Amazon is the biggest e-commerce retailer and provides its sellers with a great platform to sell their products. It also works as a great blessing, especially for startups to boost their sales and increase their profits. This platform provides customers with a wide range of products that amount to millions, maybe billions too. If the business is voluminous of this size, the price of a small percentage of errors can mount to a few thousand dollars. As an Amazon seller, you should claim the amount if Amazon does not refund you.
Amazon’s FBA reimbursement policy states that if your products are damaged or lost while in Amazon’s warehouse or fulfillment centre, Amazon will reimburse you. However, the process of getting reimbursed can be complicated and time-consuming. But with the help of a dedicated Amazon FBA account manager, it can be simple and less time-consuming.
What should the seller know about Amazon’s FBA reimbursement policy?
It could happen that Amazon owes you some amount, pays you the wrong amount or does not pay you at all. It could be anywhere from never to multiple times a year, which puts a severe dent in the annual profits. If you wish to avoid such issues while selling on Amazon, you need to know a few facts about FBA reimbursements.
Some interesting facts that every Amazon seller should know about FBA reimbursement are:
#1: Amazon Destroys Unsellable Inventory
It can be hard to believe, but that is a bitter fact. Statistics show that Amazon ships close to two million packages a day, but it does not mean that it sells every item that comes to the warehouse or the sellers send to the facility. It means that Amazon warehouse employees destroy some of the unsold inventory.
You may assume that Amazon destroyed the inventory because they were defective or expired, which may not be correct in a few cases. As an FBA seller, you can store your products in the Amazon fulfillment centre to facilitate quick shipping; you need to pay some fees to Amazon for providing their warehouse. A few sellers stop paying the fees after their products are not sold or do not perform as per expectations.
Amazon needs space to accommodate new inventory. It destroys or donates the unsold items abandoned by the sellers.
A few other items that Amazon destroys include products labelled as unsellable, including items that are damaged during transit or storage. It means you pay your FBA seller fees, and if Amazon accidentally destroys your items, you can claim FBA inventory reimbursement.
Amazon follows the same policy if a buyer returns your product with damages that make the item unsellable.
#2: Amazon allows a few customers to keep low-cost returns
Many shoppers share that they bought items from Amazon, initiated a return and got a refund without returning the item. It can happen to anyone, especially those regular Amazon shoppers who purchased items (the price of each item is below a certain amount).
Such buyers will get two items at the cost of one. Such moves will keep Amazon’s reputation untarnished. Amazon sellers will not mind this move unless they get an inventory reimbursement, as they tend to lose revenue due to the unreturned product.
#3: Inventory can get lost in an FBA centre
Amazon has a couple of million active sellers, and most use the FBA facility. It allows each seller to store hundreds of items, which could amount to a few million items in storage at any time.
Many items go in and out of the warehouse every hour. The inventory could be lost due to high traffic, which may be due to human error, unscrupulous employees, or a few other factors. If you are an FBA seller and your items have gone missing in the Amazon facility, you should not have to bear the loss.
If you notice an item missing from your FBA dashboard, you should report it to Amazon. If Amazon verifies your claim, the e-commerce giant will either replace the lost items or refund the value of the lost product. It is clear that Amazon will not refund your FBA and selling fees.
#4: Amazon employees processing returns might not place your products in the inventory
It is obvious that workers at the Amazon warehouse work in stressful conditions, hence they are more likely to make mistakes. The most common error includes sending the returned item to the wrong seller.
If a buyer returns a product and Amazon misplaces your product, you will not be able to sell it. It will surely affect your earnings. It provides additional benefit to the competitor if the returned item is added to the competitor’s stock.
As a seller, you should track all the returned goods and check if they are added to your inventory. You should receive an FBA reimbursement if the item is added to the inventory. The refund includes 20% restocking fees paid by the buyer. If you cannot do it yourself, hire a dedicated Amazon FBA reimbursement expert, who can work on your behalf.
#5: FBA inventory reimbursements are supposed to be processed by Amazon automatically
Amazon sellers pay a fee to Amazon for handling inventory, shipping, customer service, returns and other tasks on behalf of the seller. If Amazon fails to fulfil its duties, the seller deserves FBA reimbursement, which includes:
- Restocking fees
- Inaccurate order funds
- Cost of an unreturned product after the customer receives a replacement
- Missing order credits
The most common errors that call for reimbursements are lost or damaged products by the employees, inbound shippers or customers. Generally, Amazon reimburses automatically, but it may not happen every time.
If Amazon doesn’t do it automatically, it will be hard for you to know that Amazon owes you money. If you have a high sales volume, the chances of the amount going to hundreds or thousands of dollars are high. You can hire a professional Amazon FBA consultant to protect your income, look into FBA discrepancies and claim reimbursement manually.
#6: Not all destroyed or lost inventory gets automatically reimbursed
Amazon deals with millions of orders a day. It becomes hard for the professionals at the Amazon facility to keep track of these numerous orders. Amazon can miss a few reimbursement orders. If you have a large inventory and don’t watch the FBA dashboard regularly, you would not know that Amazon needs to provide a refund.
You can check for discrepancies in some reports like:
- Manage orders
- Inventory adjustments
- Inventory event details
- Removal order detail
- Received inventory
- Daily inventory reports
The inventory adjustment report contains details of your damaged inventory for which Amazon has not reimbursed. If you find an item in the adjustment report that is not in the transferred or holding account, Amazon will owe you a refund.
You can find all your reports on the seller dashboard. You should wait for thirty days after the issue occurred to file a claim. It is because Amazon will need that time to find the point at issue and take necessary action. If you find that Amazon has not initiated the refund process within 30 days, you can make your claim via Amazon’s Seller Central support.
#7: You can get reimbursement without having to file reimbursement claims
Amazon has a set process for the FBA reimbursement process. You need to follow the process, or else Amazon can ignore your claim. It can be difficult for sellers to claim a refund, so you need to hire an Amazon FBA account manager to monitor your account regularly and ensure you get the maximum refund. A few rules that you should follow are:
- One issue per claim: You cannot state multiple issues in a single claim process.
- State your actions: You should mention the necessary action you have taken to get the issue resolved.
- State duration: Your claim should include the time duration of your waiting period for automatic resolution of the issue
Why should you hire Amazon FBA consulting services at the earliest?
FBA reimbursement can be tedious. DIY would not always get you desired results. If you wish to increase your chances of getting a maximum refund, you need to hire professional Amazon FBA consulting services, like FBA Refunds.
We at FBA Refunds have been in this field for a few years and are proud to share that we have a high successful claim rate. If you wish to be part of our client base, book your appointment and discuss your issue with our representative!