Audible Returns and Indie Author Royalties – A Detailed Discussion

This content has been archived. It may no longer be accurate or relevant.

A couple of days ago, PG posted an item about author dissatisfaction with Audible’s return policies and the negative impacts they were having on indie authors’ audiobook royalty payments.

One of the comments was from a long-time regular on TPV, PolyWogg, and provided detail and discussion that PG thought deserved a more prominent position on this illustrious online stage.

Here’s PolyWogg:

In my view, there is quite a bit of disingenous hand-wringing here, and while part of it is the digital nature of the product that confuses things, two other elements are worse.

NOT ALL RETURNS ARE THE SAME. In a paper world, returns take two forms — seller returns and buyer returns. To be clear, the current issue is about buyer returns. People are not very careful with their wording though and some articles have referred to “longstanding conflicts over returns” which is the first type, not the second, and completely irrelevant to this discussion. Yet some of the authors fed that narrative.

For the “buyer” return, buyers return products for a bunch of reasons according to the popular research:

a. They already had it and didn’t need another one / they bought several and only needed one;
b. It was a gift and they didn’t want it;
c. It’s defective;
d. It didn’t perform as expected; or,
e. They used it and don’t need it anymore.

From market research, most people are generally okay with (a) to (c). A simple return. Almost all stores offer it, even when there is no legal requirement to do so. They can say, “All sales final” if they wish, subject to consumer protection legislation, but most places accept returns.

IRREGULAR RETURNS. A smaller percentage of the population are also okay with d (poor performance), but depends on the product. For example, if you bought a vacuum cleaner and found out it doesn’t pick up cat hair, it may not be defective but it doesn’t do what you expected. And if you return it soon enough, most stores will take it. They’ll reseal it, put back on the shelf or sell it as open box, and away it goes. There is, after all, nothing wrong with it. However, for the writer, what exactly does this mean? If you read 50 pages of the book, decide the author sucks, can you return it? Many buyers say absolutely yes, authors want to say, “Of course not”. But the publisher and the store makes that decision in paper world, not the author. And most of them will take the return unless the book is marred in some way. And even then, many of them will take it rather than alienate the customer.

The other area (e used/need) is a not-insignificant area of concern. The cliché is the girl who buys a party dress / man who buys a suit but doesn’t cut the tags off so that they return it the next day. They’re essentially converting their purchase into “borrowing” for the night cuz they either can’t afford it or see nothing wrong with ripping off the store. People do it with tools, computer equipment (like scanners), anything that can be a “use once” type situation where you need it but when you’re done with it, you don’t need it anymore. According to most market research, people are usually of the view that this is scummy behaviour and SHOULD NOT be allowed. I even bought a special purpose computer tool from a computer store about two years ago and the salesman told me to take it home, use it, fix my problem, and then bring it back afterwards. I bought it, I didn’t return it. It didn’t feel right to me, but not everyone feels that way.

For the author in the Audible situation, where they want to allow long-term returns, everybody wants to paint it as (e used/need), not (d poor performance), and therefore should not be allowed.

DIGITAL PURCHASES. The problem with all of this, which is exacerbated by the timeline, is that it is a digital product with no degradation from a return. It’s not “used” in that sense, just that potentially the buyer already got the benefit from it. Audible wants to give them the right to return something up to a year after they bought it. Which all the authors then say, “Well sure, you’ve listened to it by then, and NOW you want to return it?”. Putting it squarely in group (e). Bought, used, returned.

Except the authors are wrong. Sure, there will be people in that category, as there are for lots of industries, and for those people, it is similar to a subscription / all you can eat buffet. But market research puts it in the 5% category as legitimate purchasers (not pirates) believe it is wrong. They feel like they would be cheating, so they don’t do it. Pirates and pseudo pirates would, but they’re a small percentage and don’t really represent lost sales. They aren’t going to buy anyway. Would/could it increase? Sure.

But the real question is *why* would Audible want to offer that length of time instead of 1m, 3m, etc.? It puts no money in their pocket and actually costs them money to do it. Every business model out there (except two) would tell them this is a bad idea.

One exception to that general limitation on returns is the “lifetime guarantee” or “extended warranty”. Sears in Canada used to have their “satisfaction guaranteed” promise and the best story I ever heard was a refrigerator that crapped out after 20 years, the guy tried to get it fixed, couldn’t get the parts, and the STORE TOOK IT BACK SINCE HE WASN’T SATISFIED. He didn’t even ASK for it, they just did it. Of course, small differential in price to buy the new one, but that was their model. About 6 years ago, I returned a tablet within a 2-year warranty and they gave me the full original cost back because none of their current tablets had the same features to give me a replacement.

The new “disrupted” exception is digital purchases. Since there is nothing to repackage, check for defects, etc., it is 100% resellable (although not really since it is just a digital copy anyway). There is no added cost to the returns. So why would Audible embrace this model for long returns? Because the buyer isn’t using the product right away.

If you look at the number of books bought for Kindles the day after Xmas, another example, people load them up. Dozens of books. Do they read them all in a month? Nope. Some they might not get to for several months. Or perhaps never.

Audible is identical. People buy several books, and might take up to a year to get to listen to them. Perhaps they buy four books in a series so they can listen to them. And after partway through Book 1, they realize they really don’t like them. This puts it SQUARELY back in category (d poor performance). And for Books 2-4, those are more like category (b a gift they didn’t want).

Now, well after the purchase time, the reader/listener is sitting there with multiple books they don’t want, they bought in advance, and now they want to return them. More than 6m after they bought them. If it was paper, they probably couldn’t normally because too much time had passed.

If they can’t return them, what do listeners do? They stop buying in bulk. They buy 1 book now, and they wait until it is finished before buying the others. THIS is why Audible wants to offer the return. So that people will keep buying well in advance knowing that they might not read it for several months. And if they get to book 3 and find they don’t like the series anymore, they can return it.

Audible knows that if they don’t accept the returns, sales will go down in the short-term. People won’t binge buy. It’s part of the reason Kindle sales die off after a short while. Yet one of the other questions is why doesn’t Amazon offer it for ebooks?

In short, because the lead time from purchase to reading ebooks isa bout the same as it is for paper books, no differential. Audio books though tend to have strong purchasing from really busy people looking to timeshift their listening (commutes, workouts), and with COVID, many of them are NOT getting through their audio books as fast as they used to with commutes and gyms eliminated.

Audible is doing it because they’re tryign to keep buyers buying at sales and promotions, and buying in advance generally, not just when they run out of the previous one.

I agree there’s an issue of transparency, as there is in EVERY CORNER OF PUBLISHING, but there isnt’ a scandal here except that once again, a bunch of writers/authors are trying to tell you they are “artistes”, not business people making widgets that can be returned.