Refund Holdback Sample Calculations

The following examples illustrate how we calculate the refund administration fee.

Example 1: Refund of a single item from an order

Suppose you receive the following two-item order:

Item A (item price)	600.00 AED
Item B (item price)	50.00 AED
Shipping on Item A	40.00 AED
Shipping on Item B	5.00 AED
TOTAL	695.00 AED

You then refund Item A, including shipping and gift wrap (this is commonly done if the customer cancels the item before the order ships). Assuming the referral fee for the product category is 15%, the initial holdback is calculated as follows:

Holdback for Item A

= Holdback Rate [Referral Fee x (Item A + Shipping Item A)]

= 20% x [15% x (600 AED + 40 AED )]

= 20% x [15% x 640 AED ]

= 20% x [96.00 AED ]

= 19.2 AED

But as the holdback for this product cannot be greater than 15 AED, it is capped at 15 AED.

Example 2: Refund of multiple (different) items from an order

Suppose you receive the same two-item order as described above, but this time you refund the order in full, including shipping and gift wrap (this is commonly done if the customer cancels the order before it ships). The initial refund administration fee calculation applies to each item in the refund, as follows:

Refund administration fee for Item A

= 20% x [Referral Fee x (Item A + Shipping Item A)]

= 20% x [15% x (600 AED + 40 AED)]

= 20% x [15% x 640 AED]

= 20% x [96.00 AED]

= 19.2 AED

Refund administration fee for Item B

= 20% x [Referral Fee x (Item B + Shipping Item B)]

= 20% x [15% x (50 AED + 5 AED)]

= 20% x [15% x 55 AED]

= 20% x [1.65 AED]

= 1.65 AED

Refund administration fees cannot exceed 15 AED, so the first is capped at 15 AED and the second is taken as is at 1.65 AED, for a total administration fee of 16.65 AED. Other item-related charges, such as shipping, are included in the refund administration fee calculation, but tax is not. Amazon does not retain a portion of any refunded taxes.

Example 3: Refund of multiple quantities of the same item from an order

Suppose you receive the following three-item order:

Item A (quantity: 2)	600.00 AED
Item B	50.00 AED
Shipping on Item A	20.00 AED
Shipping on Item B	5.00 AED
TOTAL	675.00 AED

You then refund both quantities of Item A, excluding shipping. Because the refund administration fee calculation applies to each unique item in a refund and multiple quantities of a single item comprise a single item, the calculation is applied one time for both Item A's. Assuming again that the referral fee for items in this category is 15%, the initial refund administration fee (before applying the 15 AED cap) is calculated as follows:

Refund administration fee for both Item A's

= 20% x [Referral Fee x (Item A's)]

= 20% x [15% x 600 AED]

= 20% x [90 AED]

= 18.00 AED

As this refund administration fee is greater than 15 AED, it is capped at 15 AED. No refund administration fee calculations apply to subsequent refunds involving this item because the 15 AED cap is already met.