Amazon Labels Some Products with "High Return Rate" to Reduce Operating Costs

In recent years, Amazon has become known for its free and convenient return policy. However, with the increase in returns during the pandemic, the cost of returns has become a significant issue for the e-commerce giant. In response, Amazon has begun labeling some products with a "high return rate" warning message to inform consumers and reduce the number of returns.

Increase in Returns: A Common Problem in the E-commerce Industry

The U.S. e-commerce market experienced a boom during the pandemic as more consumers turned to online shopping. However, this also led to a significant increase in the number of returns, which resulted in higher operating costs for e-commerce platforms. Amazon, known for its lenient return policy, has also been affected by this trend.

Amazon's Free Return Policy and the Cost of Returns

Amazon's free return policy has been a standard service in the U.S. e-commerce industry, but the cost of free returns is increasing. During the pandemic, the number of returns on e-commerce platforms increased sharply, leading Amazon's competitors to tighten their free return policies. Some third-party sellers on Amazon also noted that the return cost on the platform is relatively low compared to other e-commerce platforms.

To address the rising cost of returns, Amazon began charging third-party sellers a handling fee for returned goods that could not be resold. In addition, Amazon raised the order delivery fee for third-party sellers earlier this year. These moves indicate that Amazon is taking steps to control costs.

"High Return Rate" Label: A New Approach to Reducing Returns

To further reduce the number of returns, Amazon has started displaying the "high return rate" warning message on some product pages. These products include some VCRs and clothing sold by third-party sellers, with Amazon responsible for order fulfillment. The products also received a four-star rating in terms of consumer reviews.

According to Amazon spokeswoman Betsy Harden, the move is to help consumers make more informed purchase decisions. The return rate label is part of Amazon's recent move to provide consumers with more product data, such as sales data for popular items.

Impact on Third-Party Sellers

The return rate label may have an impact on third-party sellers. They need to think about why the return rate for certain products is high and take measures to reduce it. Amazon's move may encourage third-party sellers to improve their product quality and reduce the number of returns.