ecommerce reimbursements

FBA Reimbursements: How They Work and What You Can Do

If you sell on Amazon, you know that it loses a lot of stuff and makes mistakes in the fees they charge you.

With millions of products in huge warehouses, there are bound to be mistakes made either by an overworked machine or an even more overworked associate.

However, even though these mistakes are understandable, you are losing real money if Amazon doesn’t find your products or reimburse you for the damaged ones within a reasonable time. 

So how do you poke Amazon to get them to pay you back? Read on to find out.

What Amazon Should Reimburse You For

There are a lot of factors that come into play when Amazon is unable to locate your shipment or charges you higher FBA fees, so it’s hard to generalize. However, these are some of the most common reasons why you don’t see your inventory anymore.

Lost or Damaged Products

Your products can be lost or damaged while it is inbound or after it has been received.The missing units may either be because of mistakes during check-in or negligence by the carrier itself.

For example, if only 25 units of the 50 you sent are checked in, that’s considered a loss. Or if UPS loses your shipment (or some of it), Amazon is responsible for getting this reimbursement. This is usually done via insurance from the common carrier.

And even if the products are received by Amazon in good condition and in the correct number, your inventory still has a lot to go through, which can cause it to be lost along the way. For instance, Amazon could lose your products after receiving and storing them in their warehouse. 

Also, if the item you sent is significantly damaged that it is no longer sellable, they might destroy your shipment without your permission.

Customer Returns

Jeff Bezos aims for Amazon to be the most customer-centric company in the world. And in order to fuel his famous Flywheel model, he needs to improve customer experience, which easy customer returns are a part of. This is a problem for a lot of sellers because it allows customers to avail of free shipping for reasons of return other than “Purchased by Mistake.” Some customers take advantage of this.

It can happen in a lot of ways. A customer may return a different item or an unsellable one. Worse, the customer returns an empty box to the warehouse.

For most of these cases, the customer has already been reimbursed before Amazon can check if the product is indeed returned in the same condition it was delivered.

But customers aren’t always to blame for problems involving returns. It could also be that the returned item was actually the right one in the same condition it was sent but Amazon failed to add it back to your inventory.

Incorrect Fees

If you’ve been using FBA for a while, you should be familiar with FBA fees by now. They’re an additional cost that eats a portion of your profit, but they are necessary for a smoother fulfillment process. However, if you’re not careful, you could end up paying for more than you should.

There are two main things you should monitor regularly to ensure that you aren’t overpaying for anything: product category and product dimension. Let’s tackle the first one.

Amazon charges you a referral fee for your products, depending on which category it belongs. Books, for example, are charged 15 percent while consumer electronics are charged 8 percent. If your product is miscategorized into a more expensive category, this is another thing Amazon needs to reimburse.

When it comes to the product dimension, on the other hand, the measurements made by the Cubiscans Amazon uses can be erroneous. And when it comes to dimensions, even a fraction of an inch can make a big difference to the fees they charge. So it’s important to remain on top of things when it comes to these measurements.

How to Determine What You’ve Lost and How Much Amazon Owes You

Losing inventory is not uncommon in Amazon. I should know because I’ve worked as an Amazon FBA warehouse picker before. One wrong move, e.g., misplacing the products, can take months of searching and scouring before your product is found. Meanwhile, you can’t put it up for sale because it’s still considered lost. Therefore, it’s important that you, as the seller, are vigilant about your inventory.

Lost or Damaged Inventory

To make sure that everything is in place, open your Seller Central Account and go to Reports → Fulfillment → Inventory Adjustments. Here, you can download either a .csv or a .txt file that contains 18 months’ worth of data to recover your inventory.

After you’ve downloaded the file, take note of the column under “Reason.” You’ll see letters here, representing codes that tell you why your inventory number has changed. D, for example, means the inventory has been disposed of. For FBA reimbursements, what you need to remember are the codes E and M.

E means that the product is damaged at the Amazon Fulfillment Center. M means that the inventory has been misplaced. This is usually because the product has been placed in the wrong bin, which I unfortunately also did when I worked with them.

The next step is to open a new case within Amazon Seller Central. But just as you don’t want people to keep bothering you, you shouldn’t send dozens of requests at a time. You should first determine which products Amazon has already reimbursed you for so you don’t request for it again, further slowing the process.

Customer Returns

When it comes to dealing with problems related to customer returns, Amazon provides an easy way to track the status of every return from start to finish. You just need to go to this URL within Seller Central

As mentioned earlier, Amazon can immediately refund a customer even before the item is returned. So you have to check if the product has already been processed for return to your inventory.

To determine which transactions involve a customer already being refunded without actually returning the item yet, look for the ones labeled RETURN STARTED. Usually, if it has been more than 45 days, you should have been refunded.

Now, you may come across customers who are abusing the system too much to the point of illegality. Some of them may send back empty boxes or a whole other item. While you can just brush it off as another unfortunate event, I encourage you to open a case with Amazon to deter these acts.

Incorrect Measurements

It’s not uncommon for your boxes to arrive at an Amazon warehouse with bulging sides. This usually wouldn’t matter as long as the items inside are intact and undamaged. However, it will matter when Amazon gets the measurement wrong because of those bulges.

To monitor this, input your ASIN into the Amazon FBA calculator, and if you find that the measurements are incorrect, ask to have it remeasured. If there are discrepancies in the actual measurement and those made by the Cubiscans, make sure to ask them for reimbursement.

Take note, however, that you can have an item remeasured only once every six months. There is also no software to my knowledge that allows you to ensure the measurements are correct so you can immediately ask for a refund.

Conclusion

Amazon FBA has provided convenience to thousands of entrepreneurs all over the world. This system eliminates the need for sellers to rent their own warehouses and packers (although this is still an option) and made the whole process a lot easier.

However, along with this convenience comes the need to regularly monitor the correctness of the fees being charged by Amazon. Care has to be taken because incorrect fees usually mean more expenses, and there are limits as to how long you can open a case after a discrepancy has occurred.

The steps outlined in this article are just some of the ways you can get refunded for FBA fees. If you know of other ways to do this, let us know in the comments section below.

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