Amazon FBA High Returns Fees Coming In June 2024
Amazon will begin charging a returns processing fee for Fulfilled By Amazon (FBA) products with a high return rate, effective June 1, 2024.
The new fee will only apply to products that have return rates above a specific threshold determined by category and is applied per unit based on the product’s size tier and shipping weight.
A product’s return rate is the percentage of the product’s shipped units in a given month that are physically returned during that month and the subsequent two calendar months. For a given month’s shipped units, the returns processing fee will be charged for each returned unit above the product category’s return rate threshold. For a particular month’s returns, the return processing fee charge will be made between the 7th to 15th day of the third subsequent month.
Sellers can review their product’s return rate on the FBA Returns page, updated three times a week, to monitor returns and return rates for a given month’s shipped units.
Products are exempt from the fee if they ship fewer than 25 units in a month.
For apparel and shoes, a returns processing fee is applied for each customer-returned unit. No thresholds are applied and fees are charged as returns are made. See rates below.
Amazon gave the following example of how the return fee will be calculated and applied:
1,000 units of a product were shipped to customers in June. In June, July, and August, 120 of the 1,000 units shipped were returned. The returns threshold for this example product category is 10%*, so returns that exceed 100 units (10% of the 1,000 shipped) during the shipment month and subsequent two months will incur the returns processing fee. In this case 120 units were returned, so 20 units would be charged the returns processing fee. The fee will be charged between September 7 to 15.
They've also provided charts to help sellers understand how the fees may impact their businesses.
Amazon has come under increasing fire for the confusing web of fees that take a massive chunk out of every sale on the platform.
As Brazilian businessman Antonio Bindi, recently told Bloomberg, five years ago “Amazon was a platform that would facilitate your business operations and let you focus on what you’re good at, like creating great products. You could just send your products to Amazon, and they’d take care of everything. Now you need an entire department to deal with the complexity. The costs are prohibitive.”
After significant pushback from sellers to another new controversial fee on items with low inventory, Amazon provided a "transitional period" with a temporary delay of enforcement to allow sellers to better assess how the fees would impact their businesses but they don't show any signs of completely reversing course any time soon.
Liz Morton
Meanwhile, sellers like toy company founder and CEO Molson Hart are working to bring public awareness to the current state of selling on Amazon and how the constant fee increases ultimately hurt consumers as well, driving up prices both on and off the platform.
It was an honor to speak to @TuckerCarlson about whether Amazon is a monopoly, if selling on Amazon is profitable, and China is doing to the American economy.
— molson 🧠⚙️ (@Molson_Hart) May 10, 2024
Interview will be seen as prescient in a few years.
You can watch the documentary mentioned in my next tweet. https://t.co/036Zyb7NVf
How will the high returns fee and other recent Amazon fee increases impact your ecommerce business? Let us know in the comments below!
