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Refund Administration Fee Sample Calculations

The following examples illustrate how we calculate the refund administration fee.

Example 1: Refund of a single item from an order

Suppose you receive the following two-item order:

ItemA (item price) $300.00
ItemB (item price) $50.00
Shipping on ItemA $40.00
Shipping on ItemB $5.00
Gift Wrap on ItemA $5.00
Gift Wrap on ItemB $2.00
Tax on ItemA $25.00
Tax on ItemB $4.00
TOTAL $431.00

You then refund ItemA, including shipping and gift wrap (this is commonly done if the customer cancels the item before the order ships). Assuming the referral fee for items in this category is 15%, we calculate the refund administration fee as follows:

Refund administration fee for ItemA

= Percentage of the original order-related fee x [ReferralFee x (ItemA + ShippingItemA + GiftWrapItemA)]
= 20% x [15% x ($300 + $40 + $5)]
= 20% x [15% x $345]
= 20% x [$51.75]
= $10.35

The refund administration fee for this line item cannot be greater than $5, so we cap it at $5. Other item-related charges, such as shipping and gift wrap, are included in the refund administration fee calculation, but tax is not. Amazon does not retain a portion of any refunded taxes.

Example 2: Refund of multiple (different) items from an order

Suppose you receive the same two-item order as described above, but this time you refund the order in full, including shipping and gift wrap (this is commonly done if the customer cancels the order before it ships). The initial refund administration fee calculation applies to each line item in the refund, as follows:

Refund administration fee for ItemA

= Percentage of the original order-related fee x [ReferralFee x (ItemA + ShippingItemA + GiftWrapItemA)]
= 20% x [15% x ($300 + $40 + $5)]
= 20% x [15% x $345]
= 20% x [$51.75]
= $10.35

Refund administration fee for ItemB

= Percentage of the original order-related fee x [ReferralFee x (ItemB + ShippingItemB + GiftWrapItemB)]
= 20% x [15% x ($50 + $5 + $2)]
= 20% x [15% x $57]
= 20% x [$8.55]
= $1.71

Refund administration fees cannot exceed $5, so the first is capped at $5. Other item-related charges, such as shipping and gift wrap, are included in the refund administration fee calculation, but tax is not. Amazon does not retain a portion of any refunded taxes.

Example 3: Refund of multiple quantities of the same item from an order

Suppose you receive the following three-item order:

ItemA (quantity: 2) $600.00
ItemB $50.00
Shipping on ItemA $20.00
Shipping on ItemB $5.00
Gift Wrap on ItemA $5.00
Gift Wrap on ItemB $2.00
Tax on ItemA $25.00
Tax on ItemB $4.00
TOTAL $771.00

You then refund both quantities of ItemA, excluding shipping and gift wrap (this is commonly done if the customer returns the items after the order has shipped). Because the refund administration fee calculation applies to each unique line item in a refund, and multiple quantities of a single item comprise a single line item, we apply the calculation one time for both ItemAs. Assuming again that the referral fee for items in this category is 15%, the initial refund administration fee (before applying the $5 cap) is calculated as follows:

Refund administration fee for both ItemA's

= Percentage of the original order-related fee x [ReferralFee x (ItemA's)]
= 20% x [15% x $600]
= 20% x [$90]
= $18.00

As this refund administration fee is greater than $5, we cap it at $5. No refund administration fee calculations apply to subsequent refunds involving this item because the $5 cap is already met.

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