Weeding out customers

Online retail giant Amazon is facing new accusations throughout the Internet. Several blogs and web portals talk about an alleged new policy towards customers who make use of Amazon's return policy: word has it that if the quota of returned items is too high, the company locks down the respective accounts without warning.

It's a policy the affected customers vehemently complain about - after all, for them, the doors of Amazon's digital shopping mall remain closed. Christin Schmidt of the Association of German Mail Order Companies (BVH) says that such drastic steps are astonishing. "I don't know of any other retailer who takes action in such a way," Schmidt told DW.

Returns as part of the business model

An excessive number of returns may indeed turn out to be a problem for mail order companies. According to a survey by the University of Regensburg, for example, four out of 10 online shoppers actively include the return of items in their purchasing strategy. At the same time, "returned items are a fixed part of the business model for mail order companies," said Schmidt.

Online retailer Zalando, for example, has actively promoted its free returns policy, encouraging its customers to place so-called selection-orders. "Generally, we don't say that returns pose a problem for us; in fact, they are something that's clearly part of our budgeting," said Zalando's Kristin Dolgner.

Vague conditions

So at what point do returns turn into a problem for Amazon - a company that has been active in online sales since 1994? Questioned by DW, the retailer said that "account closures are only done on an exceptional basis after close, comprehensive scrutiny." That's according to Amazon spokesperson Christine Höger. An account would only be closed when a customer didn't show the "shopping and returns patterns of a consumer." There was, however, no reply concerning the question at what point customers had exceeded their returns quota. That means Amazon customers continue to be kept in the dark about what kind of behavior might risk an account closure.

The customer doesn't always come first

From a legal point of view, Amazon's latest actions are perfectly legitimate: "A retailer is free to choose whom he does business with," explained Thomas Bradler of the North Rhine-Westphalia branch of the German Consumer Protection Agency. As a result, locking out undesirable customers is fine, too. It's an approach that other online retailers have also followed, whenever they feared the abuse of their returns policy.

The only difference is that usually this is preceded by some form of communication with the customer - "via email or the phone; this allows for the customer to become aware of the fact that his returns are suspicious or too frequent," said Schmidt. Consumers would then have the opportunity to change their behavior, and only then, if there was no improvement, would customers would be barred from placing further orders.

Strategic bewilderment?

It remains unclear why Amazon doesn't contact its customers prior to locking down accounts. "This immediate form of account suspension is a very drastic measure, as it prevents the customer from future purchases from this retailer," Schmidt said. And that also means: whether this really helps Amazon protect its business, is questionable.