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A comment on Amazon's new refunds policy will 'crush' small businesses, outraged sellers say. Parent comment

Re:Amazon's new refunds policy will 'crush' small businesses... by dminor on Wednesday August 02, 2017 @01:03PM (#14912380)
As you found from looking into the costs of return shipping, "free" shipping can actually cost a retailer quite a bit of their margin. They are attempting to remain price competitive by not pricing in the cost of returns. Amazon has a massive advantage here over small retailers because their shipping costs are much lower due to their scale.

These sorts of shipping policies used to be the norm, until Amazon realized that people value free shipping more than an equivalent discount.

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Re:Amazon's new refunds policy will 'crush' small businesses... by gozur88 on Wednesday August 02, 2017 @01:58PM (#14912999)
People value free shipping because shipping is a scam in a lot of cases. I used to work for a company that made logistics software. One of our customers was one of those cable channels that hawks merchandise around the clock.

You would buy a ring (looks like a real diamond!), and when it arrived you realize "hey, this is just cheap costume jewelry" and send it back. They'd happily refund the price and express hopes you'd be happier with future items.

And they didn't care about the return, because they were charging you $8 (or whatever) for non-refundable shipping and only paying the shipper $1.20. So in the end they made $6.80 for selling you nothing.

[ Parent | on HN ]
Re:Amazon's new refunds policy will 'crush' small businesses... by mindslight on Wednesday August 02, 2017 @02:37PM (#14913362)
I think much of the staying power of free shipping has to do with manufacturers' price fixing. If all retailers are forced to sell at the same exact price, then the most competitive thing to do is to pay shipping out of their overhead, similar to how a brick-and-mortar store's logistics costs are covered.
[ Parent | on HN ]