Amazon's new refunds policy will 'crush' small businesses, outraged sellers say

In your view, how much should you have paid for shipping for an item that you didn't want? Nothing?

Should the seller be responsible for shipping the item both ways?

There is already very little margin in selling commodity goods, especially when you consider Amazon takes 15% of gross value as a fee. Shipping in many cases changes the order from profitable to money-losing. If you try and price it in, you can't compete on cost which begs the question of why bother selling on Amazon in the first place.

The crux of the issue is this, though: Amazon doesn't give a shit about 3rd party sellers, nor can the 3rd party sellers provide the same level of customer service as Amazon can, mostly due to economies of scale. The whole 3rd party seller program is a testbed for Amazon, a research program to see how they operate and how Amazon can do it better and as soon as they realize how - the 3rd party sellers either get priced out by a race to the bottom with Amazon itself (they go directly to suppliers and cut everyone out) or by policies like these, which are ripe for abuse or eat further into seller margins to the point of operating at break-even or slightly in the red.

As a last note: Whenever I buy on Amazon, I buy Prime. The incentives of customers and 3rd party sellers are incompatible. If I were a customer for the goods that we are selling, I would never buy from our company.

REI is unusually customer-friendly, because it's a consuner cooperative. Most US stores do not offer anything like a year no-questions-asked return policy (30 days, many-questions-asked is more typical.)

Bigger marketplace/choices

Convenience - I don't have to wait until the store opens. I don't have to drive around to 10 different stores for 10 different products

Not everyone has has easy access to the stores they need to go to

Price

Time - I can order a pan while waiting for a client to arrive or commuting on the train.

Search and comparison tools

(There's disadvantages too, of course.)

Mostly it let's Amazon hire fewer people in support department - they don't have to deal with the occasional refused return ("I dropped this glass item on tiles and it broke into a million pieces, I'd like my money back. Do I have to ship it back to you?" - paraphrased actual return request)

The only other plus side I see is that customers can ship the return immediately. Not much of a difference as sellers are now required to respond within 12h (7 days a week, including holidays) and if they fail to more than 5-10% of the time (I don't remember what the exact target is now) they risk having their Amazon account closed.

From consumer point of view it's not a good thing:

- it offers no new customer protection. sellers are already required to accept those returns (unless customer shoots themselves in the foot - see example above) and provide a prepaid shipping label (in most cases). Amazon enforces that

- it removes the option seller has to accept a return that is out of policy

- it increases the number of unnecessary returns (and having to reorder). Often a one sentence explanation/hint is enough

- it doesn't make the cost of shipping to customer refundable, unless the customer lies about the reason why he's returning the item. Right now those false claims account for at least 3/4 of all returns (source: my wife runs a business that does part of the sales through Amazon, other sellers we know having the same problem)

- it generates extra costs for sellers. that cost is ultimately paid by buyers

From seller point of view it's not a good thing:

- makes fraud easier. For a larger seller that's simply a cost of doing business that will be shifted to buyers anyway. For a small seller it can be end of business if for example a Chinese company that copied their product decides to make a couple dozen fraudulent returns (not that uncommon)

- removes an option to use your own cheaper shipping label - even sending just a few hundred package a month gets you really nice discounts

- removes an option to use your own shipping label that makes the return safer (like extra insurance or using a courier). ANYTHING customer ships back makes Amazon consider it a valid return - even if it's damaged, something completely different, etc the seller will have to provide a refund. It's next to impossible to stop that refund

- removes an option to receive feedback from the customer making the return to improve in the future