Amazon announced that they are extending their A-to-z Guarantee to protect customers in the unlikely event a defective product sold through Amazon causes property damage or personal injury – regardless of who sells it.
Amazon stated in a post on their website that the company will directly pay customers for claims under $1,000 – which Amazon says account for more than 80% of cases – at no cost to sellers. Amazon also says it may step in to pay claims in higher accounts if the seller is unresponsive or rejects a claim that Amazon believe’s to be valid.
Another interesting thing from Amazon’s post is mention of the Amazon Insurance Accelerator. According to Amazon, “sellers have long been required to obtain product liability insurance.” Amazon reported that it worked with an insurance broker to create Amazon Insurance Accelerator, and that sellers only pay for the cost of the insurance itself.
CNBC reported that Amazon’s third-party marketplace, “where counterfeits, unsafe products, and even expired goods have become a notorious problem” have attracted scrutiny from lawmakers and regulators.
Last month, the U.S. Consumer Product Safety Commission sued Amazon to force it to recall dozens of defective products sold by merchants on its marketplace. Perhaps Amazon’s A-to-z Guarantee is a means by which to appease the Commission.
Financial Times reported that Amazon told the Texas Supreme Court that it was merely the middleman in a transaction where someone was injured by a product they purchased through Amazon. The Texas Supreme Court agreed with Amazon’s position. A California court said Amazon could be held potentially liable for third-party sales, in the same way a bricks-and- mortar retailer might be.
Overall, I think the result is that Amazon will take more effort to remove dangerous products from its platform. That’s good for everyone who makes a purchase on Amazon.