By Shaunak Roy

One of the big reasons why Amazon has been a major crowd-puller is its no-questions-asked returns policy. Over the past few years, an increasing number of customers have been moving away from archetypal brick-and-mortar stores to Amazon thanks to it giving customers the ability to try out products in the luxury of their homes and return them in case they are unhappy. Amazon’s recent move to ban customers reminds me of storekeepers who make a billion promises just to compel you to make a purchase. They would promise to return your money if you encountered any problem. Yet, if you would try to return the product, they would give you a billion reasons why it could not be returned. Amazon has faced intense heat over the past few days for its crackdown on customers for ‘excessive returns’. From a business perspective, this sounds fair. Why should you allow customers to return their products? How would you run your business if customers did this all the time? But wouldn’t you expect Amazon to have figured all this out before introducing its no-questions-asked returns policy? Then why ban customers now?

No intimation

Many customers say they were not intimated before the termination of their accounts. That’s the gravest violation of all. Period. Customers who have been found to return products excessively should have been warned by the company first.

One return for every 12 purchases. Sure, that’s quite a lot of returns, but it certainly does not justify Amazon blacklisting the customer. A fair warning would have done a world of good for both parties. Amazon’s General Returns Policy has detailed instructions regarding returns:

It is interesting to note that there is no clause on the volume of returns. And although a customer may return a product, Amazon has validated the return before a payment refund can be initiated. Therefore, whether you return one product or 100 is irrelevant. In fact, blacklisting a customer for ‘excessive’ returns sounds like a classic bait-and-switch approach.

Vague definition

So far, Amazon has been dealing in vague terms like ‘excessive,’ ‘multiple,’ ‘some’.

https://twitter.com/cmbochner/status/986270368947044352

If the company wants to forcefully suspend the accounts of some of its customers, it must clearly define the exact reasons for such action. Using ambiguous terms such as ‘excessive’ is meaningless! If Amazon were to define the number of returns it considers acceptable, this would ensure customers are carefully considering their purchases to avoid the possibility of having to return the product.

A league of hesitant customers

Amazon could soon encounter a league of hesitant customers. Buyer’s remorse is not so easy to tackle. Even brick-and-mortar stores with excellent return policies face the problem. Customers often change their mind about their purchases, as is their right to. But how can a store, online or otherwise, penalise customers for exercising their choice? I wouldn’t be surprised if a large number of Amazon customers now question their decision to buy from the site at the risk of someday being banned.

Why the sudden change?

There is no doubt that a customer must respect and abide by the privileges offered to it by any company. Customers abusing such policies can prove detrimental to small stores.

But Amazon is no small store. It is among the most powerful companies in the world and built itself up thanks to its customer centricity. It certainly had the financial muscle to tackle the vast number of returns and hence initiated such a strategy to begin with. It was one of the defining aspects of Amazon, thanks to which it enjoyed a marked competitive advantage over its rivals. The strategy was brilliant: consumers felt reassured that they could return a product, no questions asked, and so bought freely.

“We want everyone to be able to use Amazon, but there are rare occasions where someone abuses our service over an extended period of time. We never take these decisions lightly, but with over 300 million customers around the world, we take action when appropriate to protect the experience for all our customers,” an Amazon representative said about the company’s decision to ban customers for ‘excessive’ returns. Fair enough. But one does wonder why Amazon allowed such ‘abuse’ to go on for such a long period. Why take such harsh anti-customer action when a simple update of the returns policy would suffice?

Shaunak Roy is an Assistant Professor of Management at St. Xavier’s College (Autonomous), Kolkata, and is the principal author of ‘Visual Merchandizing as an Antecedent to Impulse Buying Behaviour’.