diff --git a/litellm/main.py b/litellm/main.py
index 454f7f716..cdea40d11 100644
--- a/litellm/main.py
+++ b/litellm/main.py
@@ -360,7 +360,7 @@ def mock_completion(
     model: str,
     messages: List,
     stream: Optional[bool] = False,
-    mock_response: str = "This is a mock request",
+    mock_response: Union[str, Exception] = "This is a mock request",
     logging=None,
     **kwargs,
 ):
@@ -387,6 +387,20 @@ def mock_completion(
         - If 'stream' is True, it returns a response that mimics the behavior of a streaming completion.
     """
     try:
+        ## LOGGING
+        if logging is not None:
+            logging.pre_call(
+                input=messages,
+                api_key="mock-key",
+            )
+        if isinstance(mock_response, Exception):
+            raise litellm.APIError(
+                status_code=500,  # type: ignore
+                message=str(mock_response),
+                llm_provider="openai",  # type: ignore
+                model=model,  # type: ignore
+                request=httpx.Request(method="POST", url="https://api.openai.com/v1/"),
+            )
         model_response = ModelResponse(stream=stream)
         if stream is True:
             # don't try to access stream object,
diff --git a/litellm/router.py b/litellm/router.py
index 8b9fa765d..6f13554d2 100644
--- a/litellm/router.py
+++ b/litellm/router.py
@@ -1450,40 +1450,47 @@ class Router:
                 raise original_exception
             ### RETRY
             #### check if it should retry + back-off if required
-            if "No models available" in str(
-                e
-            ) or RouterErrors.no_deployments_available.value in str(e):
-                timeout = litellm._calculate_retry_after(
-                    remaining_retries=num_retries,
-                    max_retries=num_retries,
-                    min_timeout=self.retry_after,
-                )
-                await asyncio.sleep(timeout)
-            elif RouterErrors.user_defined_ratelimit_error.value in str(e):
-                raise e  # don't wait to retry if deployment hits user-defined rate-limit
+            # if "No models available" in str(
+            #     e
+            # ) or RouterErrors.no_deployments_available.value in str(e):
+            #     timeout = litellm._calculate_retry_after(
+            #         remaining_retries=num_retries,
+            #         max_retries=num_retries,
+            #         min_timeout=self.retry_after,
+            #     )
+            #     await asyncio.sleep(timeout)
+            # elif RouterErrors.user_defined_ratelimit_error.value in str(e):
+            #     raise e  # don't wait to retry if deployment hits user-defined rate-limit
 
-            elif hasattr(original_exception, "status_code") and litellm._should_retry(
-                status_code=original_exception.status_code
-            ):
-                if hasattr(original_exception, "response") and hasattr(
-                    original_exception.response, "headers"
-                ):
-                    timeout = litellm._calculate_retry_after(
-                        remaining_retries=num_retries,
-                        max_retries=num_retries,
-                        response_headers=original_exception.response.headers,
-                        min_timeout=self.retry_after,
-                    )
-                else:
-                    timeout = litellm._calculate_retry_after(
-                        remaining_retries=num_retries,
-                        max_retries=num_retries,
-                        min_timeout=self.retry_after,
-                    )
-                await asyncio.sleep(timeout)
-            else:
-                raise original_exception
+            # elif hasattr(original_exception, "status_code") and litellm._should_retry(
+            #     status_code=original_exception.status_code
+            # ):
+            #     if hasattr(original_exception, "response") and hasattr(
+            #         original_exception.response, "headers"
+            #     ):
+            #         timeout = litellm._calculate_retry_after(
+            #             remaining_retries=num_retries,
+            #             max_retries=num_retries,
+            #             response_headers=original_exception.response.headers,
+            #             min_timeout=self.retry_after,
+            #         )
+            #     else:
+            #         timeout = litellm._calculate_retry_after(
+            #             remaining_retries=num_retries,
+            #             max_retries=num_retries,
+            #             min_timeout=self.retry_after,
+            #         )
+            #     await asyncio.sleep(timeout)
+            # else:
+            #     raise original_exception
 
