Can Amazon legally withhold sellers’ funds? [Crew Review]

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Hey Reader,

Many Amazon sellers have had their accounts suspended or banned due to violations of the company’s terms of service. Most of the time, this is accompanied by withholding of funds.

Many sellers think Amazon’s discretion to withhold seller funds is unfair, especially those who aren’t quite sure about what terms they violated.

So the big question is Is this legal?

A Washington arbitrator doesn’t think so.

AMZ Sellers Attorney, a group of Amazon account reinstatement experts, reported that the arbitrator has stricken the permanent withholding provision of Amazon.com’s Business Solutions Agreement. This is their first case in 2024 where they won against the e-commerce giant, but it was preceded by seven others last year.

The Washington arbitrator ruled that the said BSA provision “provide for an unlawful penalty, and thus are void and unenforceable under Washington law.”

The seller was awarded over $200,000 in damages and a 12% interest since the account deactivation.

Just to Be Sure

Where are you importing your products from? China? Vietnam? India?

No matter where it is, chances are you don’t get to visit your manufacturer as often as you want (it doesn’t make sense financially). But despite your absence, you’d still want reliable people on the ground to make sure that your products are up to standard, right?

That's where QIMA comes in.

The Illegal Best Seller

Amazon doesn’t allow illegal items to be sold on its platform.

So why in the world was a prohibited weapon in Canada marked as a best seller on Amazon.ca?

Under the Criminal Code of Canada, switchblades are illegal since they come under the definition of a “knife that has a blade that opens automatically by gravity or centrifugal force or by hand pressure applied to a button, spring or other device in or attached to the handle of the knife.”



But an Amazon seller managed to get away with it by marketing it as a camping knife. The listing title includes the keywords “camping knife”, “stainless steel blade”, and “hunting gear.”

The listing has been taken down after it was reported by an employee and a buyer.

The investigation that followed revealed it was not the only prohibited item listed on Amazon.ca. Investigators also found stun guns and brass knuckles, which were also taken down.

Amazon says it has proactive controls in place to prevent third-party sellers from marketing illegal items. But if all it took was to not type in the actual nature of the product, they may not be as effective as they seem.

Amazon Top Terms

Explore the preceding two weeks and discover the Amazon top 10 search terms that have experienced a surge in popularity during the final weeks of the year, spanning from December 24 to January 6.

In the latest Amazon top terms, keywords such as "pet safe ice melt" have secured a spot in the top 10, showing a substantial surge in sales with an increase of 982 units per day. This rise could be linked to the upcoming low temperatures.

If you're considering selling seasonal products, check out our article "Yay or Nay? The Pros and Cons of Selling Seasonal Products Online" for insights into making the right choice for your business.

Etc.

TikTok’s fee increase. From a 2% referral fee in 2023, TikTok has announced that it will increase the fee to 5% to 6% starting April 1. (And we don’t think it’s an April Fools’ Day prank.)

Walmart’s AI. Walmart introduced new AI-powered technologies to help its buyers restock their fridges more efficiently. 

New year, old layoffs. Big Tech isn’t done with getting rid of more employees in 2024 as they focus more of their resources on AI.