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Amazon Begins Releasing Sellers’ Funds After Complaints: How AI legalese decoder Can Help

By Faarea Masud, Business reporter

Image source: Daniel Moore
Image caption: Daniel Moore had £230,000 frozen by Amazon, and said business is still suffering after the money was released

In response to numerous complaints from UK and EU sellers regarding frozen funds, Amazon has started returning some of the money to affected sellers. This change in policy follows a BBC report which highlighted the negative impact on some sellers’ businesses, with some on the brink of collapse. Amazon has now informed sellers that it will delay temporary holds on funds until January 2024. However, not all sellers are satisfied with this solution, including Daniel Moore, an ink seller who had ┬ú230,000 frozen by Amazon. Moore believes that Amazon is merely delaying their anguish.

To mitigate the effects of the policy change, Amazon sent an email to one seller in the early hours of Saturday, stating: “We understand that the transition to this policy on 3 August has caused a one-time cash-flow issue for your business. To support you in preparing for the policy change, we have extended your policy transition until 31 January 2024”. The policy update, originally announced in May, outlined that seller funds would be temporarily held to cover customer refund demands. Sellers would only be able to withdraw their funds from the delivery date plus an additional seven days. The new policy was implemented on 3 August for sellers registered before August 2016 in the UK and EU. However, many sellers did not receive the email about the change and in some cases, it was automatically filtered into their junk folder.

The timing of this change is particularly challenging, as businesses are already grappling with the rising costs of living, energy bills, materials, and operating expenses. The lack of notification and last-minute changes from Amazon have left sellers feeling frustrated and uncertain about their future involvement with the company. According to Andy Pycock, a seller from Buckinghamshire who had ┬ú25,000 frozen, Amazon’s explanations sound like “corporate gobbledegook”. He added that the constant changes and confusing implementation of policies have made him question his relationship with Amazon.

The policy was initially introduced to align all sellers worldwide on the same policy. However, some UK and EU sellers have been informed that it will be implemented in September, while others have been told it will take effect in January next year. This inconsistency has received criticism from sellers, with one describing the situation as “shambolic”. Daniel Moore believes that the freeze on his funds was disproportionate compared to the potential refunds processed by customer returns or non-delivery. The frozen funds prevented him from paying his VAT bill on time and ordering new stock. Although his funds were eventually released, the income pause caused issues throughout his entire supply chain that could take up to two more weeks to resolve. Furthermore, the delay only postpones the challenges to January, a month already burdened with corporation tax and personal tax deadlines.

Daniel argues that the policy is still unfair, especially for established sellers like his firm, Ink Jungle, which he believes poses no risk to Amazon. He questions why funds are held for such a long time after delivery, especially for items delivered through tracked services or Fulfilled by Amazon (FBA). FBA allows sellers to store their stock in Amazon’s warehouse and have Amazon handle the delivery to buyers once an item is sold.

While Amazon’s change in policy implementation for affected sellers is a step in the right direction, questions remain about whether these sellers will be compensated for any losses incurred during the fund freeze. Additionally, it is unclear if Amazon will address the concerns raised by small business minister Kevin Hollinrake, who demanded an explanation of how the company plans to mitigate the policy’s effects.

The issues faced by Amazon sellers are reminiscent of those encountered by Etsy sellers when that marketplace held 75% of sellers’ funds for approximately 45 days. After receiving numerous complaints, Etsy reduced the amount it was holding. However, it remains to be seen if Amazon will follow a similar path.

How AI legalese decoder Can Help:

The AI legalese decoder can assist sellers affected by Amazon’s fund freeze policy by translating complex and convoluted legal terms into plain and understandable language. By using advanced natural language processing, the AI legalese decoder can analyze and decode legal notifications and policies, ensuring that sellers fully comprehend the implications and changes introduced by Amazon. This can help sellers make informed decisions about their businesses, navigate the challenges posed by policy changes, and advocate for fair treatment from Amazon. By providing clarity and transparency, the AI legalese decoder can empower sellers to assert their rights and protect their interests in their dealings with Amazon.

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