Amazon’s Plan To Fix Its Multi-Billion Dollar Returns Problem

While Amazon’s dominance grows, so does its number of returns, and that’s causing a massive problem for the e-commerce giant and the planet. A National Retail Federation survey found that across all retail, a record $761 billion of merchandise was returned last year. Returns from retailers created an estimated 5.8 billion pounds of landfill waste, according to solution provider Optoro. Now, Amazon has committed to a “goal of zero product disposal,” while still making returns increasingly free and easy, from boxless returns to simply telling customers to keep some items. CNBC’s Katie Schoolov wanted to find out how Amazon plans to solve the problem, so she sat down with Cherris Armour, Amazon’s head of North American returns, for her first ever public interview.

Chapters
00:00 -- Intro
2:02 -- Good for business, bad for the planet
5:08 -- Donation, liquidation, resale
9:59 -- Cutting costly reverse logistics
13:16 -- Disincentivizing returns

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online

#CNBC

Amazon’s Plan To Fix Its Multi-Billion Dollar Returns Problem

[loki]

Frankly, making the returns easy and remove the hassle for the customer and the cost is absolute key to Amazons success. I wouldn't buy even half the things I buy on Amazon if I wasn't able to return it if it was something wrong with it etc.
Take shoes or clothes for example, often you don't know how they fit until you have tried them. Then there is electronics etc.

[Btt]

They need a review process where they verify listings. For example if returns for a particular item reach a certain percentage then Amazon should review the listing to ascertain the issue.

[JayPimen]

Amazon should make a used category on their website, that’s marked down 50% but can no longer be returned if bought, as is🤔

[TristanBWV]

It's not "consumerism", it's Amazon reselling third-rate products, often under their own name, as well as providing a sales platform for shady companies to charge you for garbage on a massive scale in hopes you won't bother to try and return it.

[danstenis]

The best way to lower returns is to directly deal with why people return in the first place. People return purchased goods because it is not what they thought the product would be. To prevent this from happening the item photos has to be good enough that people can see from all directions and angles and the dimensions of the product has to be very well label. Then the description has to describe everything about the features and its uses. I find most products on Amazon are lacking complete descriptions. And even when it is label it is often wrong. If Amazon just invests more money in product listing, the number of returns would naturally be much lower and dealable.

[GlenisRetiredNZ]

In the past I was an Amazon seller. The products I sold were custom made and drop-shipped from the printer. If for any reason the customer didn't like the product or changed their mind or overspent and needed a refund, that money was taken from my Amazon earnings. It was impractical for the item to be sent to me as I don't live in the US and there were often personalized. This is going back a few years and the return policy is even more lenient. For a small business person, working on small profit margins a high return rate can destroy their business. Amazon doesn't lose any money - the seller does.

[Ausf]

I wondered how they could possibly do "zero waste" and then I heard the magic word, donating. They will donate their previous waste items, and recipient of said donation will then throw it away. That's just waste with extra steps.

[Is_it_rwanda]

the most environmentally responsible thing I did this year was to cancel my amazon subscription. I canceled it when I noticed that in everything that I ever ordered, I was constantly disappointed by the quality. They take advantage of the online platform to sell cheap low quality garbage, sometimes selling worse quality versions of things you could buy from brick and mortar stores under the same brand name. Their "returns problem" is entirely their own fault.

[Arcticwhir]

I think they're overlooking one aspect, make it so that the customer knows exactly what they're getting so they dont think about returning. More information of the product, more images, videos etc.

[darthrex]

Amazon delivery driver, currently delivering packages as I watch this video. What's insane to me is that everyday I'll usually have one to five packages that are being returned to the warehouse, and there's 200 drivers that all experience the same thing on a daily basis. We're talking about returns but it surprises me that they didn't talk about the fact that customers cancel orders and the orders are still shipped processed and loaded into Vans despite having been canceled before my route even starts. It's insane how much waste this company produces and how little everyone gives a damn except the highest paid people, who paint a facade as if they are taking every step to do anything about the absolute devastating circumstances pertaining to waste and returns

[jesdadotcom]

Returns are an inherent part of online shopping. Merchandise doesn't always look as advertised, doesn't fit perfectly, or doesn't function as intended. I find this to be far less of an issue with things I inspect and buy in person at a brick and mortar store.

[randomrandomness]

I'm a seller on AMZ until the end of this year when I will be moving back to Ebay. The whole 'you can keep it' attitude gets paid for by sellers, not out of AMZ's ever bulging coffers. Ebay does not have this problem. The non-profits in the article are the AMZ sellers!

[ricnyc]

This must be a joke: the companies know the percentage of products that will be returned. Guess who pays for that... Yes: you that don't return anything. The price we pay for products includes the percentage that will be returned. And Amazon profits twice from the same products when it resells them in pallets.

[drmodestoesq]

Just have box that you can click that say "AS IS No Returns." And if you click that box you get the item cheaper.
That would stop returns in a hurry.

[JerseyGirl]

Purchased disposable briefs for my husband who passed away a couple of days after receiving package. I tried to return, was told to keep and was promptly issued a full refund. I donated them to a local medical supply charity since the box was unopened.

[patriciahawks]

I very rarely return anything. However, I like knowing that I can if necessary. Before I buy anything I do my homework by researching the product to make sure it’s what I want and need.

[HiThere]

I wouldn’t return anything if listings were accurate. When a description and pictures show something _completely_ different from the cheap Chinese-made crap that I actually get, yeah it’ll be returned immediately.

[thinkofsomethinglater]

I actually work at an Amazon return center it’s a crazy amount of stuff that just gets disregarded

[benamerdamino]

Stewie Griffin said it way back before this video in family guy.. “Most of what America is now is just boxes going back and forth “ 😄

[rainbowsunshinekitty]

Kudos to the returns lady on evading questions like a pro!