Good news, my latest escalation on this ongoing issue has revealed a new pilot program to fix the problem! (see highlighted text in bold below).
"Greetings from Amazon Seller Support!
We apologies for the any inconvenience that caused.
My name is Dinesh and I'm here to assist you today. I've reviewed your email and understand that you would like to investigate with the Order ID: #XXX-XXXXXXX-XXXXXXX. I will definitely help you with that situation.
I understand that you have received the complains from the buyer that receiving used condition products.
Please be informed that whenever we have receive the products in the fulfillment center, if its have minor issues, they will move the unit to sellable. Even if you have turned OFF the re-packaging settings also they will move to the sellable.
We apologies to hear that this could be a problem. To help you with that, I have done the following actions.
>>>>>>>>>>I have checked from my internal resources and found the return unit LPNRRXXXXXXXXX and immediately raised the TT to concern fulfillment center and
moved the unit to unfullfillable.
You can check the unfullfillable/Defective unit by using the below URL:
https://sellercentral.amazon.com/inventory/xxxxxxxxxxxxxxxxxxxx
>>>>>>>>>I have raised the complain form to the respective Fc to investigate the return order XXX-XXXXXXX-XXXXXXX;
>>>>>>>>>I understand that you would like to make your all return products to unfullfillable for the ASIN: XXXXXXXX;
In order to avoid this in future; I'd like to inform you the we have the dedicated Amazon program "Customer Returns Removal Pilot" ;
From there if they have approved, they will directly move the return unit to Unfullfillable.
>>I have personally emailed them to enable the program to the respective ASIN: XXXXXXXX;
Once that team approved; if you receive the return orders, that will directly moved the retiurned units are unfullfillable, then you can create the removal order and if you satisfy, you can send the unit to resellable.
Also if you would like to enable the program for your any ASIN's, If you are interested in participating in the program, please contact
>>>>>xxx-xxxxxxx-xxxxxx-xxxxx@amazon.com
We greatly appreciate your patience and understanding in this regard.
If you need a call back assistance please write back us, we will definitely provide the call assistance you.
>>>As as seller support, I have provided all the resolutions for this issue. But kindly do not hesitate to contact us back in the future if you feel that you need further assistance.
We value you as our seller and we want your success in selling here on amazon.
Have a great day!
Please let us know how we did."