High Return Rate Processing Fee Update for Amazon Sellers

Amazon has announced some changes to the returns processing fee, which is expected to impact sellers on the platform who experience high return rates.

The Updated Amazon Return Rate Processing Fee

Starting June 1st, 2024, the existing updated returns processing fee is scheduled to go into effect for products that experience high return rates—except apparel and shoes.

Originally announced as part of the 2024 US fee changes, these changes are expected to occur after the close of every three months. For instance, returns of units shipped in June will be charged in the following September.

In order to better understand both the returns and return rates, while also identifying actions new and old Amazon sellers can take to limit the risk of incurring these unfortunate fees, Amazon has made the following improvements to the Return Insights Dashboard (located on the FBA Returns page):

  • Number of returned units and return rate percentages used to calculate the fee
  • Minimum return rate thresholds above which fees are charged
  • Number of returned units above the threshold for which fees are charged 

To access the Return Insights dashboard, go to the FBA Returns page

FBA returns page

The updated returns processing fee looks at product returns across three months starting with the month the product shipped and ending two calendar months later. For example, for products shipped in June, returns will be tracked through June, July, and August. The fee will only be charged if the total number of returns for the products shipped in that month exceeds the threshold set for the specific product’s fee category, which is now published on the Returns processing fee page. If the returns threshold is exceeded, the returns fee will apply to each returned unit above the threshold.

Return rate threshold

For products that ship less than 25 units in a month, the updated returns processing fee is not applied for that month. Additionally, for products enrolled in the New Selection Program, Amazon will waive the fee for the first 20 returned units that exceed the return rate threshold. 

For detailed information on fee structure and rates, return rates calculation, thresholds, and exemptions, go to 2024 returns processing fee changes.

Conclusion

The updated returns processing fee on Amazon is a great reminder to minimize—when possible—your product returns. By using the new Returns Insight dashboard—or our Inventory Management tool that notifies you of any potential quality issues—you can look at incredibly valuable data that will allow you to easily identify products with high return rates and take appropriate actions to reduce the damage to your e-commerce business.

Also, remember to carefully and proactively manage your returns to avoid these processing fees where possible. In addition to saving you money, you’ll also improve your brand’s overall profitability on the Amazon marketplace.

FAQs

Frequently Asked Questions

The expanded returns processing fee will apply to categories other than apparel and shoes starting June 1, 2024, and it will only apply to products with the highest return rates relative to other products in their category. This fee will address the operational costs of products with high returns and reduce waste. We will share the specific return rate threshold for each product category ahead of this fee’s June 1, 2024 rollout.

Effective May 1, 2024, you can review your return rate on the FBA Customer Returns Dashboard, updated weekly as returns come in. This allows you to monitor your returns and return rates. The minimum thresholds for each category will also be published on May 1, 2024. Your return fee summary will appear after charges are made using the tools available, such as SKU Economics and your monthly payment report.

No. The returns processing fee calculation differs from the one used for the “frequently returned” badge. The fee only applies to products with the highest return rates relative to other products in their category.

“Highest returns rate” refers to items that rank in their category’s highest return rates. In May 2024, the return rate threshold for each category will be published ahead of the June 1, 2024 rollout of this fee.

The thresholds for the return rates for the returns processing fees will not change based on the time of year but may be adjusted with the following annual fee change. The return rate threshold applied to a particular month’s high return rate fee is based on your product’s fee category at the end of the three-month measurement period.

You can review your return rate on the FBA Returns page, which is updated three times a week and allows you to monitor your returns and return rates. The minimum thresholds for each category have also been published.

No. The return processing fee calculation, effective as of June 1, 2024, differs from the one used for the “frequently returned” badge. The fee only applies to products with the highest return rates relative to other products in their category. For more information, go to 2024 returns processing fee changes.

The fee applies only to physically returned units. For more information on other conditions that might waive the fee, go to 2024 returns processing fee changes.

Effective May 1, 2024, you can review your product’s return rate on the FBA Returns page, which is updated thrice a week. This allows you to monitor your returns and rates for a month’s shipped units.

You can also view your historic return rates for a particular product to assess whether your return rate has been above or below the threshold and take corrective actions to lower your product’s return rates.

For returns from a particular month, a return processing fee will be charged to your account between the 7th and 15th day of the third subsequent month. For example, for units shipped in June that are returned and are subject to the fee, the fee will be charged between September 7 and 15.

The Manage Your Payments tool shows the return processing fees charged per ASIN. You can also download a report from the Amazon Fulfillment Reports section of Seller Central, which provides a detailed breakdown of the number of shipped units, returned units, returned units that exceeded the threshold, and units charged. The SKU Economics tool lets you view your return fee at the SKU level.

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Copywriter

A dedicated copywriter with nearly 4 years of experience, Josh works with Amazon sellers and helps his clients succeed on the platform.

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