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.

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.

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.

As a seller, you would need to do most of the work, no one is going to hand out the instructions, so be a pro and keep yourself updated. Amazon FBA fee structure is so complicated and there is so much Amazon 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! 

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.

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.

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.

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!

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.

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.

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.