Usually, I have good luck with things I buy from Amazon, but when I had to return two defective items two weeks apart, I wondered if they track the number and frequency of returns. And if those rates are high, suspend or close an account. The answer, it turns out, is yes. Amazon doesn't disclose how many returns, how often, and for what reasons they may close an account, so consumers are in the dark. This is a statement given to CNBC:
"We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time. We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers. If a customer believes we've made an error, we encourage them to contact us directly so we can review their account and take appropriate action." 1
Not all bans are complete. Some customers are allowed to continue making purchases but aren't allowed to return anything. A full ban means losing access to any gift card balance and the remainder of a Prime membership.
Online shopping is not like in-store shopping. We don't get to see or try on items. So many people assume that online retailers are ok with consumers ordering products to try out and making a return if they aren't satisfied for whatever reason. And it doesn't help that some retailers make the return process very convenient. Amazon offers free returns and convenient drop-off locations like Kohls and UPS Stores. They also offer Prime Wardrobe, which allows customers to try up to eight items, pay for what they keep, and return the rest. This leaves consumers with the impression that returns are an integral part of online retailing, something they don't expect to be penalized for doing. But returns are expensive for retailers. More than half of all Amazon sales come from third-party sellers. Many of these sellers are small businesses that can't afford high return rates.
Examples of High Return Rates
It appears Amazon will ban accounts if they determine someone is taking advantage of the system. The number of returns and the kinds of metrics they are using that will trigger a ban is unknown. It can be difficult for customers to avoid being banned if they don't know what the criteria are. Amazon doesn't specify what they mean by "abusing the system." Does it just refer to suspected fraud or does it also apply when the cost of returns exceeds the profit the company is making from a particular customer?
The law firm behind amazonsellerslawyer.com has a blog post titled Amazon's Return Policy: suspended for returning items too often that includes a table with a banned customer's purchases and returns. Over a 5-year period, this customer had 550 purchases and 43 returns.2 That might not look too bad but that's an approximately 8 percent return rate. And if those returns are mostly high-priced items like electronics and the nonreturned items are mostly cheaper items like books, the company may be experiencing a loss from this customer. According to a Guardian article, a banned customer had 343 orders with 37 returns. That's an almost 11 percent return rate.3
Even if returns are legit, they may trigger whatever algorithm is being used to detect fraud. The higher the return rate, the higher the risk.
Examples of Abuses
Committing fraud is one reason many people get banned. An example is swap scamming. This is when someone buys an electronic item to replace something that has broken. They then claim the new item is defective and return the one that had gone bad. Retailers pay attention to this and often know when the returned item is not the one that was sent.
Some people buy items because they are being paid to write fake reviews. Because they purchased the product, their review is labeled Verified, which gives it more legitimacy. They then return the item.
When initiating a return, you are asked why you are making it. If you say you changed your mind, there's a possibility you may be charged for the return. If you claim an item is defective when it isn't, that may be used against you.
Some consumers buy an item and then when they find it cheaper elsewhere, return the original purchase.
Since you don't know what will trigger a ban, it pays to be cautious with returns. Definitely don't commit fraud and reconsider continually making returns to save a few dollars. Go over your orders to get a rough idea of what your return rate is. Many people may not have a good idea of how many items they return. I went over my orders for 2020. I placed 106 orders and had three returns. Since I order from Amazon Fresh every week, those 106 orders account for hundreds of items which puts my return rate well under one percent. The most expensive of those three returned items was a defective $50 electronic device that I had replaced rather than refunded.
If you have a lot of returns, you may want to consider how to bring that rate down. Do you buy a lot of clothes or shoes that you return if you don't like the fit? Consider using Amazon Wardrobe if you are a Prime member. Are there some cheap items you normally return if they're defective that you may be willing to take a loss on? Do you have packages that go missing often which you then ask to replace? Consider having purchases sent to an Amazon locker instead, if they are offered in your area. With electronic items, consider buying from Best Buy, Target, and Walmart as well. That way, if you aren't happy with your purchases, you will be spreading returns among a variety of retailers.
How many returns is too many before your Amazon account is banned?
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
© 2021 LT Wright