Amazon FBA Reimbursement: How It Works in 2021?
Unfortunately, every month Amazon or their courier partners accidentally lose or damage your items. In some cases, Amazon refunds the customer, but your item never returns to the warehouse. However, Amazon FBA reimbursement policies ensure sellers get compensated for these mistakes.
According to Amazon, if your lost or damaged inventory is part of the Fulfillment by Amazon (FBA) service, Amazon replaces that item with a new one or reimburses you for it. However, the fact is that Amazon misses a significant number of reimbursements, and sellers have to monitor that they receive their money back manually.
In this article, we look at how to determine your reimbursement according to Amazon FBA reimbursement policies and file a reimbursement claim. Let’s get your money back!
Table of Contents
- 1 The Different Types of Amazon FBA Reimbursements
- 2 How to Determine How Much Amazon Owes You?
The Different Types of Amazon FBA Reimbursements
You can claim reimbursement from Amazon regarding your lost or damaged inventory. There are many situations where you are entitled to a reimbursement. However, the most common reasons for lost and damaged inventory are related to the following aspects of the FBA process.
Lost or Damaged Inventory During Shipping or at Warehouse
Your inventory may go missing, and unfortunately, the reason is not always clear. For instance, the inbound courier that handles the shipment from your location to one of the Amazon fulfillment centers might accidentally damage or lose your items. In some other cases Amazon team at the warehouse checks in only half of your shipped units.
Your goods’ shipment might go off without a hitch, and Amazon receives your inventory at the warehouse. However, for whatever reason, they might lose your units afterward. Occasionally, Amazon even destroys your items without permission or acknowledging you. Typically, this happens when they think the item is significantly damaged and unsellable.
Amazon wants to protect its customers at all costs and continuously puts effort into enhancing the customer experience. As a result, Amazon is rapid to refund the buyer, and unfortunately, some customers take advantage of this.
There are many ways how this can cause harm to the seller. Typically, the customer may return a completely different item or the in an unsellable condition. In other cases, the customer may return only an empty box. However, customers aren’t always to blame for problems involving returns. Occasionally, the Amazon employees fail to add the returned item back to your inventory.
Incorrect FBA Fees
If you sell on Amazon, you should be familiar with the costs, especially the FBA selling fees. Despite the expenses, the FBA program offers Amazon sellers various benefits for shipping and inventory management. However, if you’re not careful, you could end up paying for more than you should.
You should monitor two main things to ensure that you aren’t overpaying for anything: product category and product dimension. Amazon charges you a referral fee for your product that varies by category. However, if Amazon miscategorizes your inventory and charges the referral fees incorrectly, you can claim reimbursement.
Another reason for overcharged fees is incorrectly measured items. When Amazon receives your inventory, they use Cubiscan to determine its dimensions and weight. Even though this automated machine is mostly accurate, an irregularly bulging package might cause an error that places your item into a higher size category. If Amazon classifies a standard size item as over-size, it can have big implications on your FBA fees.
How to Determine How Much Amazon Owes You?
Let’s look at how to audit your inventory for products that Amazon has lost or damaged.
Reimbursements for Lost and Damaged FBA Inventory
As mentioned before, missing inventory is a common reason for compensation, but how to get reimbursed for Amazon FBA lost or damaged inventory?
The first thing to do is to get the Inventory Adjustments report from Seller Central. It shows the history of adjustments to your inventory in response to issues such as disposition changes, misplaced inventory, found inventory, and ownership corrections. You can download either a .csv or a .txt file that contains 18 months’ worth of inventory data.
To get the report, take the following steps:
- Log in to your Seller Central account.
- Go to Reports → Fulfillment → Inventory Adjustments.
- Request either .csv Download or Request .txt Download
- Save the file to your computer.
- After you’ve downloaded the file, you need a program such as Microsoft Excel to view the data and interpret it.
How to Read The Inventory Report?
The file that you download looks something like the image below.
When you have the report, pay careful attention to the note under the “Reason” column. Amazon has a list of adjustment reason codes such as letters and numbers that give you a better understanding of what exactly happened to your inventory. The type shows whether an adjustment is an increase or decrease to your inventory level.
However, for FBA reimbursements, the most important codes to remember are E and M. Those exact codes represent inventory that Amazon has lost or damaged. As a seller, you are eligible to claim reimbursement.
Claiming FBA Reimbursement for Lost Inventory
The next step is to open a new case within Amazon Seller Central and claim FBA reimbursement. At this point, some people just send the entire file to Amazon and hope they would do the hard work for them. However, sending a lot of meaningless data to Amazon does not lead to efficient reimbursement results.
Sorting the data before sending it may speed up the process. However, figuring out what Amazon has reimbursed you for can be tricky. Instead of downloading a file, Amazon also enables you to view Inventory Adjustments Report online, allowing you to filter the data by reason group.
After finding the relevant information, navigate to “Contact us” page on Seller Central and raise an FBA issue with lost and damaged item data attached. After you submit the case, Amazon gets back to you within 12 hours and reimburses the amount within 5 to 10 business days.
Reimbursement on Amazon FBA Customer Returns
When customers request a return, Amazon tends to refund them immediately, regardless of whether they actually return the item. Typically, you receive a confirmation from the refund and a second one after the item has arrived back at the Amazon warehouse.
From the FBA returns report you can monitor the state of customer returns. If the report shows that the return has started, it means Amazon has refunded the customer, but your items have not been received back yet.
However, sometimes your inventory might never find its way back to the Amazon warehouse. If it has been more than 45 days since the customer initiated the return and Amazon hasn’t refunded your items, you need to raise an FBA reimbursement claim.
FBA Reimbursement for Incorrectly Measured Items
Amazon scans the inventory that you send to the fulfillment centers. Occasionally, these Cubiscans incorrectly measure your product because of an irregular bulge in the package. As a result, your item is classified into a higher size category, and Amazon overcharges the FBA fees.
To prevent this, you need to monitor Amazon’s CubiScan dimensions of your product. Typically, you input your ASIN into the Amazon FBA fee calculator and compare the fees to detect any irregularity. If you notice any, you have to ask Amazon to remeasure the item. Keep in mind that you can only have an item remeasured once every 6 months.
After remeasuring the inventory, Amazon reimburses you for previously overcharged FBA fees. However, make sure that you receive your reimbursement from Amazon.
Tools for Amazon FBA Reimbursement
Monitoring and filing for reimbursements manually take a lot of time and effort. Like most aspects of selling on Amazon, there is a solution to ease getting Amazon FBA reimbursements process.
Amazon reimbursement software such as Eva Reimbursement offers an easier way to get refunds. Eva audits all your FBA sales, transactions, shipments, refunds, reimbursements and inventory data, detects potential FBA reimbursement cases using artificial intelligence technology. And an expert case management team will manage the whole claim process for you and maximize your Amazon reimbursement based on Amazon FBA reimbursement policies. Instead of sending pointless reports to Amazon, the software picks the relevant information. You can claim FBA reimbursement with more certainty and 50% faster.
After filing the claim, the reimbursement appears in your account 4-5 days after Amazon approves it. Moreover, you can inspect all your refunds from the reimbursement report, including those requested by you and those generated automatically.
The Amazon FBA program is beneficial for thousands of entrepreneurs all over the world. However, despite Amazon making the process easier, sometimes mistakes are bound to happen.
Along with this convenience comes the need to regularly monitor the correctness of the fees that Amazon charges you. However, by following these methods and trusting a helpful tool such as Eva Reimbursement, you can claim back hundreds from Amazon.
What are you waiting for? Sign up and get your FBA reimbursements!