The Dark Side of Amazon Returns
Easy, no-hassle returns of online purchases have been critical to Amazon’s success. The e-commerce giant does not publish returns figures, but analysts estimate the MSRP value of returns runs into billions of dollars annually. So what happens to all that returned merchandise? The answers may surprise you... read on! |
Return to Sender... Then What?
I can remember when I was very young, my mother explained to me why she preferred to shop at the Lloyd's department store in our town, and not at the newer store that had recently opened nearby. It was all about the return policy, she said. If a store makes it easy to return an item, you shop there with confidence. According to a Deloitte Retail Survey, 60 percent of shoppers consider easy returns a major factor when shopping online. So Mom was right!
Perhaps Jeff Bezos, the CEO of Amazon, received similar advice from his mother. I should have asked him that when I interviewed him for Boardwatch Magazine, back in 1996. Back then, Amazon was still "Earth's biggest bookstore," and would not begin to expand into clothing, toys, electronic gadgets and groceries for several years. But the no-hassle return policy has been a bedrock of the company since its inception in 1994. I've used it several times recently, and I'm always pleasantly surprised at how easy it is.
Amazon says "You may return most new, unopened items sold and fulfilled by Amazon within 30 days of delivery for a full refund." Most returns are free, and refunds are completed in 3-5 days after the return is received. And from what I've read, they'll take back even opened items if you decide you didn't like or want it. If you received a damaged or defective item, they will provide a replacement of that item.
And that's where things get a little sticky. Returned items may go back on the warehouse shelf to be sold again, if it is still in its original packaging and undamaged. But opened, defective, or damaged merchandise may face several different fates. Some used merchandise ends up on the Amazon Warehouse site, where used goods from third-party sellers are offered at steep discounts.
There’s also an Amazon Renewed section for electronics and appliances that have been tested and certified to “look and work like new;” a 90-day warranty is included. Only selected sellers with high satisfaction ratings are allowed to offer “Amazon Renewed” goods. In some cases, the goods are refurbished by their manufacturers; on others, the seller refurbishes things.
Some prices are lower than MSRP but don’t seem like anything to write home about. This Apple MacBook Pro 13-inch (2017) laptop is $949, for instance. But there are some good deals. This refurbished Dyson Ball Multi Floor 2 Upright Vacuum which has an MSRP of $399, is offered for just $299. And this Blendtec Total Classic Original Blender (MSRP $449) is available for $275.
Liquidate: Not Just a Setting on Your Blender
Liquidation is another path that returned goods may follow. Here, Amazon disposes of used goods that third-party sellers don’t want back. Huge quantities of returned goods, unsorted and uninspected, are sold for pennies on the dollar to companies like Liquidity Services, who says "We Sell Any Item In Any Condition, Anywhere In The World." The company buys from Amazon, Bristol-Myers Squibb, Kimberly-Clark, Honeywell, and others, and claims over $8 billion in completed transactions.
At companies like Liquidity Services, items are loosely sorted into broad categories such as “electronics,” “home décor,” “health & beauty,” with no testing or close inspection. A pallet full of such items is shrink-wrapped and auctioned off to hopeful resellers. Each pallet’s online listing includes a manifest of its contents and the MSRP of each item, which is utterly meaningless as a measure of value. A pallet with $4,000 MSRP value may sell for a bid of $200. Huge warehouses around the country exist solely for processing and reselling returned items. Here's a video of that in action.
Pallet buyers have to be as patient and optimistic as gold-panners. It’s common for up to half of a pallet to be unsellable trash that has to be thrown out, according to experienced liquidation seller Walter Blake Knoblock. He has some good advice for would-be liquidation resellers in his live-streamed video preserved on YouTube. But hardly anyone takes it, because it’s not what they want to hear.
Liquidity Services says it has 3.6 million registered buyers who spent over $600 million last year on returned or surplus stuff, including but not limited to Amazon returns. These millions of small resellers are the gold panners of what Liquidity Services calls the “reverse supply chain.”
A lot of returned items end up on eBay in auctions that may start with a 1-cent bid. They may or may not come with a return option. In many cases, eBay’s Buyer Protection program will help buyers recover their money even if the seller’s policy is “no returns.” But often the price paid for an item is not worth the expense or hassle of returning it, so buyers just toss their “bargains” in the trash.
My Own Liquidation Story Had an Unhappy Ending
I've learned personally that some of that damaged merchandise is sold on Ebay and other outlets as "New" when it's clearly not. Last year, I tried to buy a replacement controller for an electric blanket. One seller on Ebay had the exact model I needed for $30, which was the best price I could find. The item arrived in a few days, but there was a surprise. The power cord was cut in half! I knew from a previous toaster oven return experience of my own, that vendors often require customers to cut the power cord before returning, so the item cannot be resold.