+            ### RETRY
+            _timeout = self._router_should_retry(
+                e=original_exception,
+                remaining_retries=num_retries,
+                num_retries=num_retries,
+            )
+            await asyncio.sleep(_timeout)
             ## LOGGING
             if num_retries > 0:
                 kwargs = self.log_retry(kwargs=kwargs, e=original_exception)
@@ -1505,34 +1512,12 @@ class Router:
                     ## LOGGING
                     kwargs = self.log_retry(kwargs=kwargs, e=e)
                     remaining_retries = num_retries - current_attempt
-                    if "No models available" in str(e):
-                        timeout = litellm._calculate_retry_after(
-                            remaining_retries=remaining_retries,
-                            max_retries=num_retries,
-                            min_timeout=self.retry_after,
-                        )
-                        await asyncio.sleep(timeout)
-                    elif (
-                        hasattr(e, "status_code")
-                        and hasattr(e, "response")
-                        and litellm._should_retry(status_code=e.status_code)
-                    ):
-                        if hasattr(e.response, "headers"):
-                            timeout = litellm._calculate_retry_after(
-                                remaining_retries=remaining_retries,
-                                max_retries=num_retries,
-                                response_headers=e.response.headers,
-                                min_timeout=self.retry_after,
-                            )
-                        else:
-                            timeout = litellm._calculate_retry_after(
-                                remaining_retries=remaining_retries,
-                                max_retries=num_retries,
-                                min_timeout=self.retry_after,
-                            )
-                        await asyncio.sleep(timeout)
-                    else:
-                        raise e
+                    _timeout = self._router_should_retry(
+                        e=original_exception,
+                        remaining_retries=remaining_retries,
+                        num_retries=num_retries,
+                    )
+                    await asyncio.sleep(_timeout)
             raise original_exception
 
     def function_with_fallbacks(self, *args, **kwargs):
@@ -1625,7 +1610,7 @@ class Router:
 
     def _router_should_retry(
         self, e: Exception, remaining_retries: int, num_retries: int
-    ):
+    ) -> Union[int, float]:
         """
         Calculate back-off, then retry
         """
@@ -1636,14 +1621,13 @@ class Router:
                 response_headers=e.response.headers,
                 min_timeout=self.retry_after,
             )
-            time.sleep(timeout)
         else:
             timeout = litellm._calculate_retry_after(
                 remaining_retries=remaining_retries,
                 max_retries=num_retries,
                 min_timeout=self.retry_after,
             )
-            time.sleep(timeout)
+        return timeout
 
     def function_with_retries(self, *args, **kwargs):
         """
@@ -1658,6 +1642,7 @@ class Router:
         context_window_fallbacks = kwargs.pop(
             "context_window_fallbacks", self.context_window_fallbacks
         )
+
         try:
             # if the function call is successful, no exception will be raised and we'll break out of the loop
             response = original_function(*args, **kwargs)
@@ -1677,11 +1662,12 @@ class Router:
             if num_retries > 0:
                 kwargs = self.log_retry(kwargs=kwargs, e=original_exception)
             ### RETRY
-            self._router_should_retry(
+            _timeout = self._router_should_retry(
                 e=original_exception,
                 remaining_retries=num_retries,
                 num_retries=num_retries,
             )
+            time.sleep(_timeout)
             for current_attempt in range(num_retries):
                 verbose_router_logger.debug(
                     f"retrying request. Current attempt - {current_attempt}; retries left: {num_retries}"
@@ -1695,11 +1681,12 @@ class Router:
                     ## LOGGING
                     kwargs = self.log_retry(kwargs=kwargs, e=e)
                     remaining_retries = num_retries - current_attempt
-                    self._router_should_retry(
+                    _timeout = self._router_should_retry(
                         e=e,
                         remaining_retries=remaining_retries,
                         num_retries=num_retries,
                     )
+                    time.sleep(_timeout)
             raise original_exception
 
     ### HELPER FUNCTIONS
@@ -1733,10 +1720,11 @@ class Router:
             )  # i.e. azure
             metadata = kwargs.get("litellm_params", {}).get("metadata", None)
             _model_info = kwargs.get("litellm_params", {}).get("model_info", {})
+
             if isinstance(_model_info, dict):
                 deployment_id = _model_info.get("id", None)
                 self._set_cooldown_deployments(
-                    deployment_id
+                    exception_status=exception_status, deployment=deployment_id
                 )  # setting deployment_id in cooldown deployments
             if custom_llm_provider:
                 model_name = f"{custom_llm_provider}/{model_name}"
@@ -1796,9 +1784,15 @@ class Router:
                 key=rpm_key, value=request_count, local_only=True
             )  # don't change existing ttl
 
