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Fun fact, almost any complaint, even one extremely minor, will often make Amazon's customer support chat assistants give you a full refund. They'll even let you not worry about shipping the item back if you say you don't want to because it's not your problem.
This surely doesn't lose Amazon money at all, and definitely isn't something that works with almost any item you buy on Amazon, of nearly any value or quality. Definitely don't do this just because you want Amazon to lose money.
Worth checking to see if the thing you are getting refunded for is sold directly from Amazon or if it's from a "store". Often times the "store" could just be some bloke trying to make some money using Amazon. If you get refunded for one of those, they take it from that store, not their own coffers.
Oh yeah, of course, but sold and shipped by Amazon (or other large brands) products are still the majority though. That or dropshippers that are adding 400% markups that don't exactly have the greatest moral standing for why their crappily-made product deserves to be sold for $40.
My rule of thumb is, if it's made by a major corporation, or clearly dropshipped, and it has any physical or visual flaws that were not likely based on the listing, or not what you'd expect for the price, then it's fair game. (e.g. gloves developing significant wear within a couple weeks, color of lights not matching the tone or vibrancy in the listing, unexplained scratches/dents that raise concern over the integrity of the product, USB speeds not as fast as advertised, etc)
I don't tend to buy from small sellers on Amazon, since I buy from them elsewhere, so I've never had to deal with that dilemma myself.