E-commerce and online shopping platforms have opened a whole new world of products for buyers that would have never been available to them previously, but that power doesn’t come without some drawbacks. Although items sold through Amazon carry more weight than those on custom or smaller online shipping sites, it isn’t an assurance that those products actually work as advertised. Taking an important step forward to assure its users, Amazon is making the bold announcement that it is willing to compensate buyers who experience harm or damage from defective products sold through its platform.
Amazon has long avoided making such a move because of the legally gray area it is treading on. It has insisted that it isn’t exactly responsible for those defective units because it was more like a middle-man than a seller in this context. Unfortunately, US courts seem to also be divided in their opinions on that matter.
Things get a bit more complicated when you factor in the Fulfilled by Amazon program. Rather than shipping first from the seller, products under the FBA are stored, managed, and shipped by Amazon directly. Agencies like the US Consumer Product Safety Commission argue that this creates the expectation or impression that buyers are transacting directly with Amazon and expect to hold the company accountable for defective products that cause harm.
While it’s not exactly admitting it has legal accountability, Amazon is now announcing that its A-to-Z Guarantee will directly pay buyers up to $1,000 for claims regarding defective products if those products cause property damage or personal injury. It may even agree to pay higher amounts if the seller is unresponsive or rejects a claim that Amazon already considered to be valid.
While Amazon agrees to foot the bill at no cost to sellers, there is one critical requirement that sellers need to take note of. Amazon says that it will bear the costs “from sellers who abide by our policies and hold valid insurance.” Coincidentally, it is also launching its Amazon Insurance Accelerator program to make it easier for sellers to set that up.