NEW Amazon FBA Programs: Repacking & Refurbishment

In a very concerning turn of events this past week, Amazon quietly made FBA repacking mandatory for all returns. Previously, this feature was optional for sellers. In addition, they are launching an opt-out program for product refurbishment.

Why is this concerning?

Amazon is now taking the freedom away from sellers to manage their returns and determine what products are resellable, if any. Many categories should not have products resold no matter what. Health & Beauty comes immediately to mind, as no customer wants an open or damaged product that will go on or in their body. Wearables are another category that will raise flags.

So, what’s the difference between repacking & refurbishment?

They sound very similar but it comes down to repacked products may only have their outer packaging replaced, whereas refurbished products may have more work done. There are more nuances to consider as well.

FBA Repacking Service

This service is a next step after FBA workers have determined a customer return is still in sellable/like new condition. FBA will replace any packaging as required for these returned items. For example, if your product is typically bubble wrapped or in a poly bag, Amazon will replace those before putting the returned item back into circulation. However, if your item is typically in a branded bag or box, Amazon will only be able to replace with a generic bag or box.

Technically this service also applies to retail as well, which means vendor and Amazon branded products. Vendors have never really had control over this, as once the product is in Amazon’s hands they own it. However a strong Customer Response Monitoring strategy can help mitigate problems that may arise.

Pros

  • Prevent complaints about damaged outer packing
  • Prevent lost parts
  • Fragile items stay protected with new packaging

Cons

  • Replacement packaging will be generic, which has potential to lead to authenticity complaints
  • Generic repackaging may not have the Transparency QR codes, as those are in the hands of the seller
  • Amazon FBA is not always the best judge sellable condition
  • May actually increase used sold as new complaints instead of decrease

How do I participate in FBA repacking?

Participation in this program is mandatory for FBA sellers based on category, which is a bit frustrating. It is nice to know Amazon will make sure your products appear in new condition when they are shipped back to customers, but many sellers are annoyed that this is not an optional service. If you are unsure if your category is enrolled in mandatory repacking, check Seller Central’s list.

How do I opt out of FBA repacking?

Technically you don’t, but there is a work around. Repacking only applies to customer returns that are being put back into circulation. You can disable the ability to have your customer returns put back into circulation, which instead automatically labels all returned items as unfulfillable. From there you have two options:

  1. Removal Orders
    • Costs $0.50 per unit
    • Returned inventory is shipped back to you
      • Takes 14 days to process, plus additional ship time
    • You inspect inventory & decide if it can go back into circulation
      • You conduct any repackaging/refurbishment needed
      • Items in brand new condition can be shipped on your next PO as is
  2. Dispose of Inventory
    • Costs $0.15 per unit
    • Amazon takes the initiative to remove inventory
      • Inventory can be thrown out/destroyed
      • Inventory can also be resold by amazon as a warehouse deal on your same ASIN

You can also automate returnless refunds. The pros being that no questionable inventory to worry about getting restocked, but the con being you are now out the inventory and money.

You’ll need to weigh the costs and determine which route you want to take. If you have a history of safety complaints due to customers receiving used items, disabling returns for sale is a good idea to protect your account.

FBA Refurbishment Service

As mentioned above, the refurbishment program goes beyond just replacing packaging. In most instances, Amazon will just be attempting to repackage your product in like new condition, so resealing any broken seals, taping boxes, tying up cables, etc. Refurbishing also includes the replacement of corrugated boxes, which are not covered by repackaging. Amazon may also clean up your products, which can include simple things like removing excess tape and labels or more complicated things like steaming and removing stains/odors. Obviously, there’s some serious cause for concern here.

Pros

  • Returned items are supposed to put into like new condition
  • Replacement of compromised corrugated boxes protects product

Cons

  • Increased risk of used sold as new complaints
  • Increased risk of authenticity complaints
  • Health & safety concerns about cleaned products

How do I participate in FBA refurbishment?

By default, sellers in participating categories are automatically enrolled. If this is a service you want to participate in, you do not need to take any action unless you have previously opted out. If that is the case, you can change your settings.

How do I opt out of FBA refurbishment?

Opting out is luckily very easy. Just go to your settings and click disable. If you aren’t sure if your category has this feature, you can also view the current list from the settings page. You have the option of completely disabling your participation, or only knocking out certain product categories.

What should sellers do?

Honestly, it depends on your position. In almost all cases sellers are better off opting out of refurbishment, and professionally that is ours and our industry peers’ advice. Even if you are somewhat interested in this service, Team DBW would advise to at least disable anything that falls under health, beauty, personal care or could be considered a wearable.

As far as disabling the ability for returned product to go back into circulation, there are multiple factors to consider starting with the frequency and quantity of your customer returns. There is also the very real possibility that this choice will quietly be taken from you as well, leaving you with just the choice to make all refunds returnless.

Contact us to discuss your options and make the choice that’s best for you. Our team can also help facilitate your inventory management and tracking to mitigate any problems or concerns related to these changes.


Caiti Inc

Caiti Inc is the Analytics Lead at Digital Brandworks, a digital consultancy that provides customized solutions for improving marketplace performance on Amazon and beyond.

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