Amazon Gives Consumers Easier Way to File Complaints for Faulty Goods From Third-Party Sellers

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  • Amazon is updating its returns policy to include a provision that makes it easier for consumers to file complaints about defective products sold by third-party merchants.
  • The company has long struggled to stop the sale of faulty and counterfeit goods on its sprawling marketplace.

Amazon is making it easier for consumers to file a complaint when they believe they've been harmed by a product from a third-party seller.

On Tuesday, the company updated its longstanding returns policy, referred to as the A-to-Z guarantee, to address defective product claims. Beginning Sept. 1, consumers can contact Amazon with a personal injury or property damage claim, and Amazon will then connect the consumer with the seller.

Currently, buyers are encouraged to contact the seller with any issues, leaving Amazon mostly out of the process.

The change addresses an issue that has long plagued Amazon's third-party marketplace, where counterfeits, unsafe products and even expired goods have become a notorious problem and attracted scrutiny from lawmakers and regulators. The marketplace, made up of millions of third-party sellers, has grown bigger than Amazon's own retail business and helped the company expand other revenue sources like fulfillment services and ads.

Starting next month, consumers will be able to file claims on products with Amazon directly. Amazon said it will vet the claims using a combination of independent insurance fraud experts and its own fraud and abuse detection systems.

If Amazon determines the claim is valid, it will reach out to the seller. Consumers will be able to file an appeal if they believe their claim was wrongly denied, while sellers will be able to defend their product if Amazon approaches them. Amazon will also take over the claim if the seller doesn't respond.

Last month, the U.S. Consumer Product Safety Commission sued Amazon to force it to recall dozens of defective products sold by merchants on its marketplace. The complaint also seeks a determination that Amazon is a "distributor" of consumer products under the Consumer Product Safety Act, not just the owner of the platform through which the products are sold.

In recent years, numerous people who say they were harmed by exploding hoverboards, faulty dog collars and overheating laptop batteries have sued Amazon for damages. That set off a thorny debate around whether Amazon can be held liable for defective goods offered by third-party sellers on its site.

Amazon has fended off litigation by arguing it's just the platform, not the seller, shielding it from liability. The company says that as the conduit between buyers and sellers on its marketplace, it's not involved in the sourcing or distribution of products sold by third-party sellers. Several courts have sided with Amazon, but a string of recent cases have gone against the company.

Lawmakers have also sought to update product liability laws for the e-commerce era to make Amazon, Etsy, eBay and other companies liable for goods on their platform, just as retailers are held responsible for goods sold in their physical stores.

Amazon voiced support for the California bill on the condition that it apply to "all online marketplaces regardless of their business models," while rival retailers raised concerns that it would stifle small businesses that sell products online. The bill, which has since been tabled, might have benefited Amazon since it has more resources to handle exposure for defective products than smaller platforms.

WATCH: Etsy CEO slams Amazon's support of California consumer bill

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