Monday, April 22, 2013

Amazon's Ebook Returns Policy Is A GOOD Thing. Here's Why.

Recently some indie author friends have become so outraged by ebook returns that they're trying to organize and bring pressure to bear against Amazon to eliminate its 7-day return policy on Kindle books. There are other vendors who allow returns as well, and I'm sure this same group will be targeting those vendors in due time.

The main reason why this group of authors is so upset is that they're watching their online, real-time royalty reports very closely, and making financial decisions for themselves and their households based on the "sales" they see reported there.

However, as any mainstream-published author already knows all too well, until net royalties for book sales are actually paid they are subject to change, and a large quantity of returns can easily bring your royalty statement for a given 6-month period into the red. The same is true of returnable self-published books, but these authors don't seem to get that, or if they do get it, seem to think it's unfair.

And so they've taken to social media to try and raise the visibility of this issue, to nudge their fellow authors into taking action intended to eliminate legitimate, vendor-sanctioned ebook returns. In my opinion, what they're doing is a big mistake and if they succeed in getting vendors to eliminate ebook returns, it will be bad for all authors who have ebooks on the market.

Amazon's 7-day return policy seems to be the biggest target here, so I'll address my remarks to that specific vendor. But I think the points I'm about to make here are equally applicable to any ebook return policy.

I am *in favor* of Amazon's 7-day return policy on Kindle books. Here's why:

1. Hard copy books can generally be returned up to 30 days after purchase---longer, if you bought them someplace like Target. Therefore, as a consumer and reader, I don't see why ebooks shouldn't be returnable as well. Why aren't all of these same authors up in arms about return policies on hard copy books? I'm all for removing barriers to ebook adoption, and one major barrier is consumers' perception of value, that an ebook is somehow inherently inferior to, and less valuable than, a hard copy book. Elimination of ebook return policies makes ebooks economically inferior to hard copy books, from the consumer perspective.

2. Returnability removes the risk for buyers who might not otherwise take a chance on a new author.

3. People who want to game the system will always find a way, and it doesn't make sense to take these first two benefits away from readers (and authors) for the sake of trying to do battle with the scammers. Take returns away, and the scammers who are abusing the returns system will just go back to outright piracy. Meanwhile, you've given paying customers some good reasons not to take a chance on your ebook.

4. I don't believe most people DO read a book within 7 days of purchase, nor do I think most readers WANT to be put under that kind of time pressure. Those who are willing to read EVERY Kindle book they buy within 7 days are already paying a significantly higher cost than the price of the book in terms of convenience.

Classic case of penny-wise, pound-foolish. True, the dishonest buyers' inconvenience does not put money into authors' pockets. But this just underscores my point about people who are looking to game the system. People who are willing to put themselves out like that to save three bucks or less are not a desirable target demo. I don't want them to be my fans because they're not truly invested in my work in any sense of the term, and never will be.

5. Regarding the "missing" or "stolen" royalties issue, I know this will sound harsh, but authors shouldn't be counting their chickens before they hatch, anyway. Until I actually get a royalty transfer into my bank account, I know those figures I see in the KDP reports are fluid and subject to change. KDP authors still have it better than mainstream-pubbed authors, who must wait a year or longer for the first royalty check and only get them every six months thereafter.

My Indie Author Guide STILL hasn't 'earned out' (the collapse of Borders meant thousands of returns), and it was published in November of 2010.

6. Contrary to what these agitating authors seem to think, those ebook returns do NOT represent lost sales. The people who are motivated to steal books or anything else never intended to pay for those things, and never would have paid for them. This argument from the authors is like a bank manager thinking that if only the bank robbers could've been talked out of their heist, they would've opened accounts at the bank and become customers.

Pirates and thieves are pirates and thieves, period. It's just a question of how they get the books for free: illegal download, or return policy abuse.

7. Some of the authors who are speaking out about this are suspicious that there are actual, organized groups promoting the practice of return abuse as a means to get free ebooks. But even if there ARE groups of people who've organized to promote theft, well...so are pretty much all piracy groups. There's no way to stop all piracy, and if people are abusing Amazon's returns policy, it's just another form of piracy.

8. Again, I know I'm about to sound really harsh, but the realities of business ARE sometimes harsh and that doesn't make them any less real: Ignorance is not a defense here. Anyone who's self-publishing for profit has a duty to read, and ensure they not only understand but agree with, any contracts they're signing, and that includes KDP terms of use and Amazon's ebook listing and sales policies.

