How to Reduce Your Return Rate on Amazon?

Man is trying to reduce his return rate on Amazon.
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Being a seller on Amazon is all about making profits. But no matter what, you will face issues along the way. Returned products annoy every seller and might even make them mad. When products are returned to you, customers aren’t 100% happy with their purchase. This puts you at risk of losing your brand reputation or even account suspension.
Another thing that makes returns a nightmare for Amazon sellers is the cost. In the last few years, the cost of return deliveries (of course, paid by the seller) has grown by 75%. In 2020 alone, this cost was around 550 billion dollars. This is A LOT!
So as a seller on a platform with lots of rules and regulations, you should always watch your return rate closely and try your best to lower it. If left unattended, these rates can hurt your profit or, even worse: get you suspended. In this article, you will understand precisely the return rate, and then you'll be presented with some practical ways to lower it.

What is Amazon Return Rate?

 Any Amazon seller can experience returns or negative comments about their products. Let’s face it: bad experiences happen. It’s only natural. But the important thing is keeping these bad experiences limited. The term “Amazon Return Rate” refers to the rate of returned products divided by the total sales (most of the time is calculated in a specific period). This includes the orders returned by the customer or refunded by Amazon.

What is ODR?

As an Amazon seller, this metric can be helpful to you too. The Order Defect Rate or ODR is a performance metric that shows how standard your sales are (the standard being the customer service expectations). ODR is calculated based on the number of times the negative metrics were incurred divided by the number of overall orders.

How is the Return Rate Calculated?

Now that you know about this rate, you might wonder how you should calculate it. This rate is calculated in percentage, like below:

A number of returned orders (or refunded ones) owing to product-related issues Divided by a total number of shipped orders.

Why Do Customers Return What They’ve Bought?

A customer may choose to return their purchase because:

  • They have received a defective or damaged product
  • The size doesn’t fit them (this happens in some categories like clothing or shoes)
  • Quality of the product doesn’t meet customers’ expectations
  • The product detail page failed to give the customer the detail they need
  • The product is delivered very late
Man is carrying the returned products to Amazon car.

To help lower the return rate, some sellers work with the Amazon FBA Business. This is a service that can decrease your workload and help you concentrate on quality products and successful shipping. FBA or Fulfillment by Amazon allows sellers to outsource the order fulfillment to Amazon itself. Working with FBA will enable Amazon to take over the whole process of picking, packing, and shipping the order. Amazon Also provides customer service and returns. Most of the time, Amazon FBA return rate is lower.

How Do I Find My Return Rate on Amazon?

In order to lower the return rate, you should first study it carefully. But where are the numbers? To find your overall refund rate and a number of refunded items:

  • First login to seller central on Amazon.
  • Click “Reports.”
  • Click “Business Reports.”
  • Here, you will find the “Sales Dashboard.” From this dashboard, you need to tap on “Seller Performance” from the options under “By Date” (on the screen’s left)
  • Now, you can view the metrics sorted by date. “Refund Rate” is also here.

What Happens When Your Amazon Return Rate is High?

As we said before, Amazon won’t tolerate very high return rates. But some products are more likely to get returned, not because you are a lousy seller, but because they’re naturally this way. Let’s take a look at return statistics for some categories:

  • Books and media: 5-7%
  • Home, kitchen, and garden goods: 8-10%
  • Consumer electronics: 25-35%
  • Clothing and fine jewelry: up to 40%
Amazon packed products in front of home's door.

Amazon watches the statistics very closely and considers a 10% return rate normal. If your account has a higher rate than that, you will receive a performance alert, and then Amazon will remove the product page (or may even suspend your account). After that, you will need to send an appeal letter and get back the listing.

Read More: Amazon FBA Sales Tax Guide in 2023

How to Lower Your Amazon Return Rate?

There are definitely ways to decrease the return rate on Amazon. These may not be as easy as “Just selling better products,” but if you try to do them, you will succeed. Don’t forget that decreasing the return rate is not an overnight job. It takes research and hard work. You might even have to limit your products. Here are some practical ways to lower the Return rate of Amazon:

Control Your Prices and Offer Promotions

when your prices are high, the customer expects high-quality, unique products. Needless to say, many times he or she will be disappointed after receiving an ordinary one. If possible, try different price points and run promotions from time to time.

Show, Don’t Tell!

one of the best ways to introduce a product to your customers is to show them exactly what it is and how it works. Especially in gadgets and electronics, this will work miracles. Once the customer gets to “watch” the product work, the risk of returning it will decrease significantly. Include high-quality videos and detailed pictures. You can easily do this with your smartphone. Your customers will surely appreciate seeing every aspect of the product.

Write Winning Descriptions

more often than not, returns happen because the customer doesn’t exactly get what they were expecting (remember the “what you order, what you get” memes?). If a specific product is returned more frequently than expected, you should take a look at the listings. Correct your product description and include details. Things like dimensions, weight, size chart, material, warranty information, and… Also describe precisely how it is used and the pros and cons. In the “ How to increase sales on Amazonarticle, you will find accurate and updated tips about description writing and increasing sales. Take a look at it if you’re searching for ways to sell more.

Product's description can help you to reduce return rate on Amazon.

Include a Size Chart

some items require details like size. If you sell clothing, shoes, or accessories, your customers need to know their size and make sure they’re making the right purchase. Upload a chart and include exact values. This way, each customer can take the measurements at home and buy their size. Many returns are caused by imprecise measures. Remember that Amazon has its own size requirements, and you should be updated on them.

Make Shipments as Smooth as Possible

No one wants to receive a broken or damaged product, especially after waiting a long time. One way to decrease the Amazon FBA return rate is to make sure your inventory is packed, and products are ready to ship. You can’t prevent pandemics or post challenges, but you CAN control your own shipment flow.

Encourage Feedback

Your first step towards a lower return rate is understanding why it happened in the first place. Customer feedback is a valuable asset for any seller on Amazon. When people write what is wrong, you can get to it quicker.

Pick Strong Packaging

Many Amazon purchases get delivered broken, wet, or even completely destroyed. Package your products firmly and make sure they can endure their journey.

If you don't pack your products strongly, it will increase your return rate.

Avoid Categories With High Return Rates

This might not be good advice to sellers who have been selling things like jewelry and clothes for years, but if you are new to Amazon, don’t pick your products just yet. Read about Amazon products and find out what packages return most. You better avoid those, at least in the beginning. Some categories have more return rates. Things like clothing and fine jewelry (up to 40%) and consumer electronics (25-35%).

Pay Attention to FBA Products

Your Amazon return rate will probably decrease when you cooperate with FBA. Make sure you are sending them mint condition, high-quality products so that they won’t get returned. Please don’t take this cooperation for granted because it affects your brand reputation and even your seller account.

Have a Data-Driven Approach

data helps you know the reason for past returns and prevent future ones. Gather data about unhappy customers and take notes of what made them unhappy. Data is the foundation of today’s successful businesses. You should ask questions like what products are being returned the most. Or what is the main reason for returns?

To analyze the issues, Amazon itself has provided you with an option. Just go to seller central and select the Customer Concessions option and then click on Returns. Here you can select a period and see the return report.

Final Thoughts

You can’t fix a problem without knowing what caused it. If you don’t want to open your Amazon sales account one day and get surprised by the return rate numbers, you better think beforehand. An ounce of prevention is better than a pound of cure. Take a look at your profile and take notes. What could be better? Where are your weak points? What products have the most negative comments and disappointment? Start fixing the problems one by one. This could take a while, but the result will affect your return rate and make you a better seller on Amazon. And What does becoming better mean? More sales and more money!

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