-    def _set_cooldown_deployments(self, deployment: Optional[str] = None):
+    def _set_cooldown_deployments(
+        self, exception_status: Union[str, int], deployment: Optional[str] = None
+    ):
         """
         Add a model to the list of models being cooled down for that minute, if it exceeds the allowed fails / minute
+
+        or
+
+        the exception is not one that should be immediately retried (e.g. 401)
         """
         if deployment is None:
             return
@@ -1815,7 +1809,20 @@ class Router:
             f"Attempting to add {deployment} to cooldown list. updated_fails: {updated_fails}; self.allowed_fails: {self.allowed_fails}"
         )
         cooldown_time = self.cooldown_time or 1
-        if updated_fails > self.allowed_fails:
+
+        if isinstance(exception_status, str):
+            try:
+                exception_status = int(exception_status)
+            except Exception as e:
+                verbose_router_logger.debug(
+                    "Unable to cast exception status to int {}. Defaulting to status=500.".format(
+                        exception_status
+                    )
+                )
+                exception_status = 500
+        _should_retry = litellm._should_retry(status_code=exception_status)
+
+        if updated_fails > self.allowed_fails or _should_retry == False:
             # get the current cooldown list for that minute
             cooldown_key = f"{current_minute}:cooldown_models"  # group cooldown models by minute to reduce number of redis calls
             cached_value = self.cache.get_cache(key=cooldown_key)
diff --git a/litellm/tests/conftest.py b/litellm/tests/conftest.py
index 4cd277b31..8c2ce781f 100644
--- a/litellm/tests/conftest.py
+++ b/litellm/tests/conftest.py
@@ -19,6 +19,7 @@ def setup_and_teardown():
         0, os.path.abspath("../..")
     )  # Adds the project directory to the system path
     import litellm
+    from litellm import Router
 
     importlib.reload(litellm)
     import asyncio
diff --git a/litellm/tests/test_router.py b/litellm/tests/test_router.py
index 7520ac75f..2d277d749 100644
--- a/litellm/tests/test_router.py
+++ b/litellm/tests/test_router.py
@@ -104,6 +104,42 @@ def test_router_timeout_init(timeout, ssl_verify):
         )
 
 
+@pytest.mark.parametrize("sync_mode", [False, True])
+@pytest.mark.asyncio
+async def test_router_retries(sync_mode):
+    """
+    - make sure retries work as expected
+    """
+    model_list = [
+        {
+            "model_name": "gpt-3.5-turbo",
+            "litellm_params": {"model": "gpt-3.5-turbo", "api_key": "bad-key"},
+        },
+        {
+            "model_name": "gpt-3.5-turbo",
+            "litellm_params": {
+                "model": "azure/chatgpt-v-2",
+                "api_key": os.getenv("AZURE_API_KEY"),
+                "api_base": os.getenv("AZURE_API_BASE"),
+                "api_version": os.getenv("AZURE_API_VERSION"),
+            },
+        },
+    ]
+
+    router = Router(model_list=model_list, num_retries=2)
+
+    if sync_mode:
+        router.completion(
+            model="gpt-3.5-turbo",
+            messages=[{"role": "user", "content": "Hey, how's it going?"}],
+        )
+    else:
+        await router.acompletion(
+            model="gpt-3.5-turbo",
+            messages=[{"role": "user", "content": "Hey, how's it going?"}],
+        )
+
+
 @pytest.mark.parametrize(
     "mistral_api_base",
     [
@@ -1118,6 +1154,7 @@ def test_consistent_model_id():
     assert id1 == id2
 
 
+@pytest.mark.skip(reason="local test")
 def test_reading_keys_os_environ():
     import openai
 
@@ -1217,6 +1254,7 @@ def test_reading_keys_os_environ():
 # test_reading_keys_os_environ()
 
 
+@pytest.mark.skip(reason="local test")
 def test_reading_openai_keys_os_environ():
     import openai
 
diff --git a/litellm/tests/test_router_debug_logs.py b/litellm/tests/test_router_debug_logs.py
index 78b3b4470..9c0a76fc7 100644
--- a/litellm/tests/test_router_debug_logs.py
+++ b/litellm/tests/test_router_debug_logs.py
@@ -46,6 +46,7 @@ def test_async_fallbacks(caplog):
     router = Router(
         model_list=model_list,
         fallbacks=[{"gpt-3.5-turbo": ["azure/gpt-3.5-turbo"]}],
+        num_retries=1,
     )
 
