As an Amazon seller, few things are more frustrating than finding your hard-earned profits deducted from your account balance. Whether due to damaged inventory, customer returns, or Amazon‘s own errors, you can end up losing money through no fault of your own.
The good news? You can recover those funds through Amazon reimbursement claims.
An Amazon reimbursement is a payment made to sellers as compensation for losses incurred while using the Amazon Fulfillment by Amazon (FBA) program. By filing claims, you can get reimbursed for inventory that was lost, damaged, or returned through no fault of your own. Reimbursements help Amazon sellers recoup significant sums each year.
But the reimbursement process can be confusing if you don‘t understand how it works.
In this comprehensive guide, I‘ll walk you through everything you need to know as an Amazon seller to get back the money you deserve.
Overview: How Amazon Reimbursements Work
Before diving into specifics, let’s quickly recap the difference between refunds and reimbursements:
- Refunds go to buyers when they return items. The funds are credited back to the customer.
Reimbursements go to sellers to compensate for losses from damaged, lost, or returned items. Sellers have to file claims to get paid.
Here is a simplified overview of the reimbursement process on Amazon from the seller perspective:
- A return or loss occurs, triggering a deduction from your account.
You file a reimbursement claim with Amazon to recover your costs.
Amazon reviews your claim and determines if you qualify for reimbursement.
If approved, funds are credited back into your Amazon seller account.
Seems simple enough, right? But the details can get more complicated, especially if you want to maximize your legitimate reimbursement amounts.
So let’s dive into the specifics…
Amazon Reimbursement Eligibility Explained
The first step is understanding which types of inventory issues and losses qualify for Amazon FBA reimbursement.
Amazon has strict requirements for reimbursement eligibility. To qualify, your items must meet the following criteria:
- Enrolled in Amazon FBA at the time of damage/loss
- Compliant with Amazon’s product requirements
- Meet Amazon’s FBA inventory preparation standards
- Match quantities on your FBA shipment plan
- Not pending disposal or discarded at your request
- Not considered defective per Amazon’s criteria
- Damage can‘t be result of customer misuse
- Your seller account must be in good standing
Examples of Ineligible Situations:
- Expired products or prohibited items
- Inventory shipped without approval
- Items not matching condition described when sent to FBA
- Products deemed defective by Amazon
- Customer caused damage due to misuse
Bottom line: Thoroughly review Amazon‘s eligibility criteria so you understand what types of losses qualify for reimbursement – and which don‘t.
Submitting claims for ineligible items will only lead to rejections and wasted time. Make sure you have read and understand Amazon‘s reimbursement policies inside and out.
Amazon’s Reimbursement Policy Rules and Limitations
In addition to the eligibility requirements, Amazon enforces strict policies that govern reimbursements:
- Additional documentation may be required during re-evaluation of a rejected claim. This can include invoices, photos, shipping details, and other proofs.
Amazon may reverse reimbursement if inventory is later found or if erroneous payment is made. You are liable to repay any incorrect amounts.
No reimbursement for prohibited, expired, or hazardous materials. Don‘t attempt to file claims on ineligible inventory.
Claims must include required details like ASIN, average sales price, order IDs, etc. Failing to provide documentation can lead to denials.
Only one reimbursement request can be in process at a time per inventory item. Don‘t flood Amazon with multiple concurrent requests.
Amazon reserves the right to dispose of or resell any reimbursed inventory. They may reclaim or liquidate items already reimbursed as needed.
Claims must be submitted within 180 days. You only have 6 months to file for any losses. After that, you are no longer eligible.
The takeaway? You need to follow all of Amazon‘s reimbursement rules to the letter. Skipping steps or failing to provide adequate documentation is the fastest way to get claims rejected and lose money.
The Most Common Types of Reimbursement Claims
Now that you know which items qualify and Amazon’s rules, let’s examine some of the most common situations where Amazon sellers can (and should) file for reimbursement.
1. Lost or Damaged Inventory in Amazon Warehouses
Despite Amazon‘s state-of-the-art fulfillment centers, inventory losses and damage still happen. According to one survey, 21% of FBA sellers experienced lost or damaged inventory in Amazon warehouses.
Misplaced items, mixing with other seller‘s stock, or accidents during handling can all lead to lost or damaged inventory. When this inventory belongs to you, make sure to file reimbursement claims for any provable losses.
2. Damage During Shipping
Ecommerce orders are skyrocketing, with Amazon shipping over 5 billion packages worldwide in 2020 alone. With this volume, damages are inevitable.
When picking and packing orders for customers, accidents happen, resulting in damaged products. Returns from customers can also get harmed in transit on the way back to Amazon fulfillment centers.
You have the right to claim reimbursement for any FBA items damaged by Amazon or carriers during shipping and handling. Don‘t let these losses eat into your bottom line.
