Disclaimer: It is important to note that Amazon’s policies and fees are subject to change. The information given in this article is correct as of the published date. However, for the most up-to-date information, please refer to Amazon’s policies directly.
Most of Amazon’s policies are buyer-centric. As a seller, seeing the company going overboard to please customers to the detriment of your profit margins can be frustrating.
It’s not all gloom, though. There’s one Amazon policy that puts money back into your business: the Amazon restocking fee. The policy helps you deal with the logistical costs of handling returns, which are an unavoidable part of selling on Amazon.
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TL;DR - Amazon Restocking Fees
Amazon’s restocking fee policy has strict guidelines that all sellers must follow. These guidelines are consistent with the company’s refund policy, which most customers are already familiar with.
Here is what you need to know about the Amazon seller restocking fee policy:
- Items returned within the return window in their original condition are ineligible for restocking fees.
- Restocking fees are based on product type and item condition.
- Amazon restocking fee refund deduction has strict caps; for instance, damaged items attract restocking fees of up to 50% of the item price.
- Where the restocking fee is 20% or greater, you must upload a photo of the item.
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What is a Restocking Fee on Amazon?
There are situations where a full refund is not tenable. Amazon sellers can issue partial refunds for specific qualifying return requests by deducting a predetermined percentage of the item’s original price. This charge is the restocking fee.
It costs money and time to process returns. This policy is Amazon’s way of ensuring businesses stay afloat when customers use their generous refund policy.
The maximum restocking fee a seller on Amazon is allowed to charge depends on:
- The product category
- Buyer’s reason for returning the product
- The condition of the product upon return (missing parts, damage, or signs of customer use)
How Much Is the Amazon Restocking Fee?
You can charge a restocking fee for various items as follows:
Item | Maximum Restocking Fee |
Buyer got a product different from what they ordered | 0% |
Buyer refuses delivery because of shipping damage | 0% |
Items returned past the return window | 20% |
Opened or unwrapped vinyl records, cassette tapes, CDs, DVDs, and VHS Tapes | 50% |
Items not in their original condition (signs of use, damaged, or missing parts) | 50% |
Opened software or installed video games | 100% |
Opened toy figurines, board games, collectible cards, tabletop games, Pokemon cards, and other qualifying collectible items | 100% |
When Does Amazon Charge a Restocking Fee?
Amazon allows a 30-day return window after delivery. For items in their original condition returned within this window, a restocking fee does not apply. A restocking fee will also not apply for the following scenarios:
- When the customer receives the wrong item
- When the item specification differs from what the customer ordered (color, size, capacity, etc.)
- When the product is damaged during shipping, and the customer refuses delivery
You may charge a restocking fee for any returned product in unsellable condition, damaged by the customer, or missing parts.
Why Does Amazon Charge a Restocking Fee?
Ever wondered why you’re hit with a restocking fee when a customer returns an item?
Check the top 3 reasons:
- Cover Costs: When a customer returns an item, Amazon incurs costs to inspect, repackage, and relist it. Return processing can be costly, but the restocking fee can help cover some of the costs.
- Discourage Returns: Amazon charges restocking fees to discourage customers from misusing its return policy. By letting customers know they might be charged a fee for returning an item, Amazon can reduce the number of returns and save costs.
- Encourage Responsible Shopping: When Amazon charges a restocking fee, customers are likely to carefully consider their purchases and make more informed purchasing decisions, ultimately reducing the number of returns.
Common Issues with Amazon Restocking Fees
Here are some issues sellers face with Amazon restocking fees:
- Automatic refunds: Amazon sometimes issues automatic refunds when your customer initiates a return. However, if the product is damaged, opened, or missing parts, you might miss the chance to inspect it and apply the restocking fees.
- Limited flexibility in managing returns: While you might set your Amazon restocking fees, you can’t charge if customers claim the item was defective or damaged, either by Amazon or you.
- Minimal direct communication with customers: Amazon controls all communication with customers, so you can’t explain the reason for a restocking fee. This can result in negative customer feedback and A-to-Z Guarantee claims.
- Potential policy violations and suspensions: You might mistakenly apply restocking fees to items with defects or Amazon errors, which can lead to penalties, policy violations, and account suspensions.
