September 17, 2024, 8:31 am | Read time: 4 minutes
Customer protection has been an important issue for the online giant Amazon for several years. However, this can also come at the expense of others. Amazon has now changed an important regulation for retailers, causing annoyance.
Amazon has an “A to Z Guarantee Program” that is very important for customers and retailers. The program is primarily designed to protect customers in the event that faulty products cause damage. Going forward, one important requirement for retailers on the platform will be to obtain commercial liability insurance. TECHBOOK explains precisely what this means for retailers and customers and why this is causing displeasure.
This change is coming for Amazon retailers
The online giant Amazon has changed its liability rules. In a forum post in Amazon’s Seller Central, the company writes that it has updated the A-to-Z warranty program. The reason for this is initially obvious. It relates to cases where faulty products sold in the EU or UK stores cause property damage or personal injury. The compensation procedure has been adapted to cover such incidents.
Specifically, this means that retailers must obtain and maintain “valid commercial liability insurance once the gross revenue from their transactions exceeds the applicable mandatory insurance threshold for sales in any given month.” The change already applies in the USA and will now affect European retailers.
If a claim under 1000 euros is proven to be due to a defective product, Amazon will refund the amount directly to the buyer at its discretion and inform them of this. The merchant can view the status of the claim in Seller Central under “Manage A-to-Z Warranty Claims.”
As long as the merchant provides valid proof of insurance and complies with the guidelines, Amazon will not request a refund from them or their insurance company. For claims over 1000 euros, Amazon or the external administrator Sedgwick will review the claim together with the merchant and pay the refund to the buyer.
No positive response
In the comments columns, however, retailers are anything but satisfied. Most criticize the process at Amazon because buyers could exploit some loopholes. One retailer, for example, writes: “Well, the mob that always wants to get something out of Amazon is happy. Yet another reason to slowly leave the platform.”
Many of those affected also criticize one particular point. Amazon would pay the amount to the customer at its “own discretion.” Many Amazon retailers write that this point is particularly vague. They also accuse Amazon of arbitrariness, as the company would or could divide the amount according to its own criteria.
Another Amazon retailer writes: “I’m surprised that the thread only has 33 replies. Do the majority of retailers not understand what this means? A fraudulent case by a customer, or even a justified case, can lead to your account being blocked if you disagree and Amazon seizes your earnings.”
This is what Amazon says
TECHBOOK asked Amazon for a statement on the changes. We received the following response: “The safety of our customers is our top priority, and we want customers to be able to shop with confidence on Amazon. We take steps to prevent suspicious or non-compliant products from being listed on our website, and we proactively remove products in the event of product safety concerns.”
According to Amazon, the focus is, therefore, on customer protection. Customers with concerns about a purchased item are advised to contact Amazon Customer Service. The company also mentions the following: “When appropriate, we will notify customers and reach out to suppliers, manufacturers, and authorities to obtain additional information as a basis for our actions and further measures.”
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New warranty rules at Amazon should also be beneficial for retailers
The new regulation was introduced in May of 2024. In simple terms, it applies in the rare event that a faulty product purchased from the Amazon store leads to property damage or personal injury, according to Amazon.
In the press release, the company also emphasizes the benefits for retailers. Among other things, the company emphasizes that it will support its sales partners in verifying such cases. If a claim is submitted, the company intends to use its detection systems in collaboration with independent specialists to analyze the report. If necessary, the sales partners will be relieved of the investigative work. “Frivolous and abusive” claims would then be rejected accordingly in order to protect retailers.