     user_message = "Hello, how are you?"
@@ -82,6 +83,7 @@ def test_async_fallbacks(caplog):
     # - error request, falling back notice, success notice
     expected_logs = [
         "litellm.acompletion(model=gpt-3.5-turbo)\x1b[31m Exception OpenAIException - Error code: 401 - {'error': {'message': 'Incorrect API key provided: bad-key. You can find your API key at https://platform.openai.com/account/api-keys.', 'type': 'invalid_request_error', 'param': None, 'code': 'invalid_api_key'}}\x1b[0m",
+        "litellm.acompletion(model=None)\x1b[31m Exception No deployments available for selected model, passed model=gpt-3.5-turbo\x1b[0m",
         "Falling back to model_group = azure/gpt-3.5-turbo",
         "litellm.acompletion(model=azure/chatgpt-v-2)\x1b[32m 200 OK\x1b[0m",
     ]
diff --git a/litellm/tests/test_router_fallbacks.py b/litellm/tests/test_router_fallbacks.py
index f2efa70dd..7027050e1 100644
--- a/litellm/tests/test_router_fallbacks.py
+++ b/litellm/tests/test_router_fallbacks.py
@@ -22,10 +22,10 @@ class MyCustomHandler(CustomLogger):
     def log_pre_api_call(self, model, messages, kwargs):
         print(f"Pre-API Call")
         print(
-            f"previous_models: {kwargs['litellm_params']['metadata']['previous_models']}"
+            f"previous_models: {kwargs['litellm_params']['metadata'].get('previous_models', None)}"
         )
-        self.previous_models += len(
-            kwargs["litellm_params"]["metadata"]["previous_models"]
+        self.previous_models = len(
+            kwargs["litellm_params"]["metadata"].get("previous_models", [])
         )  # {"previous_models": [{"model": litellm_model_name, "exception_type": AuthenticationError, "exception_string": <complete_traceback>}]}
         print(f"self.previous_models: {self.previous_models}")
 
@@ -127,7 +127,7 @@ def test_sync_fallbacks():
         response = router.completion(**kwargs)
         print(f"response: {response}")
         time.sleep(0.05)  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4
 
         print("Passed ! Test router_fallbacks: test_sync_fallbacks()")
         router.reset()
@@ -140,7 +140,7 @@ def test_sync_fallbacks():
 
 @pytest.mark.asyncio
 async def test_async_fallbacks():
-    litellm.set_verbose = False
+    litellm.set_verbose = True
     model_list = [
         {  # list of model deployments
             "model_name": "azure/gpt-3.5-turbo",  # openai model name
@@ -209,12 +209,13 @@ async def test_async_fallbacks():
     user_message = "Hello, how are you?"
     messages = [{"content": user_message, "role": "user"}]
     try:
+        kwargs["model"] = "azure/gpt-3.5-turbo"
         response = await router.acompletion(**kwargs)
         print(f"customHandler.previous_models: {customHandler.previous_models}")
         await asyncio.sleep(
             0.05
         )  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except litellm.Timeout as e:
         pass
@@ -258,7 +259,6 @@ def test_sync_fallbacks_embeddings():
         model_list=model_list,
         fallbacks=[{"bad-azure-embedding-model": ["good-azure-embedding-model"]}],
         set_verbose=False,
-        num_retries=0,
     )
     customHandler = MyCustomHandler()
     litellm.callbacks = [customHandler]
@@ -269,7 +269,7 @@ def test_sync_fallbacks_embeddings():
         response = router.embedding(**kwargs)
         print(f"customHandler.previous_models: {customHandler.previous_models}")
         time.sleep(0.05)  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except litellm.Timeout as e:
         pass
@@ -323,7 +323,7 @@ async def test_async_fallbacks_embeddings():
         await asyncio.sleep(
             0.05
         )  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except litellm.Timeout as e:
         pass
@@ -394,7 +394,7 @@ def test_dynamic_fallbacks_sync():
             },
         ]
 