Amazon’s Restocking Fees vs. the Competitors
Restocking fees for Amazon FBA vs. 3PL (third-party logistics) providers are different.
Here’s a side-by-side comparison between Amazon, ShipBob, Deliverr, and Shopify:
Restocking Fee
The restocking fee differs among different fulfillment providers are broken down below:
- Amazon FBA has transparent and standardized restocking fee policies that range from 20% to 100%, depending on the item’s condition.
- ShipBob allows sellers to set their own restocking fees.
- Deliverr (now part of Flexport) allows sellers to set their own restocking fees.
- Shopify Fulfillment Network (SFN) allows sellers to determine their own restocking fees.
Fulfillment Speed
Each fulfillment service offers different delivery speeds. Let’s break down how quickly you can expect customers’ orders to be fulfilled:
- Amazon FBA has access to Prime shipping, which offers 1—to 2-day delivery.
- ShipBob takes 2 to 4 days to ship within the US.
- Deliverr offers fast shipping options, including 2-day delivery for eligible products.
- Shopify Fulfillment Network has 2-day shipping available in certain regions.
Disputes Handling
While some fulfillment services take complete control over the return process, others let you manage the disputes and returns.
Let’s explore how each service tackles this:
- Amazon FBA takes care of the entire return process—handling customer disputes, inspection, and restocking—allowing you, as the seller, to focus on growing your business.
- ShipBob offers return management services but lets sellers handle customer conflicts.
- Deliverr offers return management services but lets sellers handle customer conflicts.
- Shopify Fulfillment Network offers return management services but lets sellers handle customer conflicts.
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How to Calculate Restocking Fees
The restocking fee is calculated based on the original item price. Amazon’s guidelines also provide a maximum restocking fee for each specific item category, and you must set your fees strictly within these caps.
Amazon Restocking Fee Examples
Let’s assume you sell digital bathroom scales on Amazon at $27 a piece for illustration purposes.
If a customer buys such a scale and returns it outside the return window, you can charge a 20% restocking fee. The deduction, therefore, is 20% of $27, which is $5.40. The customer’s refund will be $21.60.
If there are missing parts or signs of damage, you can charge up to 50%. With a 50% restocking fee for such a scenario, the deduction from the refund will be 50% of $27, which is $13.50. The customer’s refund will be $13.50.
Note that items returned in their original condition within the return window are ineligible. Therefore, if the buyer returns the scale unused after, say, one week, you will refund the entire $27.
Decoding Amazon Restocking Fee Policy
The Amazon restocking fee policy provides guidelines for determining eligible items and how much to refund.
The policy covers:
- Return windows and associated eligibility
- Guidelines on how much to charge based on product type and item condition
- Caps on how much you can charge – for instance, for an item with missing parts, you are allowed up to 50% of the item price.
Tips for Dealing with an Amazon Restocking Fee Dispute
You should only apply a restocking fee to discourage frivolous returns and cover the costs of handling and restocking returns. Using the policy responsibly and staying within Amazon’s guidelines, there’s no reason to panic when a customer initiates a restocking fee dispute.
Below are some tips on how to deal with such disputes:
- Respond promptly and communicate professionally: A prompt and professional response helps reduce the chance that customers escalate the matter. They must know they are not being scammed and must feel heard.
- Gather evidence necessitating the restocking fee: When a returned item is damaged or has missing parts, take photos and videos as evidence. This will prove useful when supporting your claim to Amazon customer service staff.
- Communicate the return policy to the customer: Customers may dispute restocking fees because they are unfamiliar with Amazon’s refund policy. Refer them to this page, which details refund windows and partial refunds.
- Get Amazon customer service to mediate. If you cannot settle the dispute with the customer, it is best to escalate the issue and let Amazon customer service handle it.
- Reduce disputes by being proactive. Most disputes are caused by a lack of communication. As such, set a reasonable restocking fee and be transparent about it on your product page.
You will likely lose some disputes even when you stick to Amazon’s guidelines. Consider it a cost of doing business on Amazon and set your margins with such realities in mind.
