Mastering Amazon FBA Reimbursement: How Does It Work?

/ November 30, 2020 | 7 Mins Read

Mastering Amazon FBA Reimbursement: How Does It Work?

Still waiting on that Amazon reimbursement? Read through to find out more.

Amazon has a great logistics system, and for the most part, Amazon FBA works smoothly and efficiently. If an item is unredeemed or damaged, the system accounts for it. One way for you to guarantee profits and increase sales is by having an optimized Amazon listing. If a customer returns a product, it is quickly assessed and returned to your store, or is labeled under damaged goods and will be dealt with properly.

Recently, most eCommerce businesses have reached a whole new level in terms of item returns. These numbers aren't something that everyone knows about, but it should be something sellers should include in their businesses. Numbers don't lie, and keeping up-to-date with these numbers will help sellers streamline their companies and systems.

No system is perfect, but a way for you to develop your business is by using an Amazon SEO Guide. And even a company as big as Amazon has some issues. Starting a business also means that you can be caught up in monitoring your business's other aspects.

Unclaimed FBA reimbursements and misappropriated FBA fees cause some of the biggest unnecessary expenses for sellers. While one missing product won't bring down your business if left unchecked, this small problem can pile up over time and lead to significant holes in your profit margins. 

As the saying goes, "knowing is half the battle." We're here to give you a run-through on how Amazon loses your items, how you can get your money back, and how you can prevent this from happening again, either by doing it yourself or using automated software systems. We will also touch on one of the most significant sources of overcharged fees that many sellers miss.

Inventory lost is money wasted, so before we talk about getting your money back from Amazon, let's discuss how Amazon loses your items.

1. How Amazon Deals With Inventory

Let's start by looking at where Amazon loses items in your inventory. This list can seem slightly daunting, and this is where the software for Amazon reimbursement comes into play. 

Before proceeding with Amazon reimbursements, you must also make sure that you have correctly optimized your Amazon listing. It's a little something that Amazon sellers should start incorporating. Aside from reimbursement tools, the overwhelming majority of refunds come from Amazon's wasted/damaged goods that are easy to audit.

You'll know how much money you're losing due to damaged or lost inventory as a seller. It's not something you can prevent, but it is money you can speedily gain back by optimizing your listing with an Amazon SEO Guide.

Amazon drop-off and returns

In several different ways, Amazon can also lose or damage items in your inventory. Here are some examples:

Lost/Damaged on Inbound

Missing items are more common than you think. When it comes to buying bulk orders, the more things there are, the easier it is to lose track of items. A good example would be buying thirty items and receiving only twenty. While Amazon is liable for this loss, the reason might be because the partnered carrier may have lost the items in transit.

Lost/Damaged After Received

After receiving an item, it's shipped to an Amazon warehouse, and the item may become misplaced in the warehouse. Often, things are so damaged that Amazon will destroy them without your permission. Because of this, Amazon might not correctly credit your account.

Customer Returns

This case is usually among the most intricate reasons why Amazon loses your items. When customers return an item for a refund, they sometimes return the wrong product or not even return the product at all. The customer might even ensure that the returned item is so damaged that it's unsellable. It may also be a mistake on Amazon's part. There are instances where Amazon doesn't put the particular item back in your returns.

2. Are You Eligible for FBA Reimbursement?

Reimbursement is a huge deal, and not all items are reimbursable. For a thing to be eligible for reimbursement, here are the following criteria:

  • The object is registered under FBA.
  • The item complies with the specifications and limitations of FBA and with FBA inventory requirements.
  • The seller sent the specific products and quantities listed in your shipping schedule to Amazon.
  • At your request, the item may not await disposal, or maybe it has not been disposed of because sellers have exercised the right to do so.
  • When you file a claim for a missing or damaged object, your sales account is in a normal state.

When your product doesn't meet the criteria stated above, we recommend calling Amazon seller support to help you with your claims. 

3. How It Works: Submitting Reimbursement Claims

Now that we know how Amazon loses items in your inventory, let's talk about submitting your reimbursement claims.

The claim submission process is not that difficult. Finding mistakes is what makes it challenging. Unlike most of the Amazon FBA problems, misplaced inventory is something that vendors would be able to spot because they usually track and distribute inbound shipments properly.

