Amazon FBA Reimbursements: Get Back the Money Amazon Owes You [2024 Guide]

Did you know that Amazon is obligated to reimburse & refund Amazon Sellers for their lost or damaged inventory?

If you’re an Amazon Seller who uses Fulfillment by Amazon (FBA), then Amazon probably owes you some money!

But of course, Amazon won’t just simply give you the money they owe you. Or at least not all of it…

You need to audit your records and compare them against Amazon, then file the appropriate claims to request your reimbursement or refund.

Done correctly, this can make a big different in your overall profitability. Most sellers recover ~3% of their total revenue back in the form of Amazon reimbursements and refunds!

So let’s dive in and find out how you can claw back the money that Amazon owes you…

What Are Amazon FBA Reimbursements?

As an Amazon FBA Seller, you’re entrusting Amazon’s FBA warehouses with handling & shipping your inventory. This is an inherently messy business, and products will be lost or damaged along the way.

Amazon’s FBA Inventory Reimbursement Policy exists to ensure sellers are being paid back for all these inevitable mistakes. Amazon states in their FBA Inventory Reimbursement Policy –

“If an item you send to us as part of the Fulfillment by Amazon (FBA) service is lost or damaged at a facility or by a carrier operated by Amazon or on behalf of Amazon, we will replace that item with a new item of the same FNSKU or we will reimburse you for it.”

Different Types of Amazon FBA Reimbursements

Amazon FBA reimbursements compensate sellers for various issues. These include lost or damaged inventory within Amazon’s network, overcharged fees, and customer return discrepancies, including Amazon incorrect order, customer damaged FBA returns, and Amazon return wrong item. The main scenarios covered are:

Shipment to Amazon Claims (Inventory Lost or Damaged on Inbound):

• Lost or Missing Units: You shipped 100 units into Amazon, but the inbound team only checked in 50 units.
• Lost by Partnered Shipping Carrier: You shipped inventory into Amazon and the partnered carrier (i.e. UPS) lost the shipment. Amazon is responsible for filing an insurance claim with the carrier and reimbursing you.

Fulfillment Center Operations Claims (Inventory Lost or Damaged After Received):

• Lost or Damaged in Warehouse: Items were successfully checked into an Amazon FBA Warehouse, but lost or damaged during handling.
• Item Destroyed Without Permission: Amazon occasionally destroys items without seller permission (typically when badly damaged) and may not properly credit the seller for these.

Customer Return Claims (Problems with Customer Returns):

• Return Never Received: Customer was granted a return & instantly refunded, but never actually sent back the return item.
• Returned Product Unsellable: Product returned by customer is unsellable.
• Returned Product Not Added Back to Inventory: Customer returned product but Amazon never returned it back into your inventory.

Other Seller Fees Amazon Will Reimburse:

• Overcharged Referral Fees: Amazon sometimes overcharges Sellers by erroneously charging fees from higher commission tier categories.
• Overcharged FBA Fees: Amazon sometimes overcharges on services such as fulfillment, storage and removals due to miscalculations or error in the fee calculation process.
• Incorrect Measurements Reimbursements: Amazon can incorrectly measure the dimensions or weight of your products, causing inaccurate storage fees or excessive shipping charges.
• Unused Shipping Labels: Get a refund for paid partnered carrier shipping labels you never used.

Eligibility for Amazon FBA Reimbursements

Eligible items for reimbursement must meet specific criteria set by Amazon:

1. Item Registration: Items must be registered in Fulfillment by Amazon (FBA) at the time of loss or damage.
2. Product Compliance: Products must comply with FBA guidelines and restrictions.
3. Accurate Shipping: The shipping plan must include the exact items and quantities sent to Amazon.
4. No Disposal: Items must not be pending disposal or have been disposed of at the request of the seller or by Amazon’s initiative.
5. No Defects: Items must not be defective or damaged by customers.

Reimbursement Time Frames

Amazon processes reimbursements within specific time frames based on the nature of the issue:

• Warehouse Lost Items = 30 days
• Carrier-Damaged Items = 1-2 weeks
• Inbound Shipment Discrepancies = 30 days post-receipt
• Customer Return Discrepancies = 45 days
• Fulfillment Center Loss = 30 days post-report

It’s also important to know that reimbursements can sometimes be clawed back well after you’ve received them. For instance, if Amazon locates your missing inventory – they will claw back their reimbursement credit and take it right back out of your sales. I’ve even had reimbursements clawed back over a year after the claim was made!

Claiming Amazon FBA Reimbursements

Claiming these reimbursements ultimately comes down to auditing and reconciling records for each possible reimbursement reason/category.

I’ll show you how to do it manually first, then show you how most big Amazon sellers end up doing it…

Manually Claiming Inventory Adjustment Reimbursements

The easiest one to start with is items lost in Amazon’s warehouse.

You’ll find that almost all of these will be reimbursed.

If you find a sizable amount of money doing this, then you should dig into the other categories and see what you can find.

For instance, you’ll need to manually check that all customer returns were not reimbursed. You’ll need to manually check that customers actually sent back the items. Etc.

Here’s the other reports you’ll need –

But inventory adjustments will usually be your largest category, so start here and determine how deep down the rabbit hole is worth it.

How Big Amazon FBA Sellers Handle Reimbursements

Successful Amazon Sellers generally don’t want to be spending their time digging through reports and auditing for reimbursements. They usually outsource or automate this tedious work.

