Blog

    How to Track and Reduce Your Return Rates on Amazon

    Written by Tristan Williams
    on July 15, 2021

    Amazon makes returns quick, easy, and free for their customers in order to encourage purchases by reducing the risk for the customer. While Amazon customers love the ability to make easy returns, Amazon sellers have to deal with the aftermath. Amazon FBA Returns are an unavoidable part of every seller’s business. As a seller, it’s important to keep track of your return rates and make sure Amazon is reimbursing you accurately.

    How to Check Your Amazon FBA Returns Rates

    Returns are part of the Amazon business, and it is essential for sellers to keep track of returned items...

    On Seller Central 

    One way to track returns is through the Amazon FBA Returns Report in Seller Central. To get to that report, go to Amazon Seller Central, look at the menu at the top of the page, find the Reports tab, and click “Fulfillment” from the drop-down menu. This will open a menu on the left, where you then go  to Customer Concessions and select “FBA Customer Returns.” Select the length of time you want to view (30 days is typical) and click  “Generate Report.” You can then view all of the items returned during that date range, with the status on the right. 

    On myHorizons

    An easier way to keep track of both your return rate and individual returns is through Envision Horizons’ software, myHorizons. Once logged into my Horizons, go to the Customer Insights tab and select Returns Analysis. Here, you will be able to view a graph of your monthly return rates over time, which you can view for all ASINs or for any specific ASINs. We use this graph to gather valuable insights about health and performance. Oftentimes, the graph will show a spike in returns during online events like Prime Day, Black Friday, Cyber Monday, and Christmas. Other times, the graph will show a spike in return rate that could be indicative of a larger issue. View an example of the graph below. Under the graph, there is a complete table of returns by reason. The table breaks the returns down by reason and shows how many units have been returned ad how many have been reimbursed. This can also offer valuable insights that can help you identify problems and make changes to reduce your return rates. An example of this table is shown below...

     

    myHorizons Return Rate

    myHorizons Returns Analysis

    Now that you are able to calculate your return rate and view all of your returns by reason, what does all of this mean?

    Though Amazon will put back most of your returned items into your sellable inventory, some may be flagged as damaged or defective. These items will be part of your “unsellable” inventory. If Amazon determines that they are at fault for any of your unsellable items, they will take responsibility, remove it from your inventory, and fully reimburse you. However, if any of your inventory is marked as “unsellable” at the fault of you (the seller) or the consumer, you will need to create a removal order to get the item sent back to you or to have Amazon dispose of it. Both of these options cost a fee. The benefit of having the item shipped back to you is that if you find there is nothing actually wrong with the item, after inspection you can send it back to be sold. 

    Reducing Your Amazon FBA Return Rates

    If left unchecked, returns can severely hurt your profits. Fortunately, with the insights you have gathered from your return analysis, you can start taking action to reduce your Amazon return rate. 

    Use Return Reasons as Actionable Feedback

    Tracking your returns allows you to delve deeper into the reasonings. The nice part about Amazon's returns is that the customer is required to give a reason for the return, and as a brand, this can offer great insight. For example, if you are receiving common concerns such as apparel sizing being too large, you have an opportunity to fix this issue and improve reviews by either adjusting the product detail page to better set expectations or updating the product itself. Amazon lists 72 different official reasons for a customer's return, and many of these return reasons can and should be used as valuable feedback. Return reasons aren’t the only way to check if your products are meeting the expectation of the customer. In addition to looking at the return reasons we always advise clients to be looking at negative reviews and even the three and four-star reviews for valuable information on the customer experience.

    Add Detail to Your Product Listing

    Along similar lines, you should also be evaluating your return rates by ASIN. This way, you are able to see if there are certain products or products variations in your catalog that have a higher than average return rate. If a product is returned more frequently than expected, it is likely that your listing is playing a part. After identifying a high return rate product, you can then look internally to figure out how that can be resolved. One cause might be a lack of detail included in your product listing. By adding information to your product listing, you are helping to manage your customer’s expectations. Make sure that your product descriptions include details like exact product dimensions, size, color choices, weight (if relevant), and material. You should also include manufacturing information, warranty information, and any policies you have such as your return policy or satisfaction guaranteed policy. Providing answers to frequently asked questions in your product listing can also be a very effective way to manage expectations. Lastly, for products that require assembly or have detailed instructions for use, make sure to include this essential information. 

    Improve Creative Assets

    Having professional product photos is key to success on Amazon. Not only do they help your products stand out from others, but they can also be used to provide transparency for your customers. High-resolution photos at multiple angles are essential, and if you have different variations of your product you need photos per variant as well. Also, leverage enhanced brand content and video to give your customers an even more in-depth look at your product. Providing helpful creative assets (such as a close-up of the ingredient label) provides the customer with valuable information and demonstrates transparency which leads to more sales and fewer returns.

    Include a Sizing Guide

    For apparel (or any product that varies in size/measurements), including a detailed sizing guide helps customers choose the best fit for them, resulting in fewer returns. When building a sizing guide, make sure to include exact values so buyers can take measurements at home to choose the best fit. It can also be helpful for customers if you describe how your sizes compare with that of a popular brand.

    Inspect Your FBA Products

    Inspect your FBA products thoroughly to avoid returns! Damaged packaging or product in less than perfect condition will not only affect your return rate, but also hurts your brand reputation, and seller feedback score. A thorough inspection is especially essential for brands with luxury or high-ticket items. Sellers might consider creating a replacement agreement with your supplier if you frequently find defective products during your inspection, or look to find a new supplier if problems persist. 

     

    Learn More About myHorizons

    Our technology, myHorizons, is a real-time marketing analytics and AI-powered advertising optimization platform. Built by our software developers, myHorizons enables our team and our clients to analyze profitability, optimize advertising, monitor consumer behavior, discover new opportunities, and make business decisions with confidence. Learn more about the many features and tools included in myHorizons on our technology page.

    The Latest From Envision Horizons

    For more e-commerce tips and industry insight, sign up for our monthly newsletter at the bottom of the page where we provide a recap of our content, update you on industry trends, and link the most important Amazon news articles we read throughout the month. 

    Subscribe to our Youtube channel for valuable e-commerce content such as interviews with experts and our video series on common mistakes made by Amazon sellers! Check out our most recent episode of Common Mistakes where we discuss Amazon Account Suspension including how to prevent it and how to recover.

    E-commerce is complicated, we're not.

    Envision Horizons is a team of specialists that provide a broad scope of e-commerce expertise. We work with top brands to scale their businesses on Amazon and Walmart, and we want you to be our next partner. Request a free audit below to see if your brand qualifies for a complimentary consultation from our experts. 

    Request An Audit