Watch out for returns rampage this Amazon Prime Day

This Amazon Prime Day, users will be trawling through the ecommerce marketplace looking for the best deals for their baskets. Once the boxes are packaged, delivered, and unwrapped, however, the next, post-Prime stage begins: the dreaded wave of returns.

Small businesses who are selling on Amazon look forward to Prime Day each year. It’s an ideal opportunity to offer competitive promotions that entice new customers.

However, large-scale discounts can also increase the risk of shoppers buying a product simply because it’s on sale. This can lead to buyer regret; and a surge in returns for SMEs.

Why are there more returns after Amazon Prime Day?

Prime Day is one of the most anticipated online sales events of the year. Each year, news sites become flooded with discounts and deals as shoppers seek out the cheapest toothbrushes and phone chargers they can find.

After the dust settles, however, comes the buyer’s remorse. Shoppers might realise it’s something they don’t need. Maybe they misread the product description, or slipped on the keypad and pressed the wrong t-shirt size. Cue the avalanche of requests for returns.

High demand on Prime Day can also lead to stock shortages, causing items to be substituted or backordered. Plus, a significant portion of Prime sales are gifts. When the actual product arrives, recipients may ask for the receipt.

Amazon wants to make the purchasing experience as simple as possible for the buyer, so it has designed a three-click return process that makes returning items effortless. Unfortunately, this can lead to a larger number of returns than might have been expected.

Payment reversal warning

Returns have a big impact on sellers for a number of reasons, from inventory management to customer ratings. Worst is the impact on finances. When a buyer requests a refund it often results in a payment reversal, where the funds are returned to the shopper’s bank.

Whether chargebacks (if the buyer disputes the transaction) or refunds (if the buyer dislikes the product received), payment reversals are a pain for small sellers. There’s nothing worse than having to return your profits after the sale has been made.

Chargebacks are also often accompanied by processing fees, charged by card merchants. This can be as much as £20 per transaction.

On Amazon Prime Day, payment reversals tend to cause extra damage to small businesses, who could see huge revenues wiped from their balance sheets.

According to Amazon, the average Prime Day order increased by just under 50% in the UK last year. This year, buyers are expected to spend a record $14bn globally.

Monica Eaton, founder and CEO of Chargebacks911, has warned sellers they will see “an increase in inquiries and complaints during a major sales event like Prime Day.”

“If they aren’t prepared to meet the surge in calls and emails, it may spell trouble,” she adds.

How to prepare for Amazon Return Day

This year, over 100,000 small businesses will be participating in Prime Day. Here are three tips they can take to prepare their storefront for the post-Prime returns rampage:

1. Check customer service channels

If a customer is unsatisfied with their purchase, Amazon handles the return/refund process. Sellers are responsible for product enquiries, however, which means shop owners should have an accessible, speedy customer service channel to answer timely questions.

Keep an eye on your email or other messaging platforms to offer immediate solutions right away. Consider upgrading your business phone number so it includes a virtual receptionist.

With a virtual receptionist, you’ll be able to perform your everyday work tasks without missing a single phone call. Plus, you’ll project a professional image to customers.

2. Gather feedback from customers

Every mistake is a learning opportunity. View any increase in returns this Prime Day as a chance to gather customer feedback on what their issue was with the product or service.

Once a return notification is received, contact the customer to apologise for their dissatisfaction and ask how you might improve their purchasing experience next time round.

Offering a platform for the customer to air their concerns could also encourage them not to leave negative feedback, as they will feel less aggrieved after having been listened to.

Similarly, prepare a plan for how to respond to negative feedback. If a customer leaves a bad review, reach out to them immediately with a constructive and empathetic tone.

3. Refine your returns policy

In the long-term, it is always a smart idea to have a fair and transparent returns policy for customers. This lets shoppers know under what circumstances (besides those which are legally required) you will accept returns and offer refunds, exchanges, or store credit.

Having a returns policy provides a layer of protection for businesses. In the event that a customer tries to unfairly demand a chargeback or refund, you can point to the policy to more easily defend your position and explain why you will, or will not, accept a return.

Don’t forget: returns have rules. Find out more about consumer protection laws on refunds and how they might shape your returns policy.