The biggest problem I see for our business is this:
Why are you introducing a Returns Processing Fee?
The Returns Processing Fee applies to products in selected categories where Amazon’s stated policy offers free returns to customers, which helps to build customer trust and to encourage purchase. These categories include Apparel (including Sports Apparel), Watches, Jewelry, Shoes, and Luggage. The Returns Processing Fee helps offset the additional cost incurred for offering and processing free shipping for returns.
How will you calculate the Returns Processing Fee?
The Returns Processing Fee will be equivalent to the total fulfillment fee (Order Handling, Pick & Pack, and Weight Handling) for a given product using the rate card above. This Fee will only apply to units actually returned by customers, and only for products sold on Amazon.com in selected categories for which we offer free customer return shipping—currently the Apparel (including Sports Apparel), Watches, Jewelry, Shoes, and Luggage categories. When calculating the Returns Processing Fee, we assume a single unit per shipment. In addition, products that were eligible for Zero-Fee Fulfillment will be subject to the Returns Processing Fee; in other words, when calculating the Returns Processing Fee, we assume the sale price to be less than $300. In the case where Amazon takes responsibility for loss or damage to a returned product (for example, lost or broken in transit), the fee will not be assessed.
Please note that in cases where multiple units have been shipped to a customer in a single order, the Returns Processing Fee paid on a single unit may be higher than the fulfillment fees. This can occur because we assume a single unit per shipment when calculating the Returns Processing Fee.
How can I estimate the impact of the Returns Processing Fee?
You can use the Returns report in Seller Central to look up your historical returns, and our fee calculations above to determine the expected fee per unit. As noted above, the Returns Processing Fee only applies to returns in certain categories.
We sell a lot of apparel. That is one of the high return categories because it’s hard to buy clothing online without being sure of sizing. SO, the FBA fees for an item will be $2.42 for a 1 lb item. Then if the customer returns the item, Amazon charges us $2.42 again?? That’s the way I’m understanding it.
Here’s the breakdown of a transaction of ours which was then refunded.
Purchase price: $20.00
FBA per order fulfillment fee: -$1.00
FBA per unit fulfillment fee: -$1.00
FBA weight based fee: -$0.37 (This will be $.42 after fee changes)
Change to your seller account balance $14.63
So we received $14.63.
Customer then returned item:
Refund commission: -$0.60
Change to your seller account balance -$17.60
So we’re already in the hole $2.97 after all is said and done, because Amazon keeps most of their fees right? Then add another $2.42 on top of that once the new changes take effect? That’s absolutely crazy.
My math could be way off, and I hope it is.