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

I've had this happen multiple times. I have, on a few occasions, received defective products, or requested to return something I didn't want, and Amazon simply refunded me or shipped me a replacement without asking any follow-up questions.

I suspect Amazon's decision process, when you request a refund or return, may have something to do with your purchase history, and also the return and defect rate of the product in question.

I already had a small business do this for me on Amazon voluntarily. They refunded my small purchase price and asked me to donate the item. I felt so guilty I wouldn't have even asked for a refund if I had known. You bet I did give the item away.

I wonder if this is a push for sellers to move their goods to Amazon warehouses...

That said, Amazon should also provide buyer metrics to sellers so sellers can choose to sell items to customers unless that buyer has a "bad rating" (i.e. they do a lot of returns).

This has a chance at being good for everyone if done correctly, but it seems like only half the equation has been implemented.

Many sellers will, yes, if it's cheaper then accepting the return, especially if a return is not sellable or the item requires special handling (hazardous materials, weight) Amazon pretty much forces sellers to accept returns for most reasons, from what I understand.

Some examples from my life:

I've bought a book from eBay that was advertised as the wrong edition. When I complained (I wanted a specific edition and I made sure the listing was for the edition I wanted) the seller told me to just donate the book and gave me my money back. It was a cheap used book, it would probably have cost more to ship it back than the seller would have gotten reselling it.

I ordered cat litter from jet.com. Cat litter was crushed and broke open during shipping and spilled everywhere. I took a picture and asked for my money back. They didn't ask me to ship the litter back even though about 60-70% of the litter was usable (and I used it). It would have been a mess to ship back litter like that plus expenses.

Edit: just thought of a third example. My parents ordered an armoire from Wayfair that must have been dropped badly in shipping, the side was extremely bowed out. The thing was like 5 feet tall and really heavy, it was solid oak. They just shipped them a new one because a return of such a big item would have been totally infeasible without sending a truck or special courier service. Some rando on Craigslist was really happy to come pick it up so he could fix it.

It's interesting how each market platform is trying to tweak the equilibrium of honest/dishonest buyers vs honest/dishonest sellers.

Beyond Amazon specifically, the big picture trend is that any marketplace of 3rd-party sellers which includes eBay, PayPal, Uber, Airbnb, etc will always tilt the advantage towards the buyers.

E.g. Buyer scams sellers by claiming he got a bad product and Paypal will instantly issue a chargeback without any investigation.

If sellers try to change the balance of power by shifting to a platform that's more favorable to sellers (e.g. p2p OpenBazaar, craigslist, etc), they'd have to calculate the revenue loss from a smaller marketplace (less buyers' eyeballs). It's going to depend on the type of items if the loss is worthwhile.

E.g. If you're a seller that happens to have the unreleased iPhone 8 prototype to sell, you can use OpenBazaar to sell it because there would be plenty of buyers that don't need refund assurances from Amazon. If the item gives the seller leverage, the seller could also demand more buyer-unfriendly terms such as mandatory payment in Bitcoin instead of Paypal.

When it's not a multi-sided platform, that's when rules can tighten up to favor the seller instead of the buyer. E.g. Costco stops generous 90-day returns on big-ticket electronics and computers because buyers were "renting" video cameras for free.

(Cynical conspiracy hat on: it's possible Amazon expected the sellers' backlash and they don't care because this new policy was their way to cull the "weak" sellers that couldn't take the financial hit from returnless refunds. E.g. The "returnless refunds" policy would drive away shady Amazon Marketplace sellers that scam buyers with faulty USB-C cables: https://news.ycombinator.com/item?id=10508494)