-        router = Router(model_list=model_list, set_verbose=True, num_retries=0)
+        router = Router(model_list=model_list, set_verbose=True)
         kwargs = {}
         kwargs["model"] = "azure/gpt-3.5-turbo"
         kwargs["messages"] = [{"role": "user", "content": "Hey, how's it going?"}]
@@ -402,7 +402,7 @@ def test_dynamic_fallbacks_sync():
         response = router.completion(**kwargs)
         print(f"response: {response}")
         time.sleep(0.05)  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except Exception as e:
         pytest.fail(f"An exception occurred - {e}")
@@ -488,7 +488,7 @@ async def test_dynamic_fallbacks_async():
         await asyncio.sleep(
             0.05
         )  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except Exception as e:
         pytest.fail(f"An exception occurred - {e}")
@@ -573,7 +573,7 @@ async def test_async_fallbacks_streaming():
         await asyncio.sleep(
             0.05
         )  # allow a delay as success_callbacks are on a separate thread
-        assert customHandler.previous_models == 1  # 0 retries, 1 fallback
+        assert customHandler.previous_models == 4  # 1 init call, 2 retries, 1 fallback
         router.reset()
     except litellm.Timeout as e:
         pass
diff --git a/litellm/tests/test_router_retries.py b/litellm/tests/test_router_retries.py
new file mode 100644
index 000000000..3ed08dfd9
--- /dev/null
+++ b/litellm/tests/test_router_retries.py
@@ -0,0 +1,121 @@
+#### What this tests ####
+#    This tests calling router with fallback models
+
+import sys, os, time
+import traceback, asyncio
+import pytest
+
+sys.path.insert(
+    0, os.path.abspath("../..")
+)  # Adds the parent directory to the system path
+
+import litellm
+from litellm import Router
+from litellm.integrations.custom_logger import CustomLogger
+
+
+class MyCustomHandler(CustomLogger):
+    success: bool = False
+    failure: bool = False
+    previous_models: int = 0
+
+    def log_pre_api_call(self, model, messages, kwargs):
+        print(f"Pre-API Call")
+        print(
+            f"previous_models: {kwargs['litellm_params']['metadata'].get('previous_models', None)}"
+        )
+        self.previous_models = len(
+            kwargs["litellm_params"]["metadata"].get("previous_models", [])
+        )  # {"previous_models": [{"model": litellm_model_name, "exception_type": AuthenticationError, "exception_string": <complete_traceback>}]}
+        print(f"self.previous_models: {self.previous_models}")
+
+    def log_post_api_call(self, kwargs, response_obj, start_time, end_time):
+        print(
+            f"Post-API Call - response object: {response_obj}; model: {kwargs['model']}"
+        )
+
+    def log_stream_event(self, kwargs, response_obj, start_time, end_time):
+        print(f"On Stream")
+
+    def async_log_stream_event(self, kwargs, response_obj, start_time, end_time):
+        print(f"On Stream")
+
+    def log_success_event(self, kwargs, response_obj, start_time, end_time):
+        print(f"On Success")
+
+    async def async_log_success_event(self, kwargs, response_obj, start_time, end_time):
+        print(f"On Success")
+
+    def log_failure_event(self, kwargs, response_obj, start_time, end_time):
+        print(f"On Failure")
+
+
+"""
+Test sync + async 
+
+- Authorization Errors 
+- Random API Error 
+"""
+
+
+@pytest.mark.parametrize("sync_mode", [True, False])
+@pytest.mark.parametrize("error_type", ["Authorization Error", "API Error"])
+@pytest.mark.asyncio
+async def test_router_retries_errors(sync_mode, error_type):
+    """
+    - Auth Error -> 0 retries
+    - API Error -> 2 retries
+    """
+
+    _api_key = (
+        "bad-key" if error_type == "Authorization Error" else os.getenv("AZURE_API_KEY")
+    )
+    print(f"_api_key: {_api_key}")
+    model_list = [
+        {
+            "model_name": "azure/gpt-3.5-turbo",  # openai model name
+            "litellm_params": {  # params for litellm completion/embedding call
+                "model": "azure/chatgpt-functioncalling",
+                "api_key": _api_key,
+                "api_version": os.getenv("AZURE_API_VERSION"),
+                "api_base": os.getenv("AZURE_API_BASE"),
+            },
+            "tpm": 240000,
+            "rpm": 1800,
+        },
+    ]
+
+    router = Router(model_list=model_list, allowed_fails=3)
+
+    customHandler = MyCustomHandler()
+    litellm.callbacks = [customHandler]
+    user_message = "Hello, how are you?"
+    messages = [{"content": user_message, "role": "user"}]
+
+    kwargs = {
+        "model": "azure/gpt-3.5-turbo",
+        "messages": messages,
+        "mock_response": (
+            None
+            if error_type == "Authorization Error"
+            else Exception("Invalid Request")
+        ),
+    }
+
+    try:
+        if sync_mode:
+            response = router.completion(**kwargs)
+        else:
+            response = await router.acompletion(**kwargs)
+    except Exception as e:
+        pass
+
+    await asyncio.sleep(
+        0.05
+    )  # allow a delay as success_callbacks are on a separate thread
+    print(f"customHandler.previous_models: {customHandler.previous_models}")
+
+    if error_type == "Authorization Error":
+        assert customHandler.previous_models == 0  # 0 retries
+    else:
+        assert customHandler.previous_models == 2  # 2 retries