How Sellers Can Set Restocking Fees on Amazon
Follow these steps to set up your restocking fees in your Amazon Seller Central account:
Step 1: Log In to Your Amazon Seller Account
Go to your Amazon Seller Central and enter your information to log in.
Step 2: Go to the Settings Tab
Head to the Settings menu, then click Return Settings to change your return policies, including restocking fees.
Step 3: Choose the Percentage of the Item Price
Scroll down to the Restocking Fees section and click Edit. Then, specify the percentage or flat rate to charge based on an item’s condition.
Step 4: Select the Items the Fees Apply to
You should clearly outline the scenarios under which you’ll charge the restocking fees.
For example:
- Defective or incorrect items—no fee
- Non-defective and opened items —20% fee
- Damaged items that were not caused by your error—up to 50% fee
Step 5: Save Your Changes
Once you’ve set the fee, go to the Manage Your Returns tab to update and customize your Return Policy so your customers know the restocking fees.
Click Save to apply all your restocking fee settings.
Note: Amazon reviews refund requests automatically, and it might waive the restocking fees you set if it believes the issue is due to your error as a seller.
Looking for more guides on Amazon? Check these out:
- Amazon FBA return fees—decoded for sellers
- Amazon FBA vs. FBM Fees
- FBA disposal fees
How to Avoid Amazon Restocking Fees
There are only two ways to avoid issues related to Amazon restocking fees: choose not to charge a restocking fee or work to significantly lower returns.
Having no restocking fee will likely increase frivolous returns and operational costs.
Working to lower returns makes much more sense. Below are some practical tips to reduce returns on Amazon:
- Write a detailed and honest description. You want to be clear about what your product is, what it does, and how it does it. You should even consider including who the product is not for.
- Include a product video. While pictures are great, nothing beats videos for showcasing Amazon products. Use video to show the product from different angles. Even better, you want to capture the product in action if it is a tool or gadget.
- Include measurements in the product images. Some customers may skip over the measurement details in the product description, but they will pay attention if they are included in the images. Therefore, have at least one image detailing the measurements, e.g., weight, circumference, height, length, width, etc.
- Include a sizing guide for clothes and apparel. A sizing guide is imperative if you are selling apparel. A size conversion chart detailing standard EU, USA, and Asian sizes can also be helpful.
- Pay attention to customer feedback. Returns data and customer feedback will prove useful in minimizing future returns. Find out why customers return products and seek to eliminate the causes.
The most impactful way to reduce returns is to offer quality products that meet customer needs. The first step to achieving this is understanding your customers’ expectations. You should:
- Analyze reviews and customer feedback to identify problems customers want solved
- Survey past and present customers
- Work with a competent design team to translate customer expectations into usable product designs.
Once you have a product design that meets customer expectations, consider investing in sound quality control systems during manufacturing. Where manufacturing is outsourced, it is ideal to go with a provider with true and tested processes, even if they are a bit pricier.
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Frequently Asked Questions (FAQs)
Need further clarification on Amazon’s restocking fee policy? Below are some useful insights.
Can a Restocking Fee Be Applied if the Item Is Damaged?
Yes, Amazon allows sellers to charge a restocking fee of up to 50% if the item is not in its original condition. This policy covers damaged products and items with missing parts.
How Do Restocking Fees Impact Customer Satisfaction on Amazon?
Most Amazon customers are familiar with the company’s refund policies. If you have a reasonable restocking fee and professionally handle disputes, you’ll have decent customer satisfaction scores, and your seller reputation won’t be affected.
Does Amazon Cover Restocking Fees Under A-to-Z Guarantee Claims?
Amazon generally covers the restocking fee for the customer when they return a product because it is damaged, defective, or materially different from what they ordered. You can’t charge a restocking fee for products returned for such reasons. For any other reason, you are allowed to charge a restocking fee.
Conclusion
Amazon seller restocking fee reimbursement helps stores reduce the impact of restocking costs on their business. Understanding the policy and how it works will help you set reasonable customer expectations and reduce frivolous returns.
That said, you may forego restocking fees or offer returnless refunds. This is especially applicable if you sell low-cost items or sturdy goods that are not easily damaged. Such a move can help you build an excellent seller reputation and attract new buyers.
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