Amazon FBA Reimbursement for Sellers - DataHawk Seller Guide

Amazon FBA Reimbursement for sellers

You are entitled to an Amazon reimbursement if you have been selling products using FBA. FBA (Fulfillment by Amazon) is a significant component for a majority of Amazon sellers. Amazon FBA allows the seller to store his/her inventory in Amazon’s fulfillment centers so that Amazon can pick, pack, ship, and provide customer service for the seller’s products on his/her behalf. 

This saves lots of time and effort on the seller's part. Amazon FBA helps you to make your business more efficient and it makes your products eligible for Amazon Prime. However, sellers do not always get credited for the inventory that ships through the cracks.

1. Amazon FBA inventory reimbursement policy:

If an item you send to Amazon as part of the Fulfillment by Amazon (FBA) service is lost or damaged at a facility or by a carrier operated by Amazon or on behalf of Amazon, they replace that item with a new item of the same FNSKU or reimburse the seller for it. (Amazon.com)

As a seller on Amazon, you should be aware of this feature and must know about its policies and rules, etc. Here's how we have demystified it for you.

Amazon uses the following price indicators to compare:

  • Your current list price for the item on Amazon
  • The average price at which you have sold the item on Amazon over the past 90 days
  • The average current list price for the same item by other sellers on Amazon
  • The average price at which other sellers have sold the same item over the past 365 days

And if they do not have enough information to calculate the estimated sale price of a unit using the price indicators described above, they will assign an estimated sale price based on the price of a comparable product. Amazon FBA may ask you for additional information or documentation to help determine that value.

2. Eligibility Criteria for Amazon FBA reimbursement

For an Item to be Eligible to fall under Amazon FBA Reimbursement criteria, the following are the terms and conditions, check them out:

  • The item is registered in FBA at the time it is lost or damaged.
  • The item complies with FBA product requirements and restrictions and with FBA inventory requirements.
  • You have sent us the exact items and quantities stated in your shipping plan.
  • The item is not pending disposal or was not disposed of at your request or because we have exercised a right to do so.
  • The item is not defective and was not damaged by a customer.
  • Your selling account is in normal status when you file a claim for a lost or damaged item.

3. What are the top cases for getting an Amazon FBA reimbursement?

As a seller, you would need to do most of the work, no one is going to hand out you the instructions, so be a pro and keep yourself updated. Amazon FBA fee structure is so complicated and there is so much daily sales volume happening on Amazon that these issues are bound to happen. To help you better understand the different kinds of reimbursements, we have broken them down into top categories of it, check them out! 

A. Issues with Inbound Shipments 

As a seller, you send your produce/inventory to Amazon FBA’s warehouses, and you expect it to be received properly, placed well, and processed without any problems. That is what anyone would expect because hey it’s Amazon, however, few issues can occur:

  • Missing Units: For whatever reason, Amazon may not receive or scan in all of the units that you receive. 
  • Lost or Damaged by Inbound Carrier: Sellers can find it hard to believe but the inbound carrier could accidentally lose or misplace some of your inventory. So, you have to be extra careful while selecting your inbound seller. You have to choose a popular one by others or someone who can be trusted. 
  • Stock Deducted After Shipment Closes: You might be able to see the correct number of units received by Amazon. But, in some cases, after the shipment closes some items can be deducted for unknown reasons. As a seller, you have to be active all time and keep a proper check on your produce.

Amazon FBA protects the inventory that you send under their terms of service, so if inventory goes lost or gets damaged after you send it, you are owed reimbursement for the amount.

How much is reimbursed? 

The average sales price of the item (not what you are listing it for at that time).

B. Lost and Missing Inventory

Inventory can get lost in the warehouse, how, maybe it got placed in another sellers’ inventory or it moved somewhere else somehow. It does not matter how it happened, when it happened, a matter of the fact is that it did happen. 

You are missing a number of your inventory that cannot be attributed to recent orders. Why does it happen? Largely, it happens because of the mass volume of products and orders on Amazon, this is a fairly common occurrence, lots of sellers can have a few lost units every month. 

