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To many shoppers, Amazon is the ultimate destination. It sells everything and anything, and reliably offers free two-day shipping — assuming you’re one of the 100 million-plus subscribers to its Prime service. Amazon also easily stores your credit card and shipping information (as well as that of the dozen other people who probably piggyback off your Prime account).
But Amazon isn’t quite the utopia shoppers envision: According to the Wall Street Journal, the site actually terminates the accounts of shoppers who return too many items, often without giving them any warning. An Amazon spokesperson told the Journal that “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.”
Amazon joins a slew of retailers that ban customers who return things too often. In March, Sephora told Racked it uses a service called The Retail Equation, or TRE, which tracks customer returns, and based on this data, Sephora can ban shoppers whose return record seems problematic. Other stores that use TRE include Best Buy, Home Depot, Victoria’s Secret, and J.C. Penney.
Amazon, on the other hand, uses in-house methods to determine who should be banned. Former Amazon managers detailed to the Journal how the site bans shoppers: Terminated accounts are flagged via an Amazon algorithm but are also reviewed by someone on staff. Typically, terminated accounts are the ones that “cause headaches for Amazon.” Accounts can be flagged if too many refunds are requested, or if a shopper sends back the wrong item. Amazon will also look at the reasons other customers returned a given item, and if a majority of those reasons are different from yours, that can flag the algorithm.
“If your behavior is consistently outside the norm, you’re not really the kind of customer they want,” former Amazon manager James Thomson said.
Some Amazon shoppers, though, say this system isn’t entirely accurate. Nir Nissim, an Amazon user living in Israel, told the Journal he received an email in March that his account had been shut down abruptly, and a representative told him it was because of his return activity. Nissim said he’d only returned one item in the past year. Only after he contacted Amazon for almost two weeks straight did the company reinstate his account. Nissim’s story is hardly a one-off; the Journal spoke to multiple shoppers who felt they had been flagged unfairly by the algorithm.
Perhaps the most alarming part to shoppers is that Amazon can close their accounts without notifying them first (in a statement to Racked, an Amazon spokesperson says that “if a customer believes we’ve made an error, we encourage them to contact us directly so we can review their account and take appropriate action”). This is most upsetting to those who have Amazon gift cards: In 2016, the Guardian spoke with several users who were banned from Amazon and had lost hundreds of dollars in gift vouchers. (Racked reached out to Amazon for a statement on its official policy about terminated accounts and gift cards.)
“Of course, Amazon can refuse to serve whom it likes, but surely it cannot legally keep gift card balances and other purchased goods which have already been paid for by the customer — despite what any potentially unfair small print might say?” a computer programmer who was banned from Amazon after returning 37 of the 343 items he bought on Amazon told the Guardian.
While this is every shopper’s nightmare, Amazon is not coming out of left field. According to TRE, return fraud and abuse costs retailers in the US up to $17.6 billion in losses. Amazon nets about $178 billion in annual revenue, but half of its sales come from Amazon Marketplace, a hub for small-business owners who are taking the hit of returns, both legitimate and fraudulent.
Other companies have recently changed their decades-long return policy because of shoppers who take advantage of the system. In February, L.L. Bean killed its no-receipt-needed lifetime return policy because of shoppers who used it as a “lifetime product replacement program,” L.L. Bean executive chair Shawn Gorman told Racked. In 2015, Bed Bath & Beyond started deducting 20 percent from returns that didn’t have a receipt, turning away from how the company was previously issuing full refunds for decades.
Should shoppers be punished for partaking in an ecosystem that Amazon helped create? At the Journal, commenters sounded off about shoppers who abuse the returns system.
“I am sorry, but I am with Amazon here,” one commenter writes. “They provide great service and I have seen people abuse their policies many times. They have business to protect. Sorry spoiled kids. Your account is closed, Thanks God!”
An opposing reader pointed out that “Amazon also encourages people to buy things sight unseen and effortlessly return things that don’t fit, don’t look or perform as advertised, or arrive damaged or previously used.” Another comment read that “Amazon is the one encouraging customers to mindlessly purchase items in the first place! It’s their business model — ‘one-click’ ordering, wi-fi-enabled reorder buttons, ‘subscribe-and-save’ plans, Amazon Prime. It takes a lot of chutzpah for them to then turn around and blame the customer for not being careful enough.”
Update: May 23, 2018, 12:29 p.m.
This article has been updated to include comment from Amazon.