Returns on Amazon are free and easy for shoppers, but they’re risky and expensive for the small businesses that sell a majority of the goods on the world’s biggest e-commerce site. Returns have driven some sellers to exit the popular Fulfillment by Amazon program, while others told CNBC they’d like to leave the platform altogether.
At the heart of the problem is a big rise in returns fraud, which has led to customers mistakenly receiving used products when they ordered something new. In two particularly egregious examples involving baby products described to CNBC, Amazon sent customers used diapers and a chiller with someone else’s rotten breastmilk inside.
“I really don’t think that consumers understand how many small businesses are on Amazon and how their return habits affect small businesses and families like mine,” said Rachelle Baron, owner of Beau and Belle Littles, which sells reusable swim diapers on Amazon.
Baron said her business tanked after a return incident with Amazon. The e-commerce platform shipped soiled swim diapers to customers after the used baby products had been returned to Amazon, Baron said.
“There was actually two diapers that were sent out that were poopy,” she said.
In 2024, nearly 14% of all U.S. retail returns were fraudulent, up from 5% in 2018, according to a report by the National Retail Federation. In total, the report found that returns cost retailers $890 billion in 2024.
Amazon started charging sellers in its fulfillment program (FBA) a new fee in June 2024 for items that exceed certain return rate thresholds. Sellers who sign up for FBA rely on Amazon for logistics, including shipping, packing and returns.
In September, a couple months after the fee went into effect, e-commerce group Helium 10 saw return rates for U.S. Amazon sellers drop nearly 5%.
“It’s forcing the seller to have higher quality listings and higher quality products,” said Helium 10 General Manager Zoe Lu.
Amazon has also started adding a warning label to some “frequently returned items,” which could be contributing to the dip.
Source: https://www.cnbc.com/2025/06/21/how-broken-amazon-returns-are-driving-sellers-to-leave-the-platform.html