Do Amazon FBA fees cover returns handling if my buyers return items to Amazon?

No, Aamzon FBA fees do not cover returns. It is paid separately as the seller you'll be charged the shipping fee for the returned product, restocking fee and a returns processing fee. The returns processing fee is the same as the FBA fulfillment fee. It is charged for items in the watches, jewelry, luggage, apparel, shoes, handbags, and sunglasses categories.