Here’s Your All-In-One Guide to Amazon Reimbursement Claims

Last updated on September 6th, 2023

Written by Mohamed Aden

Imagine putting in your best effort every single day to grow your Amazon business, only to discover that a portion of your earnings hasn’t been credited to you. Even worse, some of your packages have been damaged, stolen, or lost during shipment. Nothing can be more stressful than losing money and resources that could have been your profit. 

Luckily, every Amazon seller is now entitled to Amazon reimbursement. But here’s another catch: they won’t notify you if you qualify for this program. Your sole responsibility is to file reimbursement claims to get back what Amazon owes you.

Whether you are new on Amazon or have been selling on the platform for quite some time but have never tried their program, this guide is what you need. We’ll look at various aspects of reimbursement in Amazon and find ways to get your money back. 

Setting the Terms Straight: Refunds vs. Reimbursements

Let’s put things in perspective. Most Amazon sellers and buyers mix up the terms. “Refunds” and “reimbursements” are not interchangeable when discussing the amount or timing of your money’s return. It’s time to settle on what the two words mean in the Amazon context.

• What Are Refunds?

Refunds are the amount the buyers get when they return merchandise. After they request to return an item, they are entitled to get the total purchase price back into their preferred refund method. 

• What Are Reimbursements?

Sellers get reimbursements when Amazon compensates for the returned items. Like buyers returning an item for a full refund, a seller must also initiate a request and go through a process before they get what is due to them.

A Brief Overview of Amazon Refund and Reimbursement

It’s understandable why both parties see refunds and reimbursements as the same thing. That’s because buyers and sellers are affected in different ways whenever there’s a returned item.

What makes them even more confusing is they both occur in the Amazon FBA program. Since one of FBA’s functions is processing customer returns, there can be instances where Amazon may owe the seller or buyer money for specific fulfillment-related issues.

Allow us to give you a brief look at the process on both sides.

• The Buyer’s Side: Amazon FBA Refund Process

Customers must first go through the following steps to get their money back. Here’s how it usually works:

1. The buyer signs into their Amazon Seller Central account and requests a return.

2. Amazon sends the buyer a return shipping label.

3. The buyer packs the item and puts the shipping label on before returning it.

4. Amazon confirms receipt and processes returned items (within 30 days).

5. Once processing is complete, Amazon issues a refund to the customer.

6. The refund may be added to the buyer’s payment gift card balance or be received in the selected refund method.

There are cases wherein Amazon instantly refunds the amount. The buyer can follow through on the procedure by returning the item to the Amazon fulfillment center. If the buyer uses a paid method for the return, Amazon will deduct the shipping costs and restocking fees from their refund amount.

These are just some of Amazon’s policies regarding refunds. To know more about the entire refund system, contact Amazon customer service.

• The Seller's Side: Amazon FBA Reimbursement Process

As for the merchant's end, the effect of return and refund requests from buyers hits them with a deduction, which they'll have to request for reimbursement. Here's an overview of the process:

1. The seller gets a deduction for the return funds on their next disbursement before Amazon sends a shipping label.

2. The seller gets a deduction for the refund upon issuing the refund to the buyer.

3. Once the items make it to the fulfillment center, Amazon will determine their condition.

4. If the returned item is deemed sellable, Amazon will restock it.

5. If the item is deemed unsellable, Amazon will investigate further if the seller is eligible for a reimbursement, which we will discuss in more detail below.

More Details on Filing Amazon FBA Reimbursements

Now that we have a general understanding of refunds and reimbursements, let’s dive deeper into a process specifically relevant for FBA sellers—filing for Amazon FBA reimbursements. 

FBA businesses must not forget three things:

1. Eligibility

First, let’s talk about eligibility. Amazon has a strict requirement to determine whether an item is eligible for reimbursement. The item in question must pass the following criteria:

• It should be registered in Amazon FBA when it is damaged or lost.
• It must comply with the FBA product requirements and restrictions.
• It must adhere to the FBA inventory requirements.
• The shipping plan that you’ve submitted states the exact items and quantities.
• It is not pending for disposal as requested.
• It was not discarded at your request.
• It is not a defective item.
• The customer didn’t cause damage to the item.
• Keep your seller account in normal status before filing a claim.

Before you uncover if there are any reimbursement claims you need to process, let’s look at the policy.

2. Policy

Amazon has a reimbursement policy for FBA sellers who experience issues with their inventory. Here are a few of the guidelines to keep in mind.

• The re-evaluation of your request must have additional information, such as receipts or invoices.

• Suppose Amazon later finds the lost inventory or discovers they reimbursed you erroneously. In that case, they may replace the item or reverse the credit from your account.

• You won’t get a refund for prohibited items and expired items.

• Amazon will only entertain requests with sufficient information. You need to provide detailed and relevant data such as sales history, Amazon Standard Identification Number with an issue, Amazon’s average FBA selling price, and others.

• Amazon doesn’t allow the submission of multiple requests at the same time.

• Amazon has the right to dispose of or resell the item they reimbursed for you.

Note that these rules are for lost or damaged inventory only. You may want to seek a trusted Amazon account manager if you need further help exploring Amazon’s policies.

