Insights

How FBM Fulfilled by Merchant Returns and Refunds Work

This video discusses issues and best practices related to returns for Amazon sellers using Fulfilled by Merchant (FBM). A common concern highlighted is Amazon’s policy of refunding customers without requiring them to return items, which can lead to buyer abuse. Many sellers report cases where refunds are issued, but products are never returned, resulting in financial losses for the seller.

Amazon automatically authorizes most U.S. return requests that fall within their policy, and the system now mandates prepaid return labels. Upon the first scan of the returned item at the carrier’s location, Amazon processes the refund for the customer. However, this policy creates potential for fraud, such as customers returning incorrect items or nothing at all.

To mitigate this risk, sellers are encouraged to use Amazon's prepaid return labels, as this makes them eligible for safety claims. The Seller Assurance for E-commerce Transactions (SAFE-T) allows sellers to appeal Amazon's refund decisions if the customer returns an unsellable or incorrect item. Proper documentation and filing a SAFE-T claim are essential to securing reimbursement for fraudulent returns.

This video also explains the limitations for international sellers, emphasizing the importance of having a U.S. return address or providing international return shipping labels within five days to avoid automatic refunds.

For a detailed explanation, watch the full video below, where these topics are discussed in depth.