3. Customer Returns
Customer returns are a fact of life when selling on Amazon. However, there are situations where returns can cause you to be owed reimbursement:
- Customer received refund but never returned item
- Customer returned a different/wrong item
- Amazon failed to properly document and process return
- You were issued an incorrect refund amount
- Restocking fees weren‘t properly credited
In 2020, customers returned over $60 billion worth of merchandise to Amazon worldwide. Don‘t leave money on the table if returns weren‘t handled properly.
4. Incorrect Order Quantities
Despite Amazon‘s automated systems, order fulfillment mistakes still occur. Customers may receive extra items shipped to them that exceed what was ordered.
Often the customer won‘t return these or Amazon won‘t catch the error. Reimbursement claims help you recover the cost of any incorrect additional units.
5. Overcharged Amazon Fees
Sellers pay a range of fees to Amazon, including referral fees, FBA fees, storage fees, and more. With numerous fee types, it‘s easy for Amazon to occasionally charge you incorrectly.
Watch out for situations where you get charged fees on items that shouldn‘t incur them. Don‘t let unfair fees eat into your profits. Request reimbursement for any demonstrably incorrect or overcharged fees.
Step-By-Step: How to File Amazon Reimbursement Claims
Now that you know what types of inventory issues typically qualify for reimbursement, let‘s look at the actual process of submitting claims.
Follow these steps based on the reason for your reimbursement request:
For Lost or Damaged Inventory:
- Regularly review your FBA inventory and shipment reports to identify any discrepancies.
Verify the shipment delivery dates are within 9 months (the 180 day claim window).
Check the ‘Reconcile’ tab in your shipment workflow for mismatches between shipped and received units.
Confirm quantities in the original shipment plan match what is reflected in current reports.
Use the ‘Reconcile’ tab to file claims for any missing units.
For damaged items, use the ‘Contact Us’ page and provide supporting documentation like photos.
Have your Amazon shipment ID, invoice, or other delivery proof handy to support your claim.
For Customer Returns:
Check the ‘Manage Returns’ report within 45 days of the return request.
Verify whether you already received automatic reimbursement for the return.
Provide the customer order ID number and any other relevant details.
Submit your claim through the Online Return Center and wait for Amazon‘s review.
For Other Reimbursements:
Carefully review your Inventory Adjustments and other FBA reports to identify discrepancies.
Verify key details like order numbers, amounts, dates, and fees charged.
Check your Reimbursements report to confirm you haven‘t already been reimbursed.
Use the specific transaction ID or other identifiers when submitting your claim.
Follow up regularly on claim status after submitting to ensure Amazon processes it.
Pro Tip: Create reimbursement templates for efficiency and enter claims in batches. Just make sure you provide the required documentation and follow each one up closely.
How to Streamline and Simplify the Reimbursement Process
I won’t sugarcoat it – filing Amazon reimbursement requests can be time consuming and tedious. Here are some tips to help make the process smoother:
- Avoid using automated bots to submit claims – Amazon‘s systems will flag this activity.
Create templates for your most common claim types to save time re-entering data.
Follow up regularly on claims to ensure Amazon is acknowledging and processing them.
Optimize inventory management and shipments to minimize errors and losses.
Double check order details like addresses and quantities to reduce mistakes.
Use reimbursement software to simplify reporting and automate claim creation.
Consider outsourcing reimbursement management to an expert agency.
The #1 goal should be staying organized with your inventory records. This will minimize losses and delays in getting reimbursed.
Amazon Reimbursement Mistakes to Avoid
Many sellers make simple but costly errors that derail their Amazon reimbursement claims. Avoid these common pitfalls:
- Filing for prohibited or ineligible items
- Missing the 180 day claim window
- Not providing required documentation
- Inaccurate or incomplete data on claims
- No follow up on pending claims
- Assuming you were already reimbursed
- Duplicate or excessive simultaneous claims
Following Amazon‘s guidelines and staying meticulously organized will help you avoid these mistakes.
Final Thoughts on Recovering Your Money
Dealing with Amazon reimbursements can be frustrating. But I hope this guide has armed you with the knowledge needed to successfully claim any funds owed by Amazon.
Just remember these key points:
- Understand eligibility and documentation requirements
- Thoroughly review Amazon‘s policies and limits
- Identify losses accurately from detailed reports
- Provide complete, accurate data on all claims
- Follow up closely on all pending reimbursements
- Streamline with templates and tools where possible
Reimbursements are a normal part of selling on Amazon FBA. Don‘t leave money on the table. Take control of the process and get back every dollar you deserve.
You work hard to profit on Amazon – don‘t let avoidable losses eat into your business‘s bottom line. Use this guide as a roadmap to simplify reimbursements.