Amazon changes policy on reverse logistics

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Global e-commerce retailer Amazon has introduced a new policy, which has recently come into effect, changing the way in which returns costs are handled.

Previously, if additional costs were incurred from returns they would be absorbed by Amazon. Now, the burden of additional logistical costs falls upon the seller. This only applies to orders that are fulfilled by the seller and does not apply to sellers using the Fulfilment by Amazon (FBA) service.

Starting from 14 January, if an item is returned in such a way that incurs fees from a carrier, it is up to the seller to pay. This could have an impact on carriers that currently fulfil Amazon orders.

Firstly, the policy change obviously makes FBA more attractive to sellers as an alternative to other fulfilment options. Without having to run the risk of facing unexpected costs when facilitating returns, sellers might be able to keep their costs down, or at least make them more predictable.

Secondly, this may encourage sellers to seek less expensive options when choosing a carrier. With logistics costs already rising due to factors like the rising cost of fuel and energy, sellers may want to pay less for deliveries and returns if they now have to pay additional fees themselves as part of the returns process.

Despite the fact this change only directly affects Amazon and its sellers, it would not be surprising if carriers were to be impacted indirectly as a result.

The role of reverse logistics in supply chains is not to be underestimated. ParcelHero’s Head of Consumer Research, David Jinks, said that “around £1.5 billion of Christmas orders were returned” in the weeks following the holiday season. This is a 25% increase on the previous year, ParcelHero says.

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