3. Different Classes of Reimbursements

The following are types of FBA inventory reimbursements, which can take place at any time during the fulfillment process:

• Items Lost or Damaged in Amazon Warehouse

Amazon stores and retrieves items upon order placement. Unfortunately, lost inventory can occur due to misplacement or being placed in another seller’s stock, affecting business operations. Given the circumstance, Amazon has no choice but to compensate sellers for every lost unit.

• Damaged Item During Shipment to Customers or Back to the Warehouse

Whenever Amazon employees pick and pack your orders, they do it quickly and efficiently. We can’t blame them because hundreds of orders are fulfilled each day. Add to that, there’s Amazon Prime’s two-day shipping, which they have to get done quickly. 

Since Amazon employees must move fast, accidents can happen. These accidents can cause damage to your items, thereby Amazon owing you a reimbursement. 

• Customer Returned the Item 

While customer returns may sound common to you, one too many cases is a big problem Amazon sellers and employees face. But you can still make a reimbursement claim for the following reasons:

• Customers received a refund but did not return the item.
• Customer did not return the original item.
• The returned product was not recorded.
• Wrong refund amount was paid to customers.
• Restocking fee was not credited.

• Wrong Quantity of Orders 

Despite your utmost care, incorrect order processing can happen. A customer may receive double or triple the number of items they ordered. The sad part is that Amazon will not improve their order accuracy, and customers won’t return the additional items in most of these cases.

• Overcharging of Amazon Fees 

Amazon FBA has its pros and cons. One of the disadvantages is the different types of Amazon FBA fees you need to pay, which includes storage, fulfillment, and commission fees. 

The fees depend on the category, dimension of the item, and the distance and type of shipping package. In some situations, you are charged the wrong fee. These overcharged fees can add up, and you have the right to claim reimbursement. 

How to File a Reimbursement Claim

Given the scenarios stated above, it’s unsurprising that sellers still have opportunities to bring back what they’ve lost in your business. But everyone must also know Amazon has become more meticulous in processing FBA reimbursement claims to ensure that all requests are legitimate and valid. 

Here’s how you can adapt to the FBA reimbursement process.

For Shipment and Inventory

Review your shipments and inventory adjustment reports regularly. These are the details you need to take note of:

• Ensure that the verified shipment delivery date is within nine (9) months. 

• Look at the Reconcile tab on your shipping workflow’s Summary page.

• Before filing for claims, verify the contents of your FBA shipment, the quantity stated, and the other details in your shipping plan. 

• Inspect any discrepancies on the Reconcile tab containing the fulfillment center’s information. 

• Remember, Amazon may have already reimbursed you for the units you originally wanted to file. You can confirm this by visiting your Reimbursements report.

• After reviewing your report, visit the Reconcile tab to claim lost inventory items. You may file claims for damaged units on the Contact Us page in Seller Central. 

• Documents that support your claim should be readily available for Amazon verification. These include Amazon shipment ID, proof of FBA inventory ownership, and proof of delivery.

For Fulfillment Center Operations

Amazon's Fulfillment Centers are busy places, and accidental damages are more common than you think. As an Amazon FBA seller, you should know what to do if such a case happens to any of your products.

To file for reimbursement:

1. Check the Inventory Adjustments report and verify that the unit was lost or damaged no more than 18 months ago.

2. Ensure that the unit was not restored or found in a sellable condition and not defective.

3. Review your Reimbursements report to determine whether or not the unit has already been reimbursed.

Use your transaction item ID in the Inventory Adjustments report for damaged items. Use the Fulfillment Network Stock Keeping Unit (FNSKU) for lost items. These two will help you determine if you can file a claim.

For Customer Return Claims

You should file a claim within 45 days and not later than 18 months after the customer has filed for a refund or replacement.

• Verify item refund/replacement status in Manage FBA Returns report and inventory.
• Go to the Reimbursement report and see if you have already been reimbursed. `

Provide your customer order ID and other additional information during the application. Afterward, you have to wait until Amazon approves your claim.

6 Tips to Achieve Stress-Free Amazon Reimbursement Claims

Although filing an Amazon reimbursement claim can be time-consuming, there are ways to streamline the process. The following tips can help you maximize your reimbursements while simplifying your business operations.

• Be wary of FBA seller reimbursement systems. Amazon may not like automated and bot-like responses. 

• Don’t forget to create a template per category. Remember, filing multiple claims at one go makes you a candidate for account suspension.

• Send status requests regularly to ensure that Amazon acknowledges your claim.

• A disorganized FBA warehouse system can put your reimbursement claim at risk, so optimizing your inventory management process is essential.

• Make a habit of re-checking the accuracy of the details you received, such as the address and order quantity. It minimizes order inaccuracies and saves you the hassle of filing reimbursement claims.

• If there are tedious tasks you should do and you don’t have time for them, there are Amazon FBA reimbursement tools and software to help you get the job done.

Amazon FBA is Still a Full-Time Job

Besides optimizing your listings and PPC ad campaigns, your responsibility is to manage your inventory and deliveries. Yes, Amazon FBA is there to assist you, but you must prevent setbacks like lost and damaged inventories by being as organized as you can.

Seller Interactive can be your partner agency if you are looking for the best Amazon experts. We’re here to help you protect your account and maximize your profits with our FBA reimbursement service for Amazon. This way, you won’t spend long hours cross-checking your inventory reports and wondering how long it will take for Amazon to reimburse you.
Free yourself from this burden. Book a Discovery Call today!