What is Returns Processing Fee?

The returns processing fee is active as of June 1, 2024 for all products except apparel and shoes (see below for details on apparel and shoes). Amazon states this fee will help reducing waste and operational costs. The fee will be applied to products that have a higher return rate than a threshold specific to the product’s category. We will use the following four factors to calculate this fee:

Fees Table

Return rate threshold table

Example Calculation

Let’s say you sold and shipped 100 units of a product in May. The return rate threshold for this product is 8%. So, you have room for 8 returns during May, June, and July without incurring a fee. If you receive 12 returns during these 3 months, the last four items will incur the returns processing fee, and the fee will be charged between August 7-15.

Are there any exemptions?

A product is exempt from this fee if:

• It shipped less than 25 units.
• You are enrolled in the FBA New Selection program, but only for the first 20 units of each eligible parent ASIN.

What about apparel and shoes?

For apparel and shoes categories, the return processing fee structure differs. Each returned unit will incur a fee, regardless of the total return rate. There is no threshold in these categories. Fees are charged as returns are received. See the Fees table above.

How can you avoid returns processing fee?

To avoid returns processing fee, you need to keep your return rate below the product category’s return rate threshold. In order to reduce your return rate, you have to be aware why customers are returning your products.

Utilize Profit Cyclops’ Return Orders report to identify wht customers are returning your products. By this report, you can monitor return reasons and take corrective measures to prevent future returns.For example;

• If the reasons are generally about the size of the product, you should alter the pictures of the product to reflect the size more clearly.
• If the reasons are generally about the product description, ensure your descriptions are clear, accurate and highlight any important details.

So, by using Profit Cyclops’ Return Orders report, you can significantly reduce your return rate, minimize processing fees, and ultimately improve customer satisfaction.