Amazon introduces “Informed buying decisions” label: A step against frequent returns?

• Amazon warns of products with high return rates
• The measure is intended to guide customers to make more informed purchasing decisions and reduce the return rate
• The e-commerce giant is responding to the industry-wide challenge of high returns and environmental impact

Amazon has introduced a new label called “Informed Buying Decisions” that appears on product pages and warns about items that are returned at an above-average rate. This label, which will initially only be used in the USA, appeals to customers to carefully inform themselves through product reviews, descriptions and images before making a purchase decision.

Reason for introduction and implementation

The introduction of the label comes in response to the general carelessness of many customers who order products to view and then return them because they don't like them. Amazon wants to use the label to encourage customers to become better informed and thus avoid making bad purchases. This is particularly relevant since, according to studies in Germany, one in four packages is returned. The result is around 530 million returned packages every year, which entails significant environmental impact and costs for online retailers.

Label as an answer to high returns in e-commerce

The returns problem represents a major challenge in e-commerce. The return rate is particularly high in categories such as clothing and shoes, where fit is crucial. Amazon's new action aims to reduce the return rate and is therefore beneficial from both an economic and sustainability perspective. Third-party retailers selling on the platform are also encouraged to describe their products clearly and accurately to avoid misunderstandings and therefore returns. At the same time, fake reviews should be avoided and warnings should be given about inferior products.

The label has only been released in the USA so far, but an introduction in Germany would also make sense for many reasons. Reducing the return rate not only leads to economic benefits for Amazon and other online retailers, but also has a positive impact on the environment by reducing the amount of resources needed to process returns. Amazon is thus reacting to the increasing return rates, which rose particularly sharply during the Covid pandemic and continue to be above pre-pandemic levels. The company is taking a leading role in the e-commerce industry and setting a standard for more sustainable and responsible consumption.