The Information reports that as "returns have become a costly problem for the e-commerce industry more broadly after skyrocketing during the pandemic," a new feature introduced by Amazon shows that it is not immune from the problem.
According to the story, "Amazon in recent months has started warning customers that an item they’re about to buy has been 'frequently returned,' suggesting customers check 'the product details and customer reviews' before they purchase." Amazon also has "raised the fees it charges sellers using its fulfillment services earlier this year, in addition to often charging sellers an additional processing fee for 'unfulfillable' inventory that can’t be resold after return. The new policy comes as Amazon is grappling with a sharp slowdown in e-commerce sales, causing it to trim costs and lay off staff."
The Information notes that "Amazon’s return policy generally allows customers to return new and unused items for 30 days after purchase, including by dropping them off at Whole Foods stores. While Amazon’s policy helped free returns become commonplace for e-commerce retailers, it’s resulted in mounting costs for sellers."
The story notes that it appears that shoppers who buy from third-part sellers "on Amazon are more likely to return items than shoppers from other channels, most likely due to Amazon’s easy checkout, which requires just a few clicks to complete, and its quick Prime shipping."
- KC's View:
So here's a crazy concept. Stop selling items that are "frequently returned," either because of poor quality or crappy reviews.
Sure, that may be at odds with the whole "everything store" thing. But a lot of things that Amazon is doing these days don't seem consistent with its traditional approach, at the cost of its vaunted customer-centric values. This would be something that Amazon could do that would serve its shoppers better - a little curation of the merchandise might be a welcome bit of customer service.
BTW … I'm not sure how bad the costs are, but I'll bet they're high, and I'll be they're also high on the list of things that Andy Jassy wants to trim. So look for Amazon to make it a little less easy or a little bit more costly for shoppers to make returns.
MNB reader Daniel McQuade sent me a note yesterday that pointed out how Jeff Bezos, a long time ago (and seemingly in a retail galaxy far away) said:
"Amazon is not too big to fail. In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”that "one day, Amazon will fail, but our job is to delay it as long as possible."
Daniel observed, with some logic, that at the moment the priority at Amazon isn't focusing on the customer, nor is it on innovating faster and more aggressively than anyone else. Rather, the focus seems to be on delaying the expiration date.