C. Inventory can Damage

As a seller on one of the biggest eCommerce, you have to be prepared mentally for any challenge. Your FBA- house inventory can get damaged by employees (not on purpose) when they are fulfilling orders, or by carriers who are delivering customers back to the Amazon warehouse. 

Because of the volume of products, this is another common category for reimbursements. Amazon employees are also human and when you move stuff at a fast pace accidents can happen! So, it is quite natural, do not get frustrated and find a way to solve the issue. 

The list of the damaged inventory gets a place inside of Seller Central; it is also possible that Amazon will not be able to catch every instance of this occurring. Mistakes can happen. Customers can also get inventory that is slightly damaged. 3. Inventory can Damage

As a seller on one of the biggest eCommerce, you have to be prepared mentally for any challenge. Your FBA- house inventory can get damaged by employees (not on purpose) when they are fulfilling orders, or by carriers who are delivering customers back to the Amazon warehouse. 

Because of the volume of products, this is another common category for reimbursements. Amazon employees are also human and when you move stuff at a fast pace accidents can happen! So, it is quite natural, do not get frustrated and find a way to solve the issue. 

The list of the damaged inventory gets a place inside of Seller Central; it is also possible that Amazon will not be able to catch every instance of this occurring. Mistakes can happen. Customers can also get inventory that is slightly damaged. 

D. Customer Return Issues 

Out of all the Amazon FBA reimbursement categories, this is one of the most common ones. The highest number of customer issues fall under this category, and with so many returns being processed every single day, problems are unavoidable. 

  • Un-credited Restocking Fee: Amazon can charge as much as a 20 % restocking fee which they take from your account, for certain returns, not every return. After restocking they might forget to refund the same amount back to you. 
  • Double the Refund: In some cases, the customer could be refunded the wrong amount, or they could be refunded for more units than they returned. For example- a customer returned one unit and they receive reimbursement for two. 
  • Product Not Returned: Sometimes the customer can receive the correct refund amount before returning the product. 
  • Replacement Received: Similarly, in some cases, the customer can receive the replacement item but did not return the initial product. 
  • Unsellable Product: A returned product could be received unsellable, for which a seller should be reimbursed by Amazon. 
  • Return Product Not Added to Inventory: In some cases, a customer can return the product, but for one reason or another, it does not get added back to your inventory.

E. Destroyed Inventory 

If a returned product is not sellable or is damaged to an extent that cannot be used or even added back to inventory. Amazon can destroy it without your explicit permission.

Do not worry, Amazon is supposed to refund you for the same value of the item whenever such a thing happens. But, sometimes, the reimbursement never comes through. As a seller, you have to make sure that reimbursement gets processed when they are supposed to! 

 F. FBA Error Fees Charges

 Amazon FBA charges you different types of fees such as- commission fees i.e. the percentage you pay Amazon for selling in any category, storage fees, long-term storage fees, and shipping fees.

How the fee is calculated? 

All these Amazon FBA fees depend on either on the category you are selling in, how long the product has been stored at Amazon, or on the size and weight of the item. Sometimes, you might get overcharged or you could be charged the 15 % commission fee in the books category for an item in the consumer category, which is supposed to be only 8%.

This is also one of the reasons why reimbursement happens at a large rate especially if such overcharge happens for months. 

G. Error with Quantity Error

 Issues can come up with processing order quantities, a customer can receive three times even if they have only paid for two. And, most customers do not even bother to return the extra back. They just enjoy their luck.

When this happens, Amazon may not be able to discover the error on its own. As an Amazon seller, you would need to detect discrepancies in your inventory and order details.

Amazon FBA itself automatically reimburses you for such issues, but they cannot catch all of their own mistakes. That is why you need the perfect mix of inventory and order tracking software and manual account auditing on your side. You can learn more about Amazon reimbursement service.

4. How Can You Identify Your Amazon FBA Returns?

Here's a simple way to track what items have been returned.

  • Log in to Seller Central and click on reports at the top of the screen.
  • Click on the fulfillment link under reports.
  • Click on returns from the left side column.

And, to generate a Returns Report:

  • Log in to Seller Central and hover the cursor over reports at the top of the screen.
  • Click on the payments link under reports.
  • From there filter view by refund, select the time frame and click Update.
  • Now, that we know what items have been refunded to your customers, we need to find out if the item has indeed been returned.

