FBA Profits at Risk: The Amazon FBA Holiday Return Trap
The Black November and Santa December sales high is addictive. Dashboard is green, inventory is moving, and the "Year-over-Year" growth looks spectacular. But if you've been in the FBA game long enough, you know that a significant percentage of those profits is at Risk.
The Threat has a name: Extended Holiday Returns policy
From Amazon Policies
The December 25th Illusion
Payouts are landing on your bank account in November and December, and you perceive these as realized gains, safely locked in your vault. They are not. Every Dollar, Euro or Pound generated in this period is technically "at risk".
January: The Margin Erosion
This is where your margins face a surgical strike. The Extended Holiday Return policy creates a massive imbalance in the seller-customer relationship. Consider the edge case: a product purchased on November 1st remains eligible for a full reimbursement until January 31st. This can facilitate "wardrobing" and seasonal fraud. January is the month where your Q4 margins are retroactively eroded by both indecision and bad actors.
The 45-Day Shipping Limbo
Once a return is authorized, the customer have up to 30 days, often extended to 45 days to physically ship the item back. If a buyer initiates a return on January 31st, that product might not even leave their living room until mid-March.
The Long Way Home: Return and Removal
When the item finally reaches an Amazon Fulfillment Center, it goes through Evaluation. If the item is deemed "Unsellable," the final hurdle is the Removal Order by return to your warehouse (or partners). While Amazon quotes a 14-day turnaround, remote EU warehouses can prolong this timing. You could be opening a Removal Shipment in April for stock you sold in November.
The Reclamation: Assessing the Damage
Opening those removal boxes is where the real forensic work begins. It is no longer about the sale; it is about capital recovery. You must process each unit to spot potential fraud—comparing serial numbers and checking for swapped parts—to initiate reimbursement claims against Amazon when their system failed you.
Beyond auditing, you face a strategic decision for every unit:
- Can it be refurbished, repackaged, and resent to FBA?
- Should it be liquidated on secondary platforms (eBay, Back Market) to recover cash?
- Or is it a manufacturing defect for which you have specific agreements with the producer?
This "regeneration" phase is what separates profitable operations from those that let their margins bleed out in the warehouse.
Regenerating Value from Returns protects your Margins
About Me
I specialize in the "Dark Side" of FBA: Returns and Removals. While most focus on scaling sales, I focus on protecting the bottom line. My work helps high-volume sellers to gain control on FBA-reverse in-house operations, while claiming reimbursement on the anomalies.
Want to empower your team with the right tool? Go Here
Return Season is real
