In response to uncertain economic conditions and financial challenges, Amazon has started displaying a warning for items that are frequently returned. E-commerce return rates surged during the pandemic lockdowns and, although they have since decreased, they remain significantly higher than before the pandemic.
The new warning label reads, “Frequently returned item: Check the product details and customer reviews to learn more about this item.” Not all users can see the badge, suggesting that Amazon may be implementing a gradual rollout or a limited test. Furthermore, the flagged products appear to be exclusively from third-party vendors fulfilled by Amazon.
While returns and exchanges offer customers shopping confidence, they can be costly for businesses due to shipping, processing returned inventory and other associated expenses. By adding this label, Amazon likely hopes to encourage sellers to improve their listings or products, as a prominent alert could significantly impact an item’s sales. With return rates higher than usual and companies reducing spending (Amazon announced 27,000 layoffs this year), it is logical for the company to take action.
Some sellers claim that customers return items more frequently on Amazon than from other outlets, attributing this to the platform’s easy checkout process and rapid Prime shipping. Earlier this year, Amazon raised fees for “Fulfilled by Amazon” sellers to pass on some of the additional costs.
Amazon spokesperson Betsy Harden confirmed to The Information, “We’re currently showing return rate information on some product detail pages to help our customers make more informed purchase decisions.” This isn’t the first instance of Amazon displaying sales data publicly, as the company recently started showing badges indicating the number of sales a product made (e.g., “100K+ bought in the past month”).
The National Retail Foundation (NRF) reported in December that online return rates increased from 8.1% in 2019 to 18% in 2020, with customers returning $428 billion in merchandise. Rates dropped slightly to 16.5% in 2021. Another issue is return fraud, with retailers losing $10.40 for every $100 in returned merchandise, according to the NRF.