Clearly this was a defective, previously returned item being passed off as new merchandise. I had to fight a few rounds with the seller, who accused ME of the dirty deed, before he agreed to refund me in full. To make things worse, I ordered the controller again (from a different Ebay seller) and that item was also dead on arrival. Ebay does have a strong refund policy as well, so at least it didn't cost me anything, except my time and frustration.
Buying used, returned merchandise is a gamble unless the goods come with a dependable company’s warranty. The lower price of such an item may not be worth the risk, especially if the price is dozens or hundreds of dollars. But sometimes it’s fun to drop $10 to $20 on an “amazing deal” just to see what you get. Even more fun (and free) is to search YouTube for “unboxing Amazon returns” and watching Millennials take the risk for you. Many “unboxing” videos get millions of views. Huh.
Your thoughts on this topic are welcome. Tell me about your experience when returning items you purchased at Amazon or other online sellers. Post your comment or question below...
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This article was posted by Bob Rankin on 4 Aug 2020
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Most recent comments on "The Dark Side of Amazon Returns"
(See all 23 comments for this article.)Posted by:
Gary
04 Aug 2020
I subsribe to a service called "Woot" (woot.com), which is an Amazon owned company. They have daily offerings which are available for the one day, but if it sells out, it's removed from the site. On rare occasions I've had to return an item, and in many cases where and item was defective when received, my account was credited for the purchase price and sometimes some monies were added to my account which could be used on future purchases.
Posted by:
Ken H
04 Aug 2020
'Buying used, returned merchandise is a gamble unless the goods come with a dependable company’s warranty.'
That's pretty much my motto.
I have never had good luck with 'taking a chance.' Nor do I find it 'fun to drop $10 to $20 on an “amazing deal” just to see what you get.'
I always check Ebay as well as Amazon, but they rarely have significantly better deals and I disagree with Larry that their return policy is better than Amazon.
I am waiting right now for an ebook I ordered on Ebay several weeks ago (why would a download link to an ebook take weeks to be 'delivered" in the first place?
I live out in the sticks 40 miles from the nearest UPS store and it isn't open even 8 hours a day (maybe 5 or 6) so Ebay's
free returns' are never free unless I can catch the UPS guy as he drives by.
I do agree with John, 'wrong title.' My as I dislike Bezos on a political/personal/privacy level, he runs a good service.
Posted by:
ardj
04 Aug 2020
Bob, I value the advice you give about computers, and I accept that you try to give good advice about value for money on related goods.
But I suggest you stop trying to promote Amazon, which does not need your help, and instead consider finding alternatives to Amazon.
I will not go into why I think Anazon is "a bad thing", but such reasons are not hard to find.
Best wishes, adj
Posted by:
Rich
04 Aug 2020
I mostly buy from Amazon because of their return policy. Over the years I have returned a few items with no hassle
A few days ago I returned a new DOA Amazon Basics
UPS unit at their expense. The refund was credited to my charge card in 2 days
Posted by:
Mike
04 Aug 2020
Buyer beware 3rd party Amazon sellers that Amazon allows to steal from customers! Bought a Canon camera from a seller in Brooklyn, NY, the camera was not as advertised, followed return instructions to mail to a PO box. I wasn't savey enough to get a tracking number and this is Amazon, no worries - wrong. The seller said he never received the package and Amazon would do nothing even though there were several other complaints for the company having denyed receiving return articles. CROOKS!
Posted by:
SharonH
04 Aug 2020
On Amazon watch out for "knock offs". This happens especially involving makeup, hair and beauty items. The formulas are not the same and people have sent in pictures showing the real thing and the cheapo one. It is often very hard to get a refund from some of these sellers.
Posted by:
Bart
04 Aug 2020
Amazon and its resellers did not invent all this. Many years ago I bought my first camera at a famous store in NYC. Close examination showed me that it had been used and I had a big hassle to swap it out for a new one. Even then, it was "grey market"- meant to be sold overseas, with no US warrantee.
I haven't had to return too many items to Amazon, but, when I have, it went ok. I bought one open box item through them, and it was fine.
Posted by:
Robert Deloyd
04 Aug 2020
Title is misleading.
I've never had a problem with Amazon when I "Returned" an item to them. I can always get someone on the phone at Amazon when I have to "Return" an item to them.
If I ever have a problem "Returning" a item or getting a refund I will consider canceling my Amazon subscription.
