Returns are part of any retail business. Amazon is no exception. With the 2015-2016 holiday shopping season upon us, Amazon sellers can expect to see a higher than usual number of returns. This is because many items purchased during the season will be for gifts, and not everyone will want the gift they received. You'll be doing a higher than average number of sales for the holidays, though, so the extra returns shouldn't hurt your business, as long as you're giving your customers quality products.

Here are some things you need to know about the season for holiday gift returns and how it may affect your Amazon business this year. Knowing these things will help your business thrive, and keep your customers coming back even if they returned an item, all while keeping your store safe by making sure it is in compliance with Amazon's policies and promises to its own customers.

Amazon Return and Holiday Return Policies

The first thing you need to know is Amazon's holiday return policy. In fact, knowing the return policy is an important thing for both buyers and sellers, as it affects them both. Amazon normally has a 30-day, no questions asked return policy, and any seller who participates in the Fulfillment by Amazon program is subject to it. This policy changes during the holiday season to a 90-day return policy, basically giving customers and gift recipients until January 31 to ask for a refund or store credit on a defective or unwanted item.

If you are part of the Fulfillment by Amazon program, the holiday return policy applies to you. If you are not part of this program, you are allowed to set your own return policies. Buyers are encouraged to read the return policies of any seller who doesn't use Amazon to fulfill their orders. Amazon also encourages all sellers to have customer-friendly return policies. If you are not part of Fulfillment by Amazon, the longer holiday return period does not apply to you, unless you choose to adopt it.

Most returns must be unopened, or at least unused and/or undamaged in order to be accepted. This is especially true in the case of food or supplement items. Amazon does not accept returns of these items if they have been used, and does not expect its sellers to, either.

Is There Any Way to Try to Avoid Returns?

No business likes to get returns. While you're bound to get returns every now and then, even if it's just from people who didn't understand what they were ordering until they received it, you can take some steps to ensure the number of returns you receive is minimal.

  • Make sure your product descriptions are detailed and accurate
  • Take photos of the product that show it from several different angles, and that show the product as it is
  • Use the best keywords so customers find you easily
  • Be prompt to respond to customer service questions
  • Ship the product right away
  • Package your product so it is not likely to get damaged in shipping
  • Put tracking on your product when you ship it so you can be sure it gets there
  • Use competitive pricing, so your customers won't find a better price on the same product from another seller. A good repricing program is the best way to always stay on top of your competitors, and actually increase sales while reducing returns. It's an invaluable investment, especially if you sell a lot on Amazon.

Are Certain Product Categories More Susceptible to Returns During the Holiday Season?

Toys and clothing are the most likely products to be returned during the holiday season, but this is true for any retailer. Kids get toys they don't like, or they get the "wrong" toy—something they didn't want, such as if they wanted one video game and someone mistakenly got them a different one. Clothes are often returned because people don't like the style and don't intend to wear it, or the size is wrong. If you are selling in either of these categories during the holiday season, be prepared for more returns than items you may sell in other categories. You can make up for the increase in returns in those categories by offering more items in other categories. If you only sell in one category and it is a high return one, make sure you keep a large amount of product in stock, ready to be repriced as soon as a competitor rises or lowers their price on the same item so your customers can make even exchanges from you instead of returns. Staying well-stocked and competitive in your pricing establishes customer loyalty, which is always a good thing.

How to Make the Return Experience a Positive One

When you do get returns this holiday season, and you will, make it as pleasant for your customers as possible. This will get you positive reviews, return customers, and the confidence of new customers who are considering buying from you. Always make refunds with a good attitude and no questions asked, as long as the product is returned to you in good condition. You may even take it a step farther and not require the customer to return the item to you to get the refund. Some sellers do this, and it establishes customer loyalty. Offer customers that make returns coupons on other items you sell, give them an automatically lowered price on a similar item, or give them store credit, or an even exchange. Whatever you can do to make the return process pleasant for your customer, and even give them something extra when they do it, will get you the good reviews that will get your store more exposure, and theoretically, success on Amazon. Remember, for every return, there is a potential new sale, and a new satisfied and loyal customer.

What Should Sellers Know About Amazon's Return Dissatisfaction Rate Metric?

As of November 2, 2015, Amazon introduced a new metric for customers. This one measures the dissatisfaction rate of a seller's customers with their returns with that seller. Here is the policy in a nutshell. You will receive negative points on your return metrics if you:

  • Do not respond to a customer within 48 hours of receiving their return request
  • Have a customer who leaves negative feedback about their return with you
  • If your product is eligible for return and a refund, but you do not issue one and refuse the return request

While these metrics will not negatively impact your account standing with Amazon yet (Amazon admits this may change in the future), it will give you an idea of how well you are serving your customers when it comes to returns. If you are not serving your customers well in this area, they may not be back as customers, and their negative feedback may warn others away from your store.

Essentially, you should remember that returns are a part of any retail business. It does not mean you will be put out of business unless your product is a bad one, or your customer service regarding returns is bad. If you serve your customers well with returns, they will serve you well with repeat business and good feedback.