This weekend I stumbled across an editorial titled, “What You Don’t Know About Amazon” in the New York Times. The article starts with a story of an Amazon customer who received a defective product and struggled to get compensation for serious harm because it was purchased from a third-party (3P) seller in China. The 3P couldn’t be found and compensation wasn’t obtained.
The media struggles to keep up with changes to Amazon policies.
Though caused by a myriad of issues, Amazon product safety issues are more common than they should be, and there is an argument that more could or should be done. However, I do compliance and risk management for a living, and I trust Amazon more than direct-to-consumer websites.
The editorial’s author fails to mention Amazon’s Master Service Agreement (MSA) and is also silent about the Master Service Agreement (MSA) and is also silent about the very real changes Amazon made this year to its A to Z program and its insurance requirements for 3P sellers. Specifically, Amazon updated its A to Z policy with the following language:
“To request compensation for property damage or personal injury that you believe was caused by a defective product purchased on Amazon, contact us. Once you file a claim, we’ll work with you directly or through our external claims administrator to collect information, investigate the claim, and attempt to facilitate a resolution with you, and if necessary, our selling partner and their insurance providers.”
This policy seems specifically designed to provide compensation to customers who are injured by a product purchased on Amazon through a 3P seller, addressing the issues raised in the article.
To back this up, Amazon updated its MSA (which always required the 3P seller to carry liability insurance) to require sellers to provide certificates of insurance (COIs) to demonstrate they have a policy with the following:
“Limit must be at least $1 million per occurrence and in aggregate, and cover liabilities caused or occurred in conjunction with your business operations, including products, products or completed operations and injury.”
Amazon verifies these COIs to address just the types of issues raised in the New York Times article. Failure to provide the COI can lead to the suspension of a 3P Seller’s selling privileges.
What gets lost in these critiques which target E-commerce Platforms is that they have built trust by implementing standards that do a better job of protecting consumers than direct websites. Yes, platforms like Amazon, eBay, Walmart, etc. should bear some responsibility, but they also deserve credit for the actions they take to protect customers more than most DTC websites. The system isn’t perfect, but in the case of Amazon, journalists should at least cite the steps Amazon has taken in the past year to address the concerns raised by the media.
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