Moneybox

Amazon Should Be Very Careful About Banning Customers for Making Too Many Returns

Amazon founder and CEO Jeff Bezos presents the company's first smartphone, the Fire Phone, on June 18, 2014, in Seattle.
Amazon founder and CEO Jeff Bezos presents the company’s first smartphone, the Fire Phone, on June 18, 2014, in Seattle.
David Ryder/Getty Images

In July 2009, after Amazon bought Zappos for $1.2 billion (or 10 million shares of Amazon, which are worth more like $16 billion today), Jeff Bezos recorded a video, in which he promised to tell us everything he knows—”a short list,” by his own admission, but one that starts with the very simple proposition that “you need to obsess over customers.”

That principle, explains Bezos, is why he bought Zappos:

Zappos is a company that I have long admired, and for a very important reason. Zappos has a customer obsession, which is so easy for me to admire. It is the starting point for Zappos. It is the place where Zappos begins and ends. And that is a very key factor for me. I get all weak-kneed when I see a customer-obsessed company, and Zappos certainly is that.

Zappos is certainly legendary for its customer service. Take the guy who ordered a pair of shoes, threw away all the packaging, ran in them for 450 miles, decided that he didn’t really love them, and then traded them in for a similar pair—while also getting a $35 refund, lifetime VIP status, and a handwritten note from his customer service representative.

Amazon, by contrast, has never been nearly as friendly. Slate had to trawl SEC filings to find its customer service number. And now, the Wall Street Journal reports, Amazon is taking just about the most customer-unfriendly action imaginable, by unilaterally banning certain customers when it considers them to be more trouble than they’re worth.

The Journal interviewed several frustrated Amazon customers, each banned for different reasons—one says she was banned for “report[ing] an unusual number of problems” with her orders, and another after returning “multiple smartphones within a short period.” Many said their accounts were closed without warning, and none had any sense of Amazon’s red lines. That’s because, as the Journal notes, “Amazon doesn’t tell customers in its return policy that their return behavior can get them banned.” It just “reserves the right to terminate accounts in its sole discretion.”

Why would Bezos, who claims a dedication to obsessing over customers as a core value, do this? Bezos might have admired Zappos’ customer service, and even bought the company because of it, but he has made no effort to copy it. Amazon has always been a website with no real personality, no human voice. When Bezos talks about obsessing over customers, he means customers plural—the broad mass of millions of people, all over the world, who shop at his store every day. If he pays attention to individual stories, it’s less because he cares about the individual and more because he worries that the story being told might be symptomatic of a larger problem.

In the age of social media, it might. Even the tiniest fraction of customers have amplifiable voices. As the Journal piece shows, they’re easy to find, they’re easy to write stories about, and those stories will make Amazon out, accurately, to be a heartless faceless corporation. Those stories will reach a broad mass of Amazon customers, who might start having second thoughts about the way in which they’re entrusting one enormous global company to fulfill so many of their most personal needs. That might sound far-fetched, given how much so many people rely on Amazon, but that’s precisely the point: Amazon has become so big, so ubiquitous, so necessary, that being banned from using its services can cause a serious dent to your quality of life. If you don’t know what, exactly, might get you locked out—nowhere on Amazon’s website does it say anything about the dire potential consequences of returning too many items, and there’s certainly no general consensus on the question of how many returns is too many—you might back off from that reliance in the first place.

There are certainly many cases where it makes sense for companies to maintain a level of strategic ambiguity and wiggle room when it comes to their policies. As Starbucks is discovering, you don’t want to set hard and fast rules, for fear they’ll be gamed. But Amazon is too opaque: Before banning people for returning too many items, a company that genuinely cared about its customers would check in with them first and warn them of the consequences of continuing to buy and return. Amazon’s failure to do that speaks volumes about the degree to which its customer-centric stance comes from greed, rather than empathy.

Amazon also seems to be suffering from a syndrome common to nearly all fast-growing giants, which is that it hasn’t really come to terms with its size. When a faceless behemoth is rapidly moving toward a trillion-dollar market cap, it’s hard to feel bad about returning some phones. If Amazon wants its customers to return less of what they buy, it’s going to have to start being a bit more explicit about what it considers not-OK behavior. And now that bans are less an inconvenience than an active punishment, it behooves Amazon to be increasingly judicious in where it sets the line. As one banned customer told the Journal, “You don’t realize how intertwined a company is with your daily routine, until it’s shut off.”