A 9,000-member strong Amazon India seller’s forum has pulled back sponsored ads from the e-commerce portal over the last two days to protest against what it believes are the company’s weak return policies. The sponsored ads help sellers promote their products in Amazon’s search results.
The eCommerce Sellers Association of India (ECSAI) plans to continue the strike for at least another day while awaiting a solution from the Jeff Bezos-led company.
The group alleges that its members are bleeding because Amazon has been approving fake return requests and making them pay for reverse logistics. The sellers also say that they are forced to bear the cost of the product that are often damaged or used.
The protest could potentially impact Amazon’s business as ECSAI has said that in the absence of the promotional ads, their members have seen a sales decline of around 10%, implying lesser commissions for the company.
Amazon India’s total seller base stands at over 225,000.
Amazon declined to comment on the loss of business but, in reply to an emailed questionnaire, a company spokesperson said: “At Amazon India, we have always believed in working backwards from seller needs, making selling on our marketplace easier & profitable for them and resolving their issues. For the recent issue in question, we are already in touch with the concerned sellers to better understand their queries and resolve them.”
Disgruntled sellers have been complaining about the high number of returns on Indian e-commerce portals for several months now. In March, a 1,000-member association called eSeller Suraksha Forum had written to Amazon founder Bezos to draw his attention to their problem.
The forum had said that Amazon was not sharing the high operational costs around returns and instead “they (Amazon) put the entire blame on us, saying we shipped fake or faulty products leading to return.”
Some ECSAI members say Amazon accepts product returns even outside of the official returns window—sometimes even after six months of purchase.
The site has also been laden with fake purchases, ECSAI alleged. In May, a 32-year-old Bengaluru woman duped the behemoth of Rs70 lakh ($108,384) by buying products and returning their copies under different names, e-mail IDs, and addresses.
More recently, in October, Delhi resident Shivam Chopra executed a Rs52 lakh scam by ordering expensive phones from the portal and asking for a refund 166 times, claiming the boxes were empty.
Amazon, the sellers said, is often lax in accepting returns and doesn’t confirm the contents of a returned package.
In some cases, the company has accepted returns without even the right packaging, thereby damaging a product in transit. “We cannot resell the product, even on discount,” an ECSAI spokesperson said. “It is an absolute scrap for us.”
Moreover, sellers claim that they do not get the promised reimbursements from Amazon. “When we file, the Amazon seller support rejects it,” an ECSAI spokesperson said. “Out of all the returns, reimbursements for only 4% will be honored by Amazon.”
The sellers suggest that Amazon must incorporate measures to confirm buyers’ authenticity and approve only legitimate return requests. Analysts also believe such checks are important for e-tailers.
“Data analytics should play a part in identifying (fake return requests)…and the Amazons and Flipkarts of the world have to figure out how they manage this and ensure that suppliers who sell on their platforms are not unduly made to incur losses,” Harish HV, a partner at Grant Thornton India LLP, told Quartz. They can use the technology to “see if there is a particular location or are there any specific customer accounts” that raise red flags.
Update: In another emailed statement, an Amazon India spokesperson added: “We have not seen any impact on our ads business. There are just handful of sellers who paused some of their campaigns for a day, out of tens of thousands of sellers and brands who leverage our advertising products. Moreover, our teams are already engaging with the concerned sellers to understand and address their issues.”