With FBA, Amazon provides fulfilment and customer service for your orders, including processing customer returns. Amazon uses their own returns policies to determine if an item is eligible for return.
In most cases, customers can request to return an item within 30 days of receiving it. Amazon may make case-by-case exceptions and accept return requests beyond 30 days of receipt.
In most cases, if an item does not arrive at a fulfillment center within 45 days of the return request, Amazon will charge the customer and credit your account for the item.
When Amazon refunds a customer for your FBA order, they debit your seller account for all or part of the value of the refund. In some cases, for example, when an item is lost or damaged when under Amazon’s control, you may be eligible for a reimbursement for refunds on your FBA orders.
Amazon is a very customer friendly marketplace, and often they will issue refunds or returns on your products even if you think that the customer should not have the right to return.
You can appeal these returns if think you have a valid reason for rejecting the return - but Amazon will often side with the customer regardless.
What happens to returns?
If the product is in a sellable condition, then it will be returned to your inventory in FBA ready to be sent out to another customer. Amazon will do minor fixes to make a product sellable again (e.g. resealing a package).
If the product is damanged or not in a sellable condition, it will be moved into an "unfulfillable" status. You then have the option of having the product sent back to you, or destroyed by Amazon.
You must have a warehouse in the local country in order to have Amazon return an unfulfillable product to you.