If you don't like Amazon's ebook returns policy, you shouldn't publish there or list your ebooks for sale there.

- - - -

Personally, I share Neil Gaiman's view on piracy: I don't care how people initially discover me, because once they're fans and are able to pay, they will. And in the meantime, they'll be spreading the word about me and my books. You may disagree with this stance, or even feel it's na├»ve. But the bottom line is the same, regardless of anyone's opinion about it: thieves will ALWAYS find a way. Hassling your paying customers and fans in an effort to discourage thieves will NEVER stop the thieves, but it is LIKELY to annoy customers and fans, resulting in TRUE losses in sales and new fans.

Has consumer hatred of DRM taught us nothing?

15 comments:

Bridget McKenna said...

I wholeheartedly agree, April. If someone buys a book of mine and returns it (and they have), I know that isn't one of my readers, and we're both better off. The royalty wasn't yet earned, so no-one is taking money out of my pocket. On to the next reader finding me.

Michael McKee said...

Excellent points, April, all of them. I might add that making ebooks returnable provides a disincentive for pirates to create DRM free copies in the first place. Free copies floating around, that don't have to be returned in a week, are more likely to hurt sales than returns.

R.E. McDermott said...

Well, I guess I am a bit harsh, but I believe if folks are returning an author's books in large enough quantities to cause concern, the problem isn't the readers, it's most likely the book. Most writers I know that are selling well average about 1 to 2% returns, or at most 5%. Anything over that, especially in tandem with a high percentage of negative reviews, probably indicates the writer should take a long hard look at the book, and perhaps consider a re-write. Just my $.02. Thanks for addressing the issue.

Russell Blake said...

I was asked to sign the petition, and I declined. My reasoning is simple. Amazon is a cutting-edge, astute vendor whose objectives match mine - to sell lots of ebooks. They have access to all the data, and if they aren't worried about returns significantly hitting their bottom line, I'm not going to sweat it. There will always be crooks. I have one series that has 7 returns for each book in the series this month, and sales vary by as much as a thousand books from title to title. Obviously someone's reading and returning their way through the series, but I'm not sure that denying ALL readers the ability to return is an appropriate response to a few bad apples gaming the system. I'd like to think the right response would be to lobby Amazon to have a tracking system to better spot abusive returns, and deal with it on a case by case basis.

The reader is always right, at least in their eyes. Which means that anything that pisses them off, like eliminating returns, is bad. As authors, maybe we take some small lumps, but contrast that to what authors were forced to accept five years ago from trad pubs, and there's never been a better time to be an author.

All or nothing dogmatic approaches hurt everyone. So I didn't sign, even though I share the authors' frustration.

Anonymous said...

I have to disagree. I have seen every one of my titles bought and returned within hours, then another title bought and returned and so on. Amazon does nothing about the abuse and so the policy should instead be changed to returns on books until a reader has read a certain percent of the work. If you see a movie and hate it, you don't get your money back. If halfway through you realize the sound is off or you just aren't in the mood, however, you can. Books should be treated the same.

April L. Hamilton said...

Anonymous -
Again, remember that hard copy books are returnable for THIRTY DAYS OR LONGER. THIRTY DAYS is plenty of time to read ONE HUNDRED PERCENT of a book, so why should some arbitrary percentage limit be placed on ebook buyers? How is that fair, and how does it encourage ebook adoption?

As a buyer of books, in all honesty I'm outraged by the very notion. Why should *I* have to be subjected to a limitation or penalty that the hard-copy book buyer doesn't have?

K. L. Richardson said...

Most vendors allow returns if the customer is not satisfied with the product. If you're unsatisfied with a physical book, returns are allowed, the same should be allowed for eBooks.

I am a fairly new indie author. I haven't sold many books HAHA, but what I have sold, nothing's been returned. The only problem I've had is my aunt embarrassing me on Barnes and Noble reviews. *sigh*
**cough* Blood of Zee: Unfinished Business cough**

Belinda Pepper said...
This comment has been removed by the author.
Belinda Pepper said...

Another BRILLIANT article, April. I'm making this required reading for every self-published author I bump into.

I think authors need to take a hard look at their work. If returns are a big enough problem that the author becomes indignant, they need to analyse why.

1)It's always easier to blame someone (or something) else for a "failure". Instead of authors asking why their book has been returned, they instantly blame scammers of the system. It's less of a hit to the ego, and I believe this is the biggest reason this issue has picked up so much momentum.

