What does a return cost you? What comes back, and what Amazon keeps

What happens when a customer returns a product?

A refund gives the sale back. The fulfilment fee is another story. When a refund goes through:

• The sale comes off your payout and goes back to the customer in full.
• The referral fee comes back from Amazon, minus an administration fee it keeps. Amazon Egypt doesn't publish that fee's amount on its fee page.
• The FBA fulfilment fee may or may not come back. Where Amazon keeps it, it's a cost on a sale that didn't happen.
• The VAT on the fees: a fee that doesn't come back doesn't bring its 14% VAT back either.
• The product itself: if it comes back sellable, it returns to your stock; if it's damaged, its cost is a loss.

So: what a refund costs = the sale given back + the fees Amazon kept.

Example: a refund on a product priced at E£500

A product in Home sold at E£500, a Standard Parcel of 0.5 kg, Fulfilled by Amazon. The customer returns it, and the fulfilment fee doesn't come back:

A refund for a sale in an earlier month

A refund comes out of the month Amazon processes it in, not the month of the sale. So this month's report can carry refunds for last month's sales: this month looks worse than it was, and last month looks better.

You can tell from the order number: a refund row whose order doesn't appear among the same month's sales.

Where to find a refund in your Date Range report

Each refund is its own row, with Refund in the type column and the original order's number in the order id column. On it:

• product sales: the sale given back, as a negative amount.
• selling fees: the referral fee Amazon returned, as a positive amount.
• fba fees: the fulfilment fee, if Amazon returned it. If it didn't, you won't find a row or a name for it anywhere in the report.
• total: the row's effect on your payout.

To see what Amazon kept, compare the refund row with the original order's row (the same order number): the difference between the referral fee you paid and the one returned is the administration fee, and a fulfilment fee you paid that didn't come back is what Amazon kept of it. The fees in the report include VAT.

Why a return rate on its own isn't enough

A return rate counts returns; it doesn't price them. Each return takes back a sale and can leave fees you paid for nothing, so a "small" return rate can still hide a profit leak.