Posted by:
barry
04 Aug 2020
Just purchased a 20 ft flag pole on amazon. Took 15 days to get it... then the end of the pkg was missing and was sealed with tape. Opened it up and All accessories were missing. Contacted Seller and blasted them first for waiting 15 days and second for the crappy product I received. They told me they would send a new one out...another 15 days... and to keep the old one...I am still waiting. Has to be coming from china....will not do biz w/those guys again.
Posted by:
Bernie Crowley
04 Aug 2020
I have purchased two "renewed" computer towers from Amazon that have a 90 day guarantee, and both run flawlessly just like a new system, and each costs less than $150.00 with an i5 processor and 8 mg. of RAM running Windows 10. These are not stripped down machines, and a third tower is being delivered tomorrow: a gift to my grandson.
Posted by:
Mike
05 Aug 2020
On 21st July I ordered some electrical plug adapters on Amazon from a Chinese supplier. Easy to order, but..... the estimated delivery date is between 26th August and 3rd September! I live in Australia, but 7 weeks delivery time seems a bit much. It's coming via China Post.... I guess on a slow boat! Ah well, patience is a virtue my mother told me!
Posted by:
Rodney C.
05 Aug 2020
This buying frenzy will soon come to an end. The era of the cavalier shopper will soon be over. As we enter the greatest financial depression the world has ever seen, people will no longer be interested in "social media" and buying the latest useless gadget.
Massive unemployment, crashing housing prices, skyrocketing inflation - people are going broke, fast. Instead of fighting over a TV set at Walmart's black Friday sale, people will be fighting to their death in the streets over a scrap of rotting food. That's how hungry they'll be. The good times are over my friends.
Posted by:
JonS
05 Aug 2020
I purchased game cameras from Amazon. There was no owner's manual. I complained to the seller who sent a replacement. Upon examining the replacement it became apparent to me that Amazon had sent me a item that had been returned. I complained to Amazon and after awhile I was sent a new replacement. When the issue of returning the original item came up I declined to pay for shipping. When I complained that UPS drivers don't pick up returns in rural areas Amazon waived having to return. I regularly have the problem of no pick-up - for me returning items to a drop off site for mailing is a poor option as the closest is about a 45 minute drive from where I live in the country. I buy less from Amazon these days as I have so much trouble returning problem items. Its getting easier to save up shopping and going to the big city - except for the increased risk of exposure to the Corona virus.
Posted by:
Misterfish
05 Aug 2020
Well, sort of a return. I signed up for Amazon Prime and paid a not unsubstantial sum for it.
First item I ordered would not connect me with Prime, nor the second nor the third and so on, until I got smart and went over to eBay.
Amazon does not show my account as a Prime subscriber, but my bank statement sure as heck did.
I want to return the "Prime" for a refund, but every time I write, I just get a reply which avoids the question of the refund.
Amazon Prime to be avoided!
Posted by:
Rich
05 Aug 2020
Misterfish
Call them on the 800 number
Every time I have a question or problem it has always been resolved to my satisfaction
I have to relation with Amazon, just a happy customer
Posted by:
TGreer
05 Aug 2020
We have received a number of items from Amazon that were clearly returns. As far as we could tell scammers had "returned" mechandise that was subsequently resold by Amazon. The problem was the scammers had returned inferior mechandise that had the same description. The Amazon clerk didn't check the returned merchandise and just put it on the shelf to be resold. We received 10 year old hard drives instead of new drives and a dime-store wooden picture frame instead of a $200 digital photo frame.
The scammer had even put the box sticker from the digital frame on the wooden frame.
Posted by:
Phixer
06 Aug 2020
"So Mom was right!"
But of course! Does anyone have a Mom that was never right - even if it took us a few years to appreciate it?
"One seller on Ebay had the exact model I needed for $30, which was the best price I could find."
If the price of something seems too good to be true then it probably is.
Caveat Emptor
Posted by:
Debbie
07 Aug 2020
Great article! Another nice return policy that Amazon has is you can take your return to any Kohls store and Kohl’s will ship it back for free plus give you a coupon for 25% off to use that day in the store.
Posted by:
Suzanne
08 Aug 2020
Do be sure to distinguish between the Amazon “renewed” and other companies’ / manufacturers’ “refurbished”. An Apple-refurbished product has an extensive checklist with a decent warranty; Amazon “renewed” can mean practically anything, depending mostly on the seller.
Posted by:
Jack
10 Aug 2020
Just pay by credit card so you can do a forced chargeback if you get screwed.
Easy peasy!