2) MOST readers who simply don't like a book will either leave a crummy review, or suck it up and say, "that was a crappy book, I'll steer clear of that author in future".
So to say that readers requesting refunds are either scamming you or just being unfair (i.e. "you don't get a refund if you don't like a movie") is an illogical argument.

Overwhelmingly, readers will ask for a refund if they feel cheated in some way.

For example, if a book is much much shorter than they were expecting (e.g. they bought "The COMPLETE Guide To Business" only to find the book was 10 pages long and 4 pages of that was promoting the author's consulting business). Or perhaps they thought they were buying a novel, when they were in fact buying a short story.

Or perhaps the synopsis was misleading. We were told that the story's characters were going to battle against a major corporation. Except, just as the character realises who the bad guy is (the major corporation), the story ends. To be continued. That story didn't deliver on its promise.

Or perhaps the book wasn't edited and is absolutely full of mistakes. Why should the reader buy a product that isn't even remotely of publishable quality? They ask for a refund.

Again, I'll reiterate: MOST readers will not ask for a refund simply because the book "wasn't their cup of tea". They WILL ask for a refund if they feel tricked or cheated in some way.

3) Like you said, April; imposing anything that makes a customer's purchase decision more difficult will only HURT the industry.
This is why we see so many authors and publishers ditching DRM.

Basically, authors need to answer these two questions:
Will taking away refunds stop pirates and scammers? NO.
Will taking away refunds make things less appealing and functional for legitimate customers? YES.

This should be a no-brainer. Keep refunds.

Carolyn Mandache said...

April I agree with your take on this issue. I am a fairly new Indie author, and as yet, have not had any e-books returned. Unfortunately, there will always be people who abuse return policies, but like you said, it is a big selling point for authors who are unknown and trying to make their first sales.

Tatiana Moore said...

Thanks for the post! A lot of really valid points that I hadn't considered. I was freaking out a little by the returns that I've seen this week alone (first week to really have returns in the last year that I've been using amazon; I just increased my book price). Anyway, thanks again. I'll keep this in mind as I watch my numbers.

Sherry Soule said...

I think the solution is to check how much of the book has been read. If less than 25%, then refund it. If more than that, then no refund. As for an appropriate time period? I think 3 to 4 days is enough time.

As for those trying to cheat the system? Even if Amazon closes the account of serial read/returners after too many refunds are requested, what’s stopping them from just creating a new account under a different email and user name?

I feel that the dilemma isn’t that readers are purchasing a book(s) and returning them after reading them for a refund, the problem is most definitely related to e-piracy. After a book has been refunded, within a day or two I find pirated copies. The major distributors of pirated eBooks purchase the book, remove the DRM, and then return it. In some cases, eBooks are returned after being read, which is wrong, too but I think it has more to do with e-pirates.

Sherry Soule said...

I think the solution is to check how much of the book has been read. If less than 25%, then refund it. If more than that, then no refund. As for an appropriate time period? I think 3 to 4 days is enough time.

As for those trying to cheat the system? Even if Amazon closes the account of serial read/returners after too many refunds are requested, what’s stopping them from just creating a new account under a different email and user name?

I feel that the dilemma isn’t that readers are purchasing a book(s) and returning them after reading them for a refund, the problem is most definitely related to e-piracy. After a book has been refunded, within a day or two I find pirated copies. The major distributors of pirated eBooks purchase the book, remove the DRM, and then return it. In some cases, eBooks are returned after being read, which is wrong, too but I think it has more to do with e-pirates.

Just my two cents...

denise said...

I also believe that eBooks should be returnable, I did not even know this by the way! Specially on Amazon sometimes I click add to cart and it automatically buys the book. Most people do not even read a book in 7 days so I do not see the big issue that this would be causing. Also, if someone reads a book and it is good why would they return it? At least personally I will read a book I am intrested in about one or two days but that does not mean I will return it, on the contrary it was so good that I want to keep it! As a matter of fact when I read eBooks that are good I also go ahead and buy the actual print book as well just because I want to share with it everyone I know. If they were to eliminate this reuturning policy then change it to 3 days for example because this gives the reader more than enough time to give the book a try or to return it if it was bought by a mistake. Also I personally believe that specially for indie authors their main concern should not be the sale but to get actual readers.

Andy Schwarz said...

I got my first return today. I was like "What, they didn't like it?" Though I suspect its because I just dropped my price from 2.99 to .99. But then again, who the hell knows? I don't care if people steal an ebook from me, I just want them to read, love and tell someone else. Steal away as long as you tell your friends and leave reviews.