If you are using Amazon FBA sooner than later you will deal with lost or damaged inventory.
The good news: you can get your money back. The bad news: it’s not always as automated and straightforward as it should be…
Amazon Reimbursement: Keep track of your inventory first
In a perfect world, every time when Amazon lost or damage your stuff you would be automatically reimbursed. For the full amount.
As we all know, the world isn’t perfect, and neither is Amazon. It goes without saying, but you should keep an eye on your inventory and monitor all the changes and if something is wrong, contact Amazon.
Here is why: Amazon won’t always reimburse you automatically and even if it does, you still may lose money. Amazon makes mistakes. The more time passes the harder it gets to track missing items and take a proper action.
So, stay vigilant and claim back the Amazon reimbursement as soon as possible.
How to get reimbursed from amazon reimbursement?
Before you do anything, it’s good to take a look at the FBA Lost and Damaged Inventory Reimbursement Policy first. Amazon tells you what can be reimbursed and how to do it.
Amazon can either “Replace the item with one with the same FNSKU” or “Reimburse you the estimated proceeds of the sale of that same item”. I will concentrate on the latter since it can get tricky (“estimated” is the key here, more about it later).
You can get your money back for “Items damaged while in an Amazon fulfillment center” and “Items missing within an Amazon fulfillment center for 30 consecutive days”.
Some conditions apply. Amazon gives you 18 months of the date of loss or damage to submit your claim. They also won’t reimburse expired or defective items.
How to find damaged products?
Before you can apply for an Amazon reimbursement, you have to find damaged or missed items and contact Amazon.
Here is how:
1. Go to Reports > Fulfillment > Inventory – Show More > Inventory Adjustments (this only works for the USA marketplace, UK has a different wording)
2. Select: Damaged and choose the timeframe
3. Click: Generate Report
You should get a list of all your damaged items that call for Amazon reimbursement.
From here there are 2 ways to proceed:
The first way (the easy one):
It should be ok to copy all the items, paste them into Excel/Google Sheets, save as a .csv and send over one big file to Amazon. Then, Amazon will check them for you and if something is wrong, they should get back to you.
Also, often Amazon will reimburse even if the item is sellable.
However, I heard recently Seller Central is asking sellers to break down those big files into smaller chunks – 5 units per case.
The second way:
You manually find which damaged items haven’t been reimbursed yet. If the item has both “Damaged at Amazon…” and “Transfer to holding…” it means that it was already reimbursed and you don’t have to send it to Amazon. You can also delete all items marked as “Transfer at holding”. After you do that, save the list, .csv will do.
5. The last thing is emailing the support. You have to create a new case. The best way is to open a new case under “FBA Issues” > “Something else“ > “Other Issues”.
Don’t forget to attach the file with all the items you want Amazon to investigate!
You are done! Now Amazon will pay you back for all those damaged items!
Not so fast….
Usually, if an item is lost or damaged Amazon will pay you the amount you were selling the item for less the fees you would have been charged.
Here is what’s happened in my case:
I have been selling items on Amazon and one day I realized I am missing one. Not a big deal, I thought. I did a quick research and I found that it was damaged in a warehouse. I wrote to Amazon and I asked for a reimbursement.
Since it was just one item, I gave them the SKU and a short description. A few days later I got a message:
Hello from Fulfillment by Amazon,
One or more items in your FBA inventory qualifies for a reimbursement. We have initiated a reimbursement request for you. No action is required by you at this time.
This reimbursement is for an issue that you brought to our attention or for an issue that we identified at the fulfillment center. The amount is determined by the FBA Lost and Damaged Inventory Reimbursement Policy
Looks good, right? The only problem was that I was selling the item for about $71 USD and I got only $20 back.
I was shocked! That was even less than I paid for it!
I quickly wrote to Amazon again, demanding my money back.
Here’s what they said:
Thanks for contacting us.
I’m sorry for giving you bad experience.
About the question you ask, due to unable to find a valid contact you, so for your problem, reply to your email as follows: according to our policy, the amount of compensation for the damage to the warehouse, if less than the actual price of your words, because the system is using the default compensation amount, this is a normal phenomenon. And we may not be able to re submit the application for compensation for you, because only the default compensation amount is less than 20% of the goods actual price, we can for you to re submit the request for compensation, otherwise if we submit it, must be rejected, and alleged irregularities, and therefore may not be submitted again for you. I’m really sorry for you. And please understand.
Amazon not only didn’t reimburse me “estimated proceeds of the sale of that same item”, they actually paid me less than I paid for it! And they called it “a normal phenomenon”. And said I can’t re-apply. Even criminals have a right to appeal!
They mentioned something about Amazon reimbursement policy – you can only appeal if the compensation is less than 20% of the actual price. I haven’t seen this rule anywhere. I asked, but they didn’t tell me where I can find it.
As I said before, Amazon claims they will give you the “amount of money that you would have received if someone had purchased your item”. At the same time they “consider several factors when determining the reimbursement amount”. This includes sales history, the average FBA selling price on Amazon and the sales history of the specific ASIN.
Some things to note. I was the only seller of that ASIN and it wasn’t selling well. Amazon says that if they don’t have enough data, they will use the default Amazon reimbursement value (it was $20 for my item). This is what probably happened in my case.
But I didn’t give up.
I saw in the Amazon Reimbursement Policy that I can ask a reevaluation and that I can provide an invoice.
I shoot them another e-mail, pointing to the Reimbursement Policy and asking why no one asked me about an invoice.
Thanks for contacting Amazon Seller Support.
I’m glad to assist you today. Regarding your questions, kindly refer to the information below:
You are also requested to submit a commodity invoice，We can only try to help you apply for revaluation, the final result is still not what we can control, and please understand.
According to our policy, the amount of compensation for the damage to the warehouse, if less than the actual price of your words, because the system is using the default compensation amount, this is a normal phenomenon. And we may not be able to re submit the application for compensation for you, because only the default compensation amount is less than 20% of the goods actual price, we can for you to re submit the request for compensation,
Have a nice day!
Thank you for selling with Amazon
Now we’re talking!
So, it turns out I could apply for a revaluation and that I could prove with an invoice how much the item was worth.
I could probably do that right away and save a lot of time.
I quickly sent them the invoice.
Soon I got my money back.
I got nothing close to the $71 but at least they paid me back what I paid for the item.
I was still a few bucks behind. I paid for the shipping to the warehouse, taxes etc. Those expenses aren’t on the invoice, but I had no more time to fight for it.
Fight for your right
The moral of the story is simple. Take care of your business and fight for your rights. Of course, your mileage may vary. Maybe I was just unlucky and the reps were bad? Maybe my item was problematic, as at that time I had almost no sales?
The thing I learned is to check my inventory more often and keep a track of damaged and lost items. Some sellers are paid back a lot of money as soon as they apply for an Amazon reimbursement. If you haven’t, do this now and see if Amazon owes you money.
Jacob is a coffee addict, Amazon seller, and content manager at BQool, in that order. With 8+ years of experience in eCommerce, he is trying to share his passion for Sales and Marketing with others. You can usually find him with a cup of coffee surrounded by a pile of books. Jacob’s favorite tool is BQool’s BigTracker.