Mastering Amazon FBA Reimbursement: How Does It Work? – A Definitive Guide
If you’ve watched the movie A Bug’s Life, you’d know that ants are hard-working insects that diligently gather grains to be offered to the greedy grasshoppers. If we take away the mean grasshoppers from the picture, we can think that the ant colony collects grains to feed themselves during winter. To speed up the process of collecting grains, Flik created a grain-harvesting device. But due to his accident-prone personality, he inadvertently knocked the leaf containing the grains into a stream. What if we compare the incident to your Amazon inventories and Amazon FBA reimbursements?
During the holiday season, you’ve stocked up on your inventories for a speedy and efficient delivery of goods. You’ve even worked with professional SEO services to optimize your listing. However, Amazon lost or damaged some of your items during shipment to the warehouse, or in the warehouse itself. What are you going to do about it?
Since Amazon handles thousands of items each day, inventory mistakes are inevitable. There are a number of areas that Amazon owes you money. It can be through damaged goods that you weren’t reimbursed for, or a lost inventory. In this article, we’ll take a look at how Amazon FBA reimbursement works, and how to file a claim.
What is Amazon FBA Reimbursement?
As an Amazon FBA seller, you send your inventories to the GBA warehouse for storage. The employees working in the warehouse will handle the sorting, picking, packaging, and fulfilment of an order. Sadly, Amazon sometimes accidentally damages, loses, or destroys your inventory.
If this happens, Amazon needs to replace that item with a new item or reimburse you for the inventory mistakes. But usually, this doesn’t happen. So, Amazon owes you and you need to file a claim. To know how Amazon owes you money and the different categories of Amazon reimbursements, read below.
7 Categories for Amazon FBA Reimbursements
There are several reasons for Amazon to reimburse you. We’ll discuss in detail these situations below.
- Issues during shipment to the fulfillment center
We all know that you have to send your products to Amazon’s warehouse for storage. Naturally, you expect them to be received and processed without any problems. However, that’s not always the case.
For whatever reason, Amazon may not scan all the units they receive. There are also situations wherein they don’t receive all the units. Sometimes, the inbound carrier can misplace or damage the inventory. Due to these situations, Amazon owes you a reimbursement for the amount of lost, or damaged goods.
- Missing Inventory
Once the inventory has been shipped to the warehouse, it can be misplaced by the employees. Remember, they are handling thousands of goods each day. Even though they have state-of-the-art systems to help the process, errors may still occur.
Your inventory may end up in another seller’s rack. This affects your store. So, you need to check your inventory report.
- Damaged Inventory
Amazon employees have to move fast when they’re sorting, packing and fulfilling orders. Since they move fast, accidents may happen. This is another common category for reimbursements.
Another situation may be when carriers deliver customer returns back to the Amazon warehouse. They may damage the item during transit.
Amazon’s FBA inventory return policy covers sellers from these cases:
- Items that are damaged or lost en route from the fulfillment center to the customer
- Shipments that are lost or damaged on their way to fulfillment centers (for FBA)
- Products that have been missing in fulfillment centers for 30 days
Despite the Damaged Inventory report in Seller Central, there is a chance Amazon may not be able to report the incident. Hence, you need to actively monitor these situations for you to be reimbursed by Amazon. In some cases, Amazon initiates the reimbursement specially if their employee caused the damage to your item.
- Destroyed Inventory
When a customer returns a damaged item, Amazon destroys it without your permission since it’s no longer sellable. Amazon should refund you for the value of the item. But sometimes, it doesn’t come through. Hence, you need to check if you were reimbursed or not.
- Issues on Customer Returns
Customer returns are a common part of any e-commerce business. To make it easier on your part, Amazon will handle customer returns. However, there are times when a customer gets a refund even if they don’t return the product. Another time is when a customer gets a new item but they did not return the original product.
Other situations are when a returned item isn’t added to your inventory, the customer was refunded the wrong price, and the 20% restocking fee wasn’t refunded back to you. These issues needed to be resolved because you are losing money and inventory. An Amazon FBA reimbursement claim is the solution to your problem.
