Returns on Amazon may be convenient for consumers, but they pose a grave threat to the small businesses that represent the backbone of our economy. While shoppers enjoy the ease of returns, many sellers are being driven out of Amazon’s Fulfillment by Amazon program, with some contemplating leaving the platform altogether.
This burgeoning issue is exacerbated by a surge in return fraud, which has resulted in consumers receiving soiled and used products—an egregious breach of trust. Disturbing instances involving baby products, such as receiving diapers contaminated with waste, highlight the concerning trends in our e-commerce landscape.
“Consumers often overlook the impact of their return habits on small businesses like mine,” lamented Rachelle Baron, who runs Beau and Belle Littles, a company specializing in reusable swim diapers sold on Amazon. After her products were returned soiled, she witnessed tragic ramifications for her business. This incident serves as a cautionary tale, emphasizing the fragility of small enterprises in the face of rampant consumer overreach.
The statistics are alarming. In 2024, nearly 14% of U.S. retail returns were fraudulent, up from a mere 5% in 2018. Collectively, returns are slated to cost retailers an astounding $890 billion this year, a staggering figure that underscores the reckless consequences of unchecked consumerism.
As if that weren’t enough, Amazon has introduced a new fee for sellers in its fulfillment program, targeting those with returns exceeding certain thresholds. This move may force sellers to increase prices, a bitter pill to swallow for both sellers and consumers alike.
Industry analysts report a notable decrease in return rates after the fee’s implementation, yet this reflects an ominous shift whereby accountability falls squarely on the sellers rather than on consumers, undermining the principles of fair market practices. It is not a solution that addresses the root cause of the problem—fraud is escalating, not declining.
Inflationary Pressures
The new Amazon fees may indeed be driving prices higher. According to a survey by SmartScout, 65% of sellers acknowledged raising prices in 2024 due to these fees and returns fraud, a direct consequence of government interference in free-market dynamics.
In interviews, multiple Amazon sellers voiced their exasperation over boosting prices to offset increasing operational costs. Lorie Corlett, who sells protective cases for Hot Wheels, succinctly stated, “We’re barely scraping by.” Her frustrations illuminate the disparity between the vast ecommerce giants profiting from this system and the small businesses fighting for survival.
Mike Jelliff, another seller, shared his own struggles with Amazon’s returns system, which has become a nightmare for small businesses. His experiences show that consumers are emboldened in their fraudulent activities when accountability isn’t enforced. He has taken extreme measures, including exhaustive surveillance at his warehouse to combat this growing epidemic.
Amazon professes zero tolerance for fraudulent returns, yet the reality is that their actions have insufficient teeth. Sellers like Jelliff remain vulnerable, forced to navigate a flawed system that prioritizes convenience for consumers over the livelihood of hardworking entrepreneurs.
Mike Jelliff at his GeekStands warehouse in Tyler, Texas, on June 6, 2025. The disparity between return rates on Amazon versus other platforms is daunting.
Jacob Schatz
Destruction of Returns
Determining which returns are legitimate and which are fraudulent is not only a labor-intensive process but also inherently flawed, as experts indicate. The vast scale of operations often leads to oversight, resulting in legitimate products being destroyed.
Lisa Myers, the founder of Ceres Chill, experienced firsthand the trauma of receiving a returned product filled with someone else’s waste. Her decision to cease using Fulfillment by Amazon reflects a growing sentiment among sellers who refuse to compromise on the integrity and well-being of their customers.
Myers’s choice to move away from the Amazon platform is a testament to her commitment to product integrity, despite the lucrative advantages associated with the Amazon brand. Such sacrifices are emblematic of the challenges small businesses face against the towering presence of corporate elite.
Responsible Re-selling
Kristin Langenfeld founded GoodBuy Gear from a desire to provide quality, inspected used baby products. Her meticulous process reflects the dedication required to maintain standards in an industry oversaturated with mass-produced inefficiency.
Langenfeld’s insights touch upon the shocking reality of how returns are managed. The unnecessary destruction of goods creates a logistical nightmare and incurs detrimental environmental consequences—an indictment of a system failing to uphold sustainability and responsibility.
The data reveals that returns account for an alarming 29 million metric tons of carbon emissions annually. This is a wake-up call for our nation, urging us to consider a more responsible approach to consumption and corporate practices.
Although Amazon has made pledges to improve their return processes, the track record so far has been lackluster. In 2020, new programs aimed at re-homing returns were introduced, yet the real benchmark of success is long overdue.
As Langenfeld accurately surmises, promoting high-quality products for resale could resolve many of these systemic issues. It is time we embrace personal responsibility in our purchasing decisions and hold companies accountable for the products they release into the market.
