As an Amazon FBA seller, you rely on Amazon’s fulfillment centers to store and ship your products to customers. While for the most part, everything works out great, there is a chance Amazon can mess some things up when handling your inventory.
A common issue that many sellers face is Amazon losing or damaging their inventory – and the question always is, “How can I get reimbursed for this?”
As a seller, it can be frustrating when inventory is lost or damaged because it takes away from your sales. Not only that, you lose out on keyword ranking and potential customer reviews.
Fortunately, when something like that happens, Amazon offers reimbursements to sellers for the lost or damaged inventory – but sometimes, you need to file a claim with Amazon to get your money back.
In this article, we’ll discuss the ins and outs of Amazon FBA reimbursements and how sellers can recoup money owed to them.
- What are Amazon refunds for FBA sellers?
- How to file an Amazon reimbursement claim
- How does Amazon calculate reimbursement value?
What are Amazon refunds for FBA sellers?
Amazon FBA reimbursements are payments made to sellers for lost or damaged inventory that occurs while it is stored in Amazon’s fulfillment centers. Amazon’s FBA program is designed to make selling on the platform easier for sellers by allowing them to outsource their inventory storage and order fulfillment.
However, even with Amazon’s top-notch logistics network, lost or damaged inventory can occur. When it does, Amazon will reimburse the seller for the lost or damaged inventory.
If sellers aren’t aware that some of their inventory has either gone missing or has been damaged during transit or while in Amazon’s fulfillment centers, they could be missing out on hundreds or even thousands of dollars.
In many cases, Amazon will automatically issue a reimbursement when something like this occurs, but sellers will need to proactively look and file a claim with Amazon in other cases.
READ MORE | Amazon Inventory Management 2023 Guide
Types of Amazon FBA lost inventory claims
You can file several reimbursement claims with Amazon (according to their FBA inventory reimbursement policy) regarding any lost or damaged inventory. The process to file a claim with Amazon depends on where your items were lost or damaged in the fulfillment or storage process.
These are the types of Amazon FBA lost inventory claims:
Shipment to Amazon claim. If your products were lost or damaged during transit to Amazon’s fulfillment centers, you may be eligible for a reimbursement. Before submitting a claim, Amazon will require additional documentation such as shipment ID, proof of ownership, and tracking information.
Fulfillment center operations claim. If your products were lost or damaged by an Amazon fulfillment center or a facility operated on behalf of Amazon, you can file a claim for reimbursement.
FBA customer returns claim. If your inventory was lost, damaged, or not returned, you may be eligible for a customer return reimbursement. In order to file this type of claim, Amazon must already have refunded or replaced the items on behalf of your seller account.
Removal claims. If your items were lost or damaged by Amazon or a carrier used by Amazon while removing your inventory from a fulfillment center to your returns shipping address, you may be eligible for reimbursement.
Amazon FBA seller refund eligibility
To be eligible for an inventory reimbursement, you must follow the criteria laid out by Amazon:
- 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 Amazon the exact items and quantities stated in your shipping plan.
- The shipment for the item is not in canceled or deleted status.
- The item is not pending disposal or was not disposed of at your request or because Amazon has exercised a right to do so.
- The item is not defective and was not damaged by a customer.
- When a lost or damaged item claim is filed, under review, and during any appeals, the seller’s account must be in normal status.
How to file an Amazon reimbursement claim
If you found that Amazon has lost or damaged your inventory, you can then file a claim for reimbursement.
Note that Amazon tells sellers exactly how to submit a claim, for each claim type, on their FBA inventory reimbursement policy help page.
Submitting a ‘shipment to Amazon’ claim
This is the process you must take to submit a claim to Amazon about missing inventory in your FBA shipment.
Before you submit an Amazon claim
Before submitting a claim for lost or damaged inventory, make sure you review the following first:
- Units. Confirm that the shipment’s contents and the number of units are the same as in the shipping plan you created.
- Contents. Check the Contents tab in your shipping plan to get detailed information about any discrepancies between your shipping plan and what the fulfillment center received.
- Reimbursements. Check your Reimbursements report to see if you have already been reimbursed for the lost or damaged item.
If Amazon has not automatically reimbursed you for lost inventory or notice any discrepancies, you can submit a claim.
In this case, Amazon has lost some units of our FBA shipment, let’s go over how to find this information in Seller Central.
In Seller Central, go to the Inventory tab and click on Shipments. You will be taken to your shipping queue.
In your shipping queue, you will see a column titled Units expected (units located.) If there is a difference between the two, go into that particular shipment.
We found a shipment that received less inventory than expected.
Under the “Contents” tab, you will see if there are any discrepancies and will have an option to complete an action.
In this case, we will choose “research missing units” to see if Amazon can find them. If not, Amazon will reimburse us.
Before you are able to submit the claim, you must provide Amazon with documentation regarding your shipment.
If Amazon determines that the claim is valid, they will either replace the lost or damaged item with a new item of the same FNSKU or they will reimburse you.
To open a claim for damaged units, Amazon says to contact Seller Support.
Submitting a claim for lost or damaged items in Amazon’s fulfillment centers
To submit a fulfillment center operations claim, it will look a little different than the example above.
Before you submit a claim
Before submitting a claim for lost or damaged inventory in the fulfillment center, make sure you check the following first:
- Check your Inventory Adjustments report. Confirm the date and adjustment code of the loss or damage to your items.
- Check your Manage FBA Inventory report. Confirm that the lost or damaged item was not found or restored to your inventory in a sellable condition or in a damaged condition for which Amazon was not at fault (for example, the item was defective).
- Check your Reimbursements report. See if you have already been reimbursed for the lost or damaged item. Search by FNSKU and date to filter the results.
You must first review and reconcile the above reports before submitting a claim to Amazon as it is likely that Amazon has already refunded you. If you’ve gone through these reports and still believe Amazon owes you money, you may submit a claim.
For damaged items, you will need to provide Amazon with the transaction ID which can be found in the Inventory Adjustments report.
For lost items, you must provide Amazon with the FNSKU of the item missing.
To submit claims for lost or damaged items, you can open a case with Seller Support or use the tools found on the Fulfillment center operations claim help page.
How does Amazon calculate the reimbursement value?
If Amazon finds that your reimbursement claims are valid, how much will they actually reimburse you per unit?
Here is what Amazon states:
“Because item prices tend to fluctuate over time and may vary widely from seller to seller, we compare several price indicators to determine an estimated sale price for the item when calculating the reimbursement amount.”
Here are the factors Amazon considers when calculating reimbursement value:
- Historical price. The median price at which you and other sellers have sold the item on Amazon over the past 18 months.
- Current price. The current list price you and other competitors have set for the same item on Amazon or the mean list price if you (and competitors) have multiple listings for the same item.
If that information is insufficient, Amazon assigns an estimated sale price based on that of a similar product. They may reach out for more documentation to calculate the final value.
If Amazon reimburses you for a shipment to Amazon claim, they’ll reimburse you for “the estimated proceeds of a sale of that item.”
Does Amazon owe you money?
To maximize Amazon FBA seller refunds, sellers should keep detailed records of their inventory and shipments. This includes keeping track of the products that are sent to Amazon’s fulfillment centers, the quantity of each product, and the date of shipment.
Additionally, sellers should regularly review their FBA inventory reports to ensure that all inventory is accounted for.
We hope this article gave you a better understanding of why Amazon may lose or damage inventory and how to make sure you get reimbursed for your inventory.
Do you have any more questions? Let us know in the comments.
Want to learn more about how you can use Jungle Scout to launch, grow, and run your Amazon business? Click the “Learn More” button below!