- Errors in Order Quantities
A customer may receive an extra item even though they only paid for one. Naturally, the customer won’t ship back the extra item. Most probably, Amazon won’t detect their error. Your duty as a seller is to monitor your inventory report to know if the items shipped were correct.
- FBA Fees
You have a number of FBA fees to pay each month. Amazon would usually bill you for them. However, there are times when they overcharge you. For example, you were charged twice the usual amount for a product. Overcharges like these can lead to large amounts of reimbursements.
Learn About How Much Amazon Owes You
To see how much Amazon owes you, go to Reports > Fulfillment > Inventory Adjustments. From here, download the list of lost and damaged inventory. An excel file will be downloaded for all your missing inventory.
File name: inventory-report.jpg
Alt tag: inventory report
Once you are able to download and open the Excel file, you will see the data like this:
You will see that for each row, there is a Reason column with different letters. These letters represent the reason why the inventory was either increased or decreased. The reason codes that represent inventory that Amazon has lost or damaged are E and M.
Once you are able to know the items that need refunds, you will need to send a claim. Do avoid sending dozens of requests at a time because you won’t be immediately dealt with by Amazon. The best thing you can do is to create 5 rows at the document to list the items needed to be reimbursed, save it as a new file and open a new case in Amazon. For a more detailed discussion, read below.
How to Claim and File Amazon Reimbursement
There are three ways to file an Amazon reimbursement claim.
- You can do it yourself
You can file a reimbursement claim on your own. However, it can be time-consuming on your part. Regardless, here is the process:
- Log in to your Seller Central account and click the Help link.
- Go to Contact Us > Selling on Amazon > Fulfillment by Amazon > FBA Issue > Something Else.
- Select the Email tab
- In the “Please describe your issue text” field, explain the issue in detail.
- Attach the .csv file, which contains the items subject to reimbursement.
- Review your request carefully and then hit Send.
You can see the reimbursement request in the Reimbursement report.
- Hire a virtual assistant to do the job for you
Outsourcing the help of a virtual assistant is a cost-effective and efficient way to handle reimbursements. In this way, you can focus on growing your store while letting your Virtual Assistant handle the nitty-gritty. Try using Upwork, Fiverr or Freelancer.com to hire your VA’s.
Having a VA also helps you analyze the data claims. They’ll be the one to submit cases for you and you can decide on what work to give to them. Plus, it’s more cost-efficient than hiring an expert.
- Amazon FBA reimbursement tools
If you want a more hands-off approach to filing a claim, choose an Amazon FBA reimbursement tool. Some of the popular ones are Amzrefund and Refundly. These tools vary based on their functionality.
How long does it take for Amazon to refund?
Amazon usually replies within 12 hours. However, it takes 4-5 business days for the refund to be processed. Do take note that you shouldn’t send multiple reimbursement requests in one go. Amazon may suspend your account when you do so.
Do’s and don’ts of Amazon FBA Reimbursement
Before you start filing your claim, you need to take note of these do’s and don’ts. Following these rules will help you avoid account suspension. Lastly, it will help you get your claim approved promptly.
- Before you file a reimbursement claim, you need to meticulously check the inventory report. You don’t want to file a claim in an already reimbursed item.
- Create a template that you can use again. Since you are selling on Amazon, there is a chance you will experience refunds again. Having a template can make filing a claim easier.
- Double-check the reimbursement amount. There may be technical glitches that lowers the claim amount.
- Once you are able to file a claim and given a support ticket, you need to follow up periodically.
- Be courteous and gentle while writing an email. It pays off to be professional in your email.
- Do not file multiple claims in a short period of time. It may result in account suspension.
Being an Amazon FBA seller has its perks. You can focus on other aspects to help grow your business, such as hiring SEO services for your website and listing while Amazon takes care of the fulfillment of orders. However, there are a number of situations where Amazon makes a mistake. It is up to you to track these errors and file an Amazon FBA reimbursement claim. Just follow our guide and you’ll be good to go.