What is a returns processing fee?

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Amazon’s refund administration fee explained for new sellers below.

If you’re using FBA, then Amazon charges a small fee for handling all customer returns. This line item on the invoice is called the Refund Administration Fee.

Basically, Amazon retains 20% of all order-related fees, up to a maximum of $5, to handle refunds. This applies per item, so if customers return 2 items, Amazon charges up to a maximum of $10 to handle the refund.

Other fees, like the sales tax collection fees and fulfillment fees, are not refunded.

For example, let’s say you have a $50 FBA sale with no sales tax collected and a small standard-sized item under 1 pound:

$50 – $2.41 fulfillment fee – $7.50 referral fee (15% of total sales price) so you’d receive $40.09 in your account. 

If the customer is issued a full refund:

$50 – $7.50 (referral fee refund) + $1.50 refund administration fee (20% of $7.50) for a total of $44 out of your account.

You paid Amazon $3.91 to handle the fulfillment and refund.

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