However, if you're avoiding most of these repetitive processes, try incorporating different tools that would help make this process bearable. In addition to these tools, you can also opt to wait for the appropriate amount of time before contacting Amazon. The item must be missing for 30 days.

  • You can start by sending an email with the stock-keeping unit numbers or SKUs you sent to Seller Help. The email should contain the date the specific item was shipped, along with the estimated shipping date and the partnered carrier's confirmation number. Besides, you must not forget to disclose the average sales price for the specified item and the ASIN's average sales price for all sellers.
  • To get a refund, you must be willing to wait enough time to get your claims processed. It's best to wait about three weeks for them to process your claim before following up with Amazon.

The actual method of submission is relatively straightforward. You have to be patient and precise. There are things you can do, however, to improve your odds of being reimbursed.

4. Why Is There a Need to Optimize Your Claims?

An optimized claim gives you a better chance of claiming your reimbursements. Optimized Amazon listings also help in making your requests more visible and more legitimate. There are other ways for you to make these types of claims easier to get processed.

If you want to secure your FBA reimbursement, you need to be very sure that you found an error. Amazon's missing inventories are taken very seriously, and they require clear and factual evidence. With FBA reimbursement claims, time is of the essence. If you want to get your money back, you have to send a request at the earliest possible date.

Being concise is crucial, so you must make sure your claim contains everything Amazon might need. You must guarantee that all your requests can be sent -- including all the information -- in one claim. Sending reimbursement claims isn't like the lottery. Sending more bids within a short amount of time may hurt your chances of getting that claim approved. 

It also helps if you inform Amazon of the measures you have gone through to resolve the issue. Not only does this increase your chances of getting your claim approved, but it also cuts down on the work that the support person has to do, saving you time and allowing the support personnel to look into your other concerns.

Amazon marketplace

5. Tips in Reducing Inventory Damage & Loss

As a seller, it is your responsibility to package and wrap your items as best as possible to make sure that they can survive even a three-foot drop, or that a heavy object can be placed on top of the package. There are multiple ways to secure your items from damage. May it be wrapping the thing in bubble wrap or packing peanuts, it's essential that you do everything you can to secure your package.

Be diligent in tracking your items to ensure that they are appropriately shipped to the buyer's address and to keep a close eye on the packages you're shipping out. Keep in mind that while Amazon is responsible for your items, you also have the responsibility to ensure that your items are all in order. Aside from the quality guarantee that you have placed on all your products, these items must meet the customer's expectations.

Ensure you have pictures of the item you delivered and complete details about the package you're selling, like the size, weight, dimensions, quantity, and other vital information. It's also important to contact the shipping centers to ensure that your product is handled correctly and that they are cared for.

It's also important to check the necessary tools and cross-reference them with your data to find discrepancies and errors. You must also learn about optimizing your listing by using the Amazon SEO Guide. Do not blame all on human error. The guide is where you may find items that Amazon's software and people could not. Be vigilant when it comes to these errors to make sure that you don't lose money.

An essential part of entrepreneurship is staying ahead of the curve, which includes being proactive and staying two steps ahead of everything. Take extra steps and find out how your items are shipped out. Learn how they are shipped and extend your research to industry-related information to help send them out to your customers.

While returns are part and parcel of internet sales, please don't treat them lightly. Get to the bottom of why they happen, especially if you regularly start to see them. The key to maintaining a profitable company would be to learn how to deal with Amazon FBA shipping and returns effectively. 

It also pays to do your homework about how the FBA system works to ensure that your claims are easily seen and met by the proper channels. If you're able, automate other tasks to ensure that your items are taken into account and are correctly audited. 

Finding out that your customers aren't satisfied with your product must be distressing, and seeing your company suffer from profit loss because of something you didn't account for must hurt even more. However, if you follow this guide and opt for a trustworthy Amazon shipping company that can do all the heavy lifting for you, we are sure that you can get your money back.

Jayce is the managing director of Seller Interactive, an Amazon full service marketing agency dedicated towards helping brands grow on Amazon. His content marketing expertise has led him to work with brands such as Toyota and GoDaddy, producing content that reached over 20M views in a month. He is on a journey to help D2C brands scale their business on Amazon.