns processing fee changes.