Seller-Fulfilled Orders Now Monitored for Returns Performance
On September 2nd, Amazon announced a new feature for seller-fulfilled returns: the Returns Performance Dashboard. The dashboard will track three key metrics for product returns:
- Return requests approved in less than 24 hours
- Total declined return requests
- Return-related buyer contact rate
Amazon’s announcement also states that each performance metric will contain details for the following areas:
- Current metric performance
- Target metric threshold
- Definition of the metric
- Explanation of the metric calculation
- Explanation of the importance of the metric
- Policy information
The dashboard will launch on October 21, 2021.
Amazon Launches Returns Analysis Page
On the same day, Amazon is also launching the Returns Analysis page, which will display any product listings that experience return issues. According to Amazon, “This page will help you identify the top return issue for each of your product listings so you can take action to improve the return experience.”
The Returns Analysis page will display three filters:
- Product category
- Time period
- Product order type
Returns Performance Dashboard Tries to Level-Set FBM with FBA
This dashboard is only for seller-fulfilled returns, not FBA returns. This distinction is notable because it implies at least some of Amazon’s motivation: As FBM becomes more common in the wake of ongoing FBA restrictions, Amazon appears to be trying to protect customers’ delivery experience by requiring FBM to level-set with FBA quality.
Shoppers should enjoy a high-quality experience regardless of whether an order was fulfilled through FBM or FBA. Amazon already has controls in place to measure and maintain quality at FBA. Now, they seek to do the same for FBM.
What Happens if Metrics Fall Below Thresholds?
According to Amazon’s FAQs, sellers will not be penalized if their metrics fall below a certain performance threshold.
This seems likely to change, given Amazon’s long history of requiring sellers to meet certain performance standards that impact the customer experience. Amazon may allow sellers time to familiarize themselves with the dashboard and revise it based on feedback before they announce requirements and enforcement actions.
Fulfillment Rates & Return Rates Already Affect Buy Box Control
While Amazon has not announced any new enforcement actions, it’s worth noting that fulfillment method and return rates have been business-critical metrics for many years on Amazon.
Normal VS Suppressed Buy Box
When multiple sellers are in the same product listing, only one is featured in the buy box at any given time. How does Amazon decide which seller wins the buy box? In order of importance, Amazon’s algorithm uses the following factors in its determination:
- Is Amazon Retail (1P) a seller? (If yes, Amazon will always win the buy box)
- Price after shipping
- Fulfillment method (FBA, FBM, etc. – FBA always wins)
- Delivery speed
- Percent of successful orders
- Defect rate
- On-time delivery rate
- Late shipment rate
- Percent of orders with valid tracking numbers
- Number of seller reviews
- Seller feedback rating
- Seller response time
- Frequency of stock-outs
- Cancellation rate
- Refund request rate
If all things are equal, each seller would get an equal share of time in the buy box. However, this combination of factors ensures that there will always be a difference.
Potential Problems with the Returns Performance Dashboard
As with most Amazon announcements that impact sellers, this news was met with mixed results in the Seller Central forums. Some of the most-cited concerns included over regulation and risk to sellers’ business if they are penalized for high return rates.
Risk of Abuse & Unfair Penalization
Some sellers claim that customers exploit Amazon’s returns policy, which automatically approves the vast majority of return requests. Customers who request a return can be issued an automatic refund or replacement, even before (or without ever) returning the product.
The concern is that the automatic approval system would result in unfair penalties to sellers if Amazon does ever choose to set performance requirements and enforcement actions.
The following product categories are exempt from automatic approvals and may be authorized manually:
- Amazon Custom
- Sexual wellness
- Certified Preowned Watches
- Business, Industrial & Scientific Supplies > Professional Medical Supplies
- Business, Industrial & Scientific Supplies > Professional Dental Supplies
- Non-physical items (for example, warranties, digital software, or digital coupons)
- Items that are non-returnable by law and dangerous goods
- Heavy and bulky items
Products with a price greater than $100 AND require special shipping are eligible to be exempted from automatic approvals. Sellers must submit these requests to Amazon.
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