Having Your VA Claim Reimbursements

This is exactly the type of repetitive work almost any VA can do. Record yourself doing everything manually and create SOPs for your VA to execute on a regular schedule. This is super easy now with AI SOP Generators like Scribe.

Automate Reimbursements w/ Software

There’s tons of software out there that will automagically dig into these reports and find reimbursements for you. Many of the ‘big tools’ in the industry have these built in, so you may even be paying for one already!

Tools with this feature include

• 👍 Sellerise: Includes a commission-free set of Reimbursement Tools on the Growing plan or higher (currently $31.99/mo with the STARTUPBROS20 coupon code).
• 👍 Helium 10: Includes a commission-free Amazon Refund Manager on the Platinum plan or higher (currently $80/mo with the STARTUPBROS20 coupon code).
• 👎 Eva.Guru: Reimbursement tool included in $25/mo plan, but charges an additional 11% reimbursement recovery fee.

Doing a first-pass with these tools is a no-brainer, especially since neither of them charge any fee or commission for using their refund tool (it was not always like this!).

Have a VA go through and grab the low-hanging fruit using these tools on a regular schedule. This will avoid paying commissions on the entire sum of your reimbursements (if you go the agency route).

And for many sellers, that will be enough. But for large sellers it often makes sense to have a specialized team of consultants go through your entire account history with a fine-tooth comb.

NOTE: Also check out my full list of recommended reimbursement tools & services.

Outsource Reimbursements w/ Agencies

Any large seller that’s tried to do this themselves has seen just how much time can be spent hunting down transactions and reconciling records.

At a certain point, it makes sense to engage a refund/reimbursement agency to deploy their specialized team of auditors into your account.

They will dive deep and find every penny they can, and most will even submit your claims and deal with Amazon for you too.

These agencies almost always charge a commission fee based on what they find. So make sure you’ve already used a software tool to do a first-pass (if you want to avoid paying commissions on the entire sum of your reimbursements).

Some of these agencies charge an absolutely eye-watering sum of money. I would recommend sticking with whichever one gives you the best rates, as to my knowledge – they’re all doing the same thing!

• 👍 TrueOps: Charges a flat 10% commission on whatever they find & claim on your behalf (use the code JOIN10K to get the first $10k in refunds commission-free).

Unfortunately, there’s a large list of refund agencies that I would not recommend due to egregiously high fees. If you own one of these companies, reach out and let me know why your service justifies such a premium price. But until then, I can’t recommend any of the following –

• 👎 Refund Agencies Charging Way Too Much: MyRefundGuy, Getida, SellerInvestigators, RefundManager

One thing to keep in mind is that these agencies will take their commission on whatever reimbursements are processed, and generally will NOT refund you if those reimbursements are reversed in the future (i.e. Amazon finds your lost inventory). That’s just another reason to use my recommended workflow below.

NOTE: Also check out my full list of recommended reimbursement tools & services.

My Recommendation: Automate & Outsource

As I said above, the best way to do this is a mix of both the automation & outsourcing methods.

Most sellers don’t know that you can actually have 2 auditors assigned to the same account! I didn’t even know this until talking with Joel MacPherson at TrueOps, who told me –

This makes the optimal way to run this function of your company obvious.

1. Do a regular ‘first-pass’ for low-hanging fruit and capture as many reimbursements as you can quickly/easily
2. Assign a 3rd-party agency like TrueOps to your account as a secondary auditor, and have them do a regular sweep (on a 90-day delay) to capture any extra reimbursements. Don’t forget to use the JOIN10K coupon code too!

This method allows your company to recapture almost all of your potential reimbursements at the lowest possible cost.

One area you may still need to check on yourself is inventory shipping (sent vs received). Amazon makes a lot of mistakes here, and you need to stay on top of them and file case after case. Someone on your team can do this, but it’s often an area no tool can help with.

Research Insights:

• The average time for a seller to receive reimbursement from Amazon after submitting a claim is 2-3 business days for personal claims. This varies with professional services based on case details and reimbursement type. (source)
• The error rate of Amazon FBA inventory management is 1% to 1.25%.
• Loss due to Amazon’s mistakes accounts for 1%-2% of sellers’ annual sales.
• The average seller loss could be as high as $20,000 due to inventory or damage, product category misplacement, etc. (source)

When deciding on the best approach for your Amazon FBA business, consider:

• Volume and Complexity: For high-volume and complex cases, professional services might yield better returns despite the costs.
• Cost vs. Benefit Analysis: For smaller sellers or those with simpler inventories, manual audits or employing a VA could be more cost-effective.

To maximize your FBA reimbursements, balance cost-efficient methods for straightforward claims with specialized solutions for complicated cases. Tailor your approach to fit your business’s unique needs, ensuring you’re not leaving money on the table.

Staying Current: What’s New for Amazon FBA Reimbursements in 2024

Amazon has recently updated its FBA reimbursement policies. Key changes include:

• Extended Reimbursement Timeframe: Amazon has increased the filing deadline for lost or damaged inventory claims to 18 months from the previous 12-month period. This extension provides sellers with more time to identify discrepancies and file claims.
• New Requirements for Filing Claims: Sellers must now provide detailed information when filing claims, especially for incorrect fees. This needs documentation that outlines the nature of the overcharge or error. The goal is to expedite the resolution process by reducing back-and-forth communications.
• Improved Customer Support: Amazon has enhanced its customer service for FBA reimbursements. Sellers can access dedicated support via email or phone. This ensures quick resolution of issues related to reimbursements.