It used to be sellers could file a Safe-T claim after the auto-refund occurred. But the auto-refund may not occur even a week after an item is returned, which prompts buyers to file an A-Z claim. Once an order has an A-Z claim, it is not eligible for a Safe-T claim. I personally don’t mess with Safe-T claims anymore. I deduct a restocking fee and the cost of the return label from each return, unless I made the mistake (very rare). I don’t care what the buyers return reason is either because most of the time their reason is nonsense.
The bottom line is it’s Amazon’s marketplace and they designed the rules, or selectively enforces them, to reduce their costs/liabilities. If you want to be compensated for returns, then charge a restocking fee. I’d also reconsider moving away from free shipping as well. Yes, free shipping helps boost sales but also boosts returns. Spread your costs across all of Amazon’s customers so that you don’t lose your margins. If some products don’t sell well after making adjustments, dump them and replace with other products that are more suitable/profitable when sold in marketplaces.