ELEVEN step guide to help you check if the items were returned

  • Search for your refund notification email from Amazon and then copy the order number.
  • Log in to your seller central account and hover the cursor over orders at the top of the screen.
  • Now, click on the manage orders.
  • After this, click on the advanced research option.
  • Paste the order number in the search bar and click search at the bottom of the page.
  • On the next page, you’ll be able to see exactly which item was returned. From this page copy the item’s Merchant SKU or ASIN.
  • Now, on the top of the Seller Central page, hover over inventory and click on manage FBA inventory.
  • Paste the Merchant SKU or AISN in the search bar and click Search.
  • If you do not see the item you are looking for, click the radio button that states “Include Archived Items.”
  • From there you should see if your item is in your inventory (either as fulfillable or unfulfillable). Just because the item is not currently in your inventory does not mean that it was never returned to an Amazon FBA warehouse. It could have been returned to your inventory and then sold soon after. undefined
  • Contact Seller Support and open up a case. Simply ask them to look into this for you. *Currently, Amazon does not notify sellers, the last step is entirely up to you.

5. How do Amazon sellers file an Amazon FBA Reimbursement Claim?

As an Amazon seller, you might want to approach your Amazon reimbursement claims with extreme caution. Simple mistakes can lead to a negative result in your Amazon seller account getting shut down. The most important thing you should not do is to use an automated FBA reimbursement tool to try to collect your refund. Amazon policy prohibits using automated tools to open cases. 

Besides, opening up too many cases at once can result in a warning or EVEN account suspension. So this might leave you wondering, how do I get reimbursed from Amazon? We have shared the above examples and ways that you can use. 

How can you check for Amazon FBA Reimbursements!

The process to a file a claim varies by where in the fulfillment process your item is lost or damaged:

Shipment To Amazon:

This category is for claims that apply to items that are lost or damaged when you ship them to us. Once a shipment is shown as eligible for investigation on the Reconcile tab of the Summary page in your shipping workflow, you can file a claim.

Make sure you file a claim within 9 months of the verified date of shipment delivery to an Amazon fulfillment center or to a third-party facility operated on Amazon’s behalf.

After the verification of the return and also reimbursement report(to make sure you have not been reimbursed already) you can file a claim.

To submit a claim for lost units, use the Reconcile tab. To submit a claim for damaged units, open a claim through the Contact Us page in Seller Central.

Read here to access the list of documents you will need while filing a claim.

Fulfillment Center operations:

This category applies to eligible items that are lost or damaged by an Amazon FBA fulfillment center or a facility operated on behalf of Amazon after the Amazon Fulfillment Centers receive them from you. These lost or damaged items are reported in your Inventory Adjustment report.

Make sure you file a claim within 18 months of the item being reported lost or damaged in your Inventory Adjustment report.

FBA customer returns:

This category of returns applies to items lost or damaged on your FBA customer order. Amazon must already have refunded or replaced the items on behalf of your seller account. The refund process for this category works in accordance with the FBA Customer Return Policy

For the FBA customer returns kind of return you can file a customer return claim after 45 days and within 18 months after the customer refund or replacement has been processed.

Removals:

Under this kind of reimbursement, you can file a customer return claim no sooner than 45 days and no later than 18 months after the customer refund or replacement. It is important to note that the item must not have been returned to you because you violated a program policy or other terms and conditions that apply to your use of any Amazon selling service. The damage or loss must have occurred after the item left an Amazon facility.

For items lost in transit to your returns shipping address, you must submit your claim no sooner than 14 days from the last confirmed movement of your removal shipment. For items damaged in transit, you may submit your claim as soon as you receive the items. All claims must be filed within 18 months of the date the item was removed from the Amazon fulfillment network.

Make sure you verify all the required reports, that is, Removal Order Detail report, Removal Shipment Detail report & Reimbursements report before you file a claim.

Check the following page for everything you'll need while filing the Amazon FBA Reimbursement Claim.

It is important to follow the applicable process described in each of the cases above and provide all requested information when filing a claim for an Amazon FBA Reimbursement. Your claim could be declined for inappropriate or incomplete application and process.

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