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  • Writer's pictureHolly Sloan

Why Amazon’s new policy is great news

Last week Thompson and Holt looked in Amazon’s new liability insurance requirements and what they mean for Sellers.

There is one element of Amazon’s new policy - which comes into place on September 1 - that has been gaining increasing coverage about what it means for people both buying and selling on the platform.

That is Amazon’s coverage of up to $1,000 for faulty products sold by third-party Sellers. From this Wednesday, customers will be able to tell Amazon about an issue with a product, and the company will contact the Seller. Amazon has stated that if the Seller doesn’t respond, the company will “address the immediate customer concern, bear the cost ourselves, and separately pursue the seller”.

If the Seller in question denies a customer’s claim of a faulty product, Amazon has confirmed that they may pay out as much as $1,000 to address the issue, at hand at no cost to the seller.

Amazon says its new “A-to-Z Guarantee” is a “streamlined process” that will “save time, money, and effort for both customers and sellers”. The existing process involves customers personally contacting third-party sellers about issues with defective products.

Amazon says that 80 percent of the claims it receives are for less than $1,000, so this is a major policy to implement. And it’s great news for everybody on the site according to Thompson and Holt’s senior case handler Holly Sloan, who outlines four key benefits here.

1. It should ease Amazon’s legal worries

Thompson and Holt’s Holly Sloan: “Amazon has long claimed that it is not liable for products sold by third-party Sellers, but that has come under increasing scrutiny in the courts of late. Recently it has faced a lawsuit by the US Consumer Product Safety Commission to force it to recall defective products sold on its site. This move will help to repel much of the past problems, especially given that they say it will cover 80 percent of claims on the site.”

2. It increases consumer trust in Amazon Marketplace

Thompson and Holt’s Holly Sloan: “The previous stance of accepting no liability for defective products did Amazon few favours on the consumer trust front. Washing their hands of any responsibility for items sold through their platform was hardly a recipe for customers having confidence in what they are buying. This move is a major step forward on that front.”

3. It gives Amazon a competitive edge over its rivals

Thompson and Holt’s Holly Sloan: “Competition online continues at a furious pace around the world, and although Amazon is undoubtedly king, there are a multitude of other options for consumers everywhere. This move puts them one step ahead of the vast majority of their biggest rivals, and it will be fascinating to see whether any of them respond in kind in coming months.”

4. It makes financial sense

Thompson and Holt’s Holly Sloan: “This is perhaps the most crucial benefit - because Amazon wouldn’t be doing it if it didn’t make good financial sense. Amazon’s policy of quickly sending replacement items for missing packages has been successful, achieving increased customer trust but also saving money by using computer systems rather than human employees to resolve issues. That’s not to say that robots will be resolving damaged goods issues, but by taking the Seller out of the equation for potentially lengthy disputes, they will be able to save valuable time when settling cases. In doing so, they provide a better service for both Sellers and customers. The other crucial factor to consider is that this policy will only apply for Sellers that abide by the new insurance liability rules, protecting Amazon for the much bigger claims. If you want to be covered up to $1,000, you need to make sure your own insurance meets all of their requirements.”

If you have found yourself suspended while selling on Amazon, contact Thompson and Holt for a free LiveChat to get your Seller business back online as quickly as possible.

Thompson and Holt are also offering a free months trial of their Monitor and Protect service to help sellers prevent a suspension of ASINs or an their account during the COVID pandemic, more information on how to protect your Amazon seller account from a suspension can be found here.

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