As the title states I'd like to know why this is. For example if a product costs a company $5 and that company sells the product for $6 then $1 profit is made. Or at the least we can assume companies generally sell products for profit and are not losing money on a sale. With the above example if a customer purchases the mentioned product for $6 and then for whatever reason claims the product was stolen upon delivery, as is the case with many online fulfilled orders, the company can either A)Give the customer their money back, or B)send the customer a replacement product. My question is why do companies like Amazon even bother offering to refund the money without the product, wouldn't they lose more money by accepting the loss of the item in addition to returning the customer's money? I figure it would make the most sense to only offer to send 1 replacement requiring a signature and from that point on requiring no additional return assistance aside from exchanges of items of equal or lesser value. If my point isn't clear I've provided some simple math examples to get it across: Product Cost to Company=$5 Product Price to Consumers=$6 Initial sale of product: $6-$5=$1(profit) $1-$6=$-5(Company gives back money without receiving product in return) $1-$5=$-4(Company sends replacement product and keeps money from first purchase) As you can see it doesn't make sense why companies offer to return money without receiving the product back, knowing items are sold for profit the above would be true regardless of the company as long as the company is selling their product for more than it costs them to provide the product for the customer. I don't see why companies let customers chose to receive money back without returning a product when companies could simply send a replacement product for less of a loss and be done with the return.