The following examples illustrate how refund credits and refund administration fees are calculated for a BMVD product.
Suppose you receive the following single-item order for a book with standard shipping:
|Cost of book:||£10.00 (item price set by you)|
|+Standard Domestic Delivery:||£2.75 (rate set by Amazon)|
|– Referral Fee:||£1.73 (referral fee of 17.25%)|
|– Variable Closing Fee:||£0.49 (fee for Books)|
You then create a partial refund in the amount of £5.00 of the product charges. The amount returned to you is calculated as a percentage of the Referral Fee, paid on the product charge, not including shipping. The Variable Closing Fee is retained by Amazon.
£5.00 (partial refund)/£10.00 (product charge) = 50%
50% (percentage refunded) x £1.73 (amount of Referral Fee) = £0.87 (credit for refund)
The Amazon holdback in this case is 50% of £1.73, or £0.87, plus the £0.49 Variable Closing Fee, for a total of £1.36.
Because shipping for BMVD products is set per item, the delivery amount charged to the buyer cannot be consolidated. If a buyer orders multiple items from you, or multiple quantities of the same item, the buyer will be charged the same delivery rate for each item. In this case, you may want to issue a partial refund to return a portion of the delivery charges to the buyer.
Suppose you receive the following multiple-item order for DVDs with expedited delivery:
|1 copy of DVD-1:||£20.00|
|+Expedited Domestic Delivery:||£2.75|
|5 copies of DVD-2:||£100.00|
|+Expedited Domestic Delivery:||£13.75|
|1 copy of DVD-3 (box set):||£75.00|
|+ Expedited Shipping:||£2.75|
For this order, your proceeds would be as follows:
|– Referral Fee:||£33.64 (referral fee of 17.25%)|
|– Variable Closing Fee:||£1.12 (7 x €0.16 fee for Media products)|
You then refund a partial amount of the shipping fees to return £3.47 to the buyer (retaining £5.00 as your actual delivery and handling costs). The amount returned to you is calculated as a percentage of the Referral Fee, charged on the product price. For BMVD Products, Amazon does not calculate a Referral Fee on shipping, instead charging a percentage on the product price, exclusive of delivery, and adding a Variable Closing Fee. The Variable Closing Fee is retained by Amazon when you create a partial refund.
£3.47 (partial refund)/£195.00 (product charge) = 1.78%
1.78% (percentage refunded) x £33.64 (amount of commission) = £0.60 (credit for refund)