Amazon Institutes New Returns Fee To Reduce Shipping Costs

In what appears to be another cost-cutting move, The Information is reporting that Amazon has instituted a new fee for some returns when using a UPS Store.

The report suggests that the company is imposing this fee on returns when return options at Whole Foods, Kohl’s, or Amazon Fresh locations are closer or at the same distance as a UPS Store return location.

Previously, customers could drop off non-defective or undamaged items at UPS Stores without any cost.

But, per the report, Amazon has now initiated a charge of $1.50 per return for items that are being returned for reasons such as a “change of mind” or “accidental order.” This fee will be deducted from the refund amount.

The new returns fee is aimed at “deterring customers from using UPS when they have lots of other choices, presumably as a way of reducing the cost of returns for Amazon.”

Amazon confirmed they will continue to offer at least one or more label-free, box-free return choice at no cost.“We offer convenient, easy returns to Amazon customers, with one or more options for label-free, box-free returns at no cost,” said Lauren Samaha, Amazon Spokesperson.

Amazon Blinks To Curb Costs

The online retail giant seems to have introduced this new return fee as part of its ongoing efforts to reduce shipping expenses.

Two weeks ago, we reported the company was marking some products with labels warning customers, “Frequently returned item: Check the product details and customer reviews to learn more about this item.”

Sellers on other marketplaces such as eBay and Etsy will be happy to see Amazon curb its free returns policy, even if it’s only slightly.

Small business sellers have faced challenges as they were forced to emulate the scale of Amazon, despite being micro- or small businesses that couldn’t easily sustain such expensive and liberal return policies.

While this change in policy is minor in nature right now, any small amount that helps level the playing field will be appreciated by small business sellers.

This new policy will also help third-party sellers on Amazon that have had to deal with massive returns from customers buying items on “trial” and then just returning them. Especially fashion sellers face this issue where a buyer might buy two sizes and return one that doesn’t fit.

Update: 4/11/2023 to include a statement by an Amazon spokesperson regarding this report.

Richard Meldner

Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.

To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.