Today, I’m going to show you exactly what that means, what we expect to happen as a result, and how you should react to Amazon’s Q4 2020 holiday returns policy as an Amazon seller:
First, your Amazon customer can return a product up to 4 months after it was shipped.
Any item bought between October 1st and December 31st can be returned until January 31st.
For example, if a customer bought a marble set on October 1st, then they have the option to return that item up until January 31st—a four month return window! 😮
If that customer bought an additional marble set on December 1st, then they would have the option to return that item up until January 1st—a two month return window. 🤷♂️
On December 31st, 2020, the return window will go back to the normal 30 day period.
And if you sell FBM, the same return window applies to you.
In previous years, some sellers would switch to FBM to avoid an increase in returns. Amazon patched the loophole.
Here’s how sellers are reacting to this….
So, why would Amazon do this? Amazon doesn’t gain anything when customers return their items.
Second, this Amazon policy change will bolster customer confidence.
Let’s take a peek on the inside: the COVID-19 pandemic grew online sales and shut down lots of brick and mortar stores.
More people are purchasing online than ever in the history of the world.
CNBC.com: Amazon reported its third-quarter results... soaring past analysts’ expectations for profit and sales, which grew 37% year over year.
Amazon is getting so many orders that they are struggling to fulfill them. Especially in 2020, Amazon wants customers to buy gifts early. If all customers waited until December to order products, that would create a bottleneck.
Because Amazon has extended the return window, customers can feel comfortable shopping early for Christmas, Hanukkah, Kwanzaa, the winter solstice, New Years, and any other holidays with gift exchanges. 🎁
Amazon has built their reputation on customer service and a generous return policy. That's part of why Amazon.com is the largest online marketplace in the world.
Strange to think about: Amazon has made people more comfortable shopping online. The ability to return a product has changed everything. But it's also lead to unsavory behavior...
Third, some Amazon shoppers will exploit the 2020 holiday returns policy.
Bottom feeders. You know those special customers. The kind who buys a costume for Halloween, wears it, and returns it in January.
Accept that some of your customers will take advantage of this holiday returns policy.
Most customers aren’t like that.. Do not dwell on this. It is out of your control.
Returns will happen. Anytime. Focus only on what you can control.
If anything, we expect that this policy to do what it’s designed to do: spread out purchases.
Fourth, you can expect a boost in sales earlier in the holiday season.
When customers know they have a big fat return window, they are more free with their money. 💸
Customers will shop earlier—not later.
Despite this, most purchases will still be made about a week before Christmas.
Every year, most returns will occur around January 2nd. So, for most orders, Amazon’s new holiday returns policy doesn’t even matter.
Fifth, understand what you have to do when a customer returns your product:
If you sell FBA, Amazon handles returns and customer communication for you. But this does not mean you can be hands off...
When the buyer returns the item, Amazon reimburses the buyer.
The customer will select a reason under “Why are you returning this?” Here are the options they get to select from:
Here is the process Amazon uses to decide what to do next:
- Amazon decides if the product is still sellable.
- If the product is still sellable and not damaged, the product is returned to your inventory as fulfillable. Amazon credits you their fees.
- If the product is damaged and Amazon counts it as their fault, then Amazon credits your account for the sales price, sales tax, and their fees.
- If the product is damaged and Amazon deems it NOT their fault, the unit is placed in your inventory as unfulfillable. Amazon credits your account for their fees. You must either create a removal order or have Amazon dispose of the unit at a cost.
How should you handle returns? Get our free Amazon Returns Response Chart where we show you exactly what to do under every return scenario to build the best brand experience possible.
Sixth, here are 7 ways you should respond in order to boost your Amazon product sales:
1. Appreciate all of the extra sales that the holidays will bring.
Blaming others is not constructive. It will serve only to destroy you.
Appreciate that Amazon lets third parties, like you, sell on their platform at all. They don’t have to!
Instead, you have access to the largest growing economic sector in the world right now.
2. Optimize your product listing to drive home more sales.
Look at the honest feedback in your reviews. Then, improve your listing—and your product too if necessary!
Optimize before holiday purchases spike so that you net as few returns and as many glowing reviews as possible.
3. Appreciate the constructive feedback that your extra sales will bring.
With more sales come more reviews and more data. Use those reviews and data to improve your product and product listing. As we like to say here at Just One Dime: Optimize. Optimize. Optimize!
4. Market your product for the holidays with seasonal photos.
These photos can be as simple as your product with a bow on it or as elaborate as a lifestyle model photo under a Christmas tree. If your product would make a great gift, say so in your listing. Make the connection for your customers as easy as possible: your product = great gift.
5. Surpass your customers’ expectations.
Imagine this: A brother purchases your product—a dice set—for his sister. Then, she opens the box Christmas morning...but your dice set isn't any good. It's paint is already worn away. It doesn't have a good heft. The dice feel cheap.
The brother says, “Sorry, I didn’t open the box. It looked better on Amazon.”
Don't let that nightmare become a reality.
Instead, deliver a product that is so good, they wouldn’t have believed the quality if you told them in the listing. Include a value-adding "golden ticket" or a mini-gift.
Many customers will buy from brands they’ve never heard of before in order to get just the right gift for that loved one whom they know loves art, mountain biking, or chess.
Also, no product is perfect. In your listing, state what is not perfect about your product and frame it in a positive way. Your product may be difficult for amateurs to use. Phrase it on your listing like, “Takes time to master.” Be clear and up front about imperfections in order to avoid returns and poor reviews.
6. Plan your FBA inventory for the holiday sales level.
Private label products see a huge boost in November and December. Check out this data compiled from six of our own Amazon stores:
Amazon sales revenue broken down per month
Sales more than quintuple in December compared to the middle of the year. And that is for non-seasonal products!
Make sure that you plan for that boost in sales. We show you exactly how to calculate how much inventory to reorder and when to reorder here.
7. Turn Amazon returns into a positive brand experience.
Treat every customer like they are being 100% honest with you. It can be tempting to think, “No way do they dislike my product!” Or, “Oh sure you found out that your friend already has this.” Resist the urge.
Treat your customers like royalty. This will put your brand in a positive light should they ever come back to you. At the very least, when you treat buyers well, that experience can give them pause before they bad-mouth your brand.
If you sell FBM, I highly recommend finding a 3PL (third-party logistics company) to make your shipping and return process even smoother. A 3PL is when a logistics company receives and stores a product from a seller and then fulfills orders. Yes, that is similar to Amazon FBA, however, in this case you are outsourcing that job.
Never forget: the brand experience is always up to you.
Enjoy your Q4 sales and holiday fun! 🎅
How should you handle returns? Get the free Amazon Returns & How to Respond chart below. 👇