Amazon has announced that it would pay compensation directly to customers in cases where they received faulty goods sold by independent sellers on its platform. The e-commerce giant said this as it has been under pressure over product safety and after facing a series of court cases. Amazon said that it would start compensating for faulty third-party goods from September 1. The company said that compensation on damage claims up to USD 1,000 would be given by it. According to the company, such claims account for around 80 percent of the total cases on its store. The company might even pay claims for higher amounts in cases where the seller is not responding to customers or has rejected a claim that Amazon believes to be valid.
More than 50 percent of the products sold by the company now come from third-party sellers and are not sold directly by the e-commerce giant itself. While this has given more options to buyers, it has also introduced significantly more risk. The risk is because of the fact that these products reach customers without being vetted by Amazon. Many of the sellers simply list their products on Amazon store and use the company’s logistics network to deliver products at the doorsteps of customers. There are some sellers who just list their products on the store but use delivery services of other companies like FedEx to delivering products.
Last month, US Consumer Product Safety Commission had sued the e-commerce giant. The federal agency said it took the step to force the company to recall hundreds of thousands of faulty products. The agency said that the e-commerce giant needs to take responsibility for products that posed a risk of serious injury or even death. Some of the products included in the list by the CPSC are hairdryers without sufficient protection against electric shocks, bathrobes for children, and carbon monoxide detectors. Under pressure, Amazon has now changed its rules. The company said that it would use its ‘advanced fraud and abuse detection systems’ along with external fraud experts to pick valid claims. “We are standing behind customers and regardless of who sells products in our store, it is our duty to protect customers,” the company said in a blog.