What: Amazon announces the end of its 'try before you buy' service for Prime subscribers, citing increased adoption of AI-powered features like virtual try-on and personalised size recommendations as more effective alternatives.

Why it is important: This strategic shift reflects the broader retail industry's move away from generous returns policies toward technology-driven solutions that prevent returns while maintaining customer satisfaction.

Amazon's decision to phase out its Prime 'try before you buy' benefit, which allowed members to order up to six items without upfront payment and keep them for seven days, marks a significant change in e-commerce strategy. The company points to the limited scope of eligible items and customers' increasing use of AI-powered features as key factors in the decision. Industry experts, including Riskified's Aviram Ganor, note this change reflects a broader industry trend of re-evaluating returns policies amid rising costs and fraud concerns. With return abuse alone costing global retailers $30 billion in 2023, companies are seeking balanced approaches that combat fraud while preserving customer loyalty through AI-powered, personalised solutions.

IADS Notes: Amazon's shift away from 'try before you buy' reflects broader industry trends in returns management. While retailers explore AI-powered solutions like virtual try-on to reduce returns, fraudulent returns cost the industry $103 billion in 2024. This strategic pivot comes as retailers balance customer experience with financial sustainability, increasingly favoring technological solutions over traditional try-before-you-buy models.

Amazon to end 'try before you buy' service