Can you deduct Amazon product returns as business losses?

Generally, yes—but not as a simple “business loss” deduction. The tax treatment depends on whether you’re an Amazon seller or a business buyer, and on what was returned.

If you’re an Amazon seller:

• Customer refunds usually reduce sales revenue rather than create a separate loss deduction.
• If the item comes back sellable, it typically goes back into inventory.
• If it’s damaged, unsellable, or destroyed, you may be able to treat it through inventory/COGS or claim a loss, depending on your accounting and records.
• Amazon fees tied to returns are often deductible business expenses if they’re ordinary and necessary.

If you bought the item for business use:

• A full refund usually means you should reverse the original deduction.
• A partial refund reduces the deductible amount, with details depending on how the item was booked.

Bottom line: keep Amazon refund reports, inventory records, and disposal proof. The exact tax result can change based on cash vs. accrual accounting and whether the item was inventory, supplies, or equipment.