Reselling: Part 5 – Returns

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Reselling Returns AmazonReturns are extremely disheartening when reselling product. They can quickly turn a profitable item into a costly one (depending on situation, of course), which is what this post hopes to help you avoid.

If you’re new to reselling or just want a refresher, check out the posts below:

Amazon

If you primarily sell with Amazon FBA, which most resellers do, you can expect a lot of returns (compared to other marketplaces). That’s due to the fact that Amazon takes care of the customer service for your items. Obviously, that’s a double-edged sword because it requires less work on your part, but it increases your chances of returns.

Amazon’s Return Policy
Amazon’s return policy is extremely liberal. They allow customers to return products within 30 days of receiving a product.

30 days is normal for most retailers, however, Amazon will take back product that is opened, product that has damaged packaging, and I’ve even heard reports of Amazon accepting similar but different product back as a return (e.g. and iPhone 4 returned as an iPhone 4S). Fortunately, Amazon has great seller customer service as well. In the event that an item is returned differently than it was sold, like the iPhone example above, they will usually credit your account for the item and return the item to you. That’s not guaranteed to happen, but based on Amazon’s FBA forum, that’s what Amazon has done for many sellers.

Return Process

  1. First, you get an awful refund email from Amazon that makes you wish you never bought that item to resell. It looks like this:

    Dear FrugalHackMe,

    We have initiated a refund in the amount of $XX to CUSTOMER for the following item:

    Order XXX-XXXXXXX-XXXXXXX
    1 Item You Wish You Didn’t Buy

    We will adjust your seller account accordingly.

    You can view your account at any time by logging in to your seller account and going to your seller account information page.

    Thank you for selling on Amazon,
    Amazon Services

  2. Next, Amazon refunds the customer. Depressing right?
  3. Third, the customer sends the product back to Amazon for inspection. At this point, I hope that the customer sent back the wrong item or something, and Amazon simply credits my account.
  4. If Amazon inspects the return and finds that it is in the same new condition as it was when you sold it, they will simply add it back into your order. That is the best case scenario, because you will only be out a few dollars for shipping. If Amazon inspects the return and finds that it’s “unfulfillable” then they will require that you either have it destroyed by them or sent back to you. Unfortunately, items that are opened are considered unfulfillable even if there’s nothing wrong with them.
  5. If the goes back into your inventory, great! Then your done with that return. If the item is unfulfillable, then you need to create a removal order and have the unit sent back to you for inspection.
  6. If you get the item back and it’s the wrong item or completely damaged, contact Amazon. They will help you get compensated for the issue. If the item is open but still “Like New” you can relist it on Amazon and send in the item to relist. You will likely have to lower the price when you sell it as Used – Like New, but unfortunately, there isn’t any other option.
  7. Amazon will relist the item and hopefully it will sell without being returned this time!

Avoid Returns
With Amazon FBA there isn’t a way to avoid returns, because Amazon handles your customer service and, like I mentioned above, they are very liberal with returns. The best thing to do, is to only source products with good reviews. If you find a product that’s selling, but it has bad reviews, stay away. Those items are much more likely to have returns than well reviewed items do.

I also suggest finding items to sell on Amazon that Amazon isn’t selling. This is easier said than done, because Amazon sells everything, but it’s possible. When Amazon is selling an item, they are very competitive with other stores (e.g. Kohl’s, Best Buy, Sears, ect.). For example, let’s say you sell an item at $1,000 on day 1. Then on day 2, Sears starts selling the item for $900 and Amazon matches it. The customer you sold the item to for $1,000 will likely decide that $100 is worth returning the item to Amazon to buy it at Sears, which causes a headache on your part.

eBay

With eBay, returns are minimal. They do happen, but not near as often as with Amazon. That’s because you control the customer service, so there is no set return policy across all sellers on eBay. Also, people are far less likely to try to return an item due to shipping prices.

Return Process

  1. There are two ways for a customer to initiate a return on eBay. First, they could contact you and let you know their unhappy with the item. Second, they could open a case. With most people who want to return an item, they usually open a case. If the customer contacts you directly about a return, that’s awesome! That means the return will likely go significantly smoother.
  2. Let’s say the customer opens a case saying the product is not as described. That is by far the most common reason to open a case, even if the product is exactly as you described. Regardless, they will open the case. Now you have the opportunity to respond and ask for pictures of the item.
  3. If the product looks like you sent it and you have a return policy, accept the return within the open case. If it does not look like you sent it and it was damaged by the shipping company, contact them and accept the return. If the product looks like the customer damaged it, you may need to fight it. Unfortunately, eBay is notorious in defending the buyer, so I cannot guarantee you will win. The best line of defense is to take good pictures of the product for the listing and noting any defects.
  4. Once you receive the return and inspect it to make sure it was not damaged by the customer, send them their money back via Paypal.
  5. Now, relist the item as Used or New, depending on its condition, and try to sell it again.

Avoiding Returns
It’s much easier to avoid returns with eBay, than Amazon. First, make sure you state that you do not accept returns. In my experience, this has not affected my sales at all. Next, describe your item completely, including all defects and shortcomings of the item. It may sound like you are describing your item as a piece of crap, but it will save you time in the long run. Finally, take great pictures. People look at the pictures far more often than they look at the description. So, make sure the pictures are of the actual unit and they look good.

Craigslist

With Craigslist, you shouldn’t have any returns. It’s not a regulated marketplace and there are no reasons to offer a return. However, that doesn’t mean certain customers won’t try. If they try to return an item they didn’t like, tell them that all sales are final. If they keep bugging you, simply block them (this is one reason I love Google Voice).

Avoiding Returns
Describe your item completely. Don’t lie about it or take pictures of a different item than your selling. You could actually be sued in small claims court if you knowingly sell a defective item, so just don’t do it.

Returns suck, but there’s no way to avoid them in their entirety. So, the best thing you can do is to be prepared for them. I expect 5-10% of my items will be returned on one of the above platforms, which means I expect about a 5% loss on my total profits. If you solely sell on eBay or Craigslist, your number will likely be lower. It doesn’t matter what that number is, it’s just important to expect some sort of loss in profits due to returns. That way you won’t be unprofitable when it happens.

Happy reselling!

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