Amazon FBA Lost Inventory Reimbursement Guide
While Amazon’s FBA program offers a convenient solution for order fulfillment, there can be instances where inventory discrepancies come up.
Amazon FBA lost inventory reimbursement process lays out the steps for filing a reimbursement claim, and explains the relevant Amazon policies that govern the process.
What is Amazon FBA Lost Inventory?
FBA stands for Fulfillment by Amazon.
It’s a service offered by Amazon to sellers where Amazon stores, picks, packs, and ships your products to customers.
However, there can be instances where inventory discrepancies occur within this fulfillment network.
When the quantity of inventory you’ve sent to Amazon’s fulfillment centers doesn’t match the actual on-hand amount in their system, it’s considered Amazon FBA lost inventory.
What is an FBA Inventory Reimbursement Claim?
An FBA inventory reimbursement claim is a formal request submitted to Amazon seeking compensation for inventory that has gone missing within the Amazon FBA lost and damaged inventory reimbursement network.
When you discover a discrepancy between your inventory records and the quantity Amazon acknowledges having in their fulfillment centers, filing a reimbursement claim is the mechanism you use to recoup the financial loss associated with the missing inventory reimbursement.
By initiating a reimbursement claim, you are essentially asking Amazon to compensate you for the value of the lost inventory.
Is it Possible to Recover Lost Inventory on Amazon FBA?
Unfortunately, while Amazon’s sophisticated fulfillment centers employ advanced inventory management systems and security measures, instances of lost inventory can happen.
In these cases, recovering the physical lost inventory itself is not guaranteed.
However, lost and damaged inventory Amazon reimbursement policy provides mechanism for you to gain the financial loss associated with the missing items.
This policy acknowledged that discrepancies can come up due to multiple factors within the fulfillment network, and it establishes a process for compensating sellers for verified lost inventory.
Reasons for Amazon FBA Unaccounted Inventory
There are multiple factors that contribute to lost inventory within FBA:
Shipping Discrepancies
Inconsistencies between the quantity you shipped and what Amazon receives can lead to lost inventory.
Discrepancies can arise due to human error during the countering process at either your location or the Amazon fulfillment center. Mislabeled boxes or cartons can also contribute to these inconsistencies.
Warehouse Misplacement
Inventory might be misplaced within a fulfillment center, leading to temporary or permanent loss.
The vast size and high volume of inventory moving through Amazon fulfillment centers can increase the likelihood of misplaced items.
While Amazon has measures in place to locate misplaced inventory, there’s always a chance that an item may go undetected.
Damage During Storage or Fulfillment
Inventory can be damaged during storage or the picking and packing process, potentially leading to disposal and being categorized as lost.
Rough handling during transportation or within the fulfillment center can damage your products.
Additionally, damage can occur during the picking and packing process if items are not handled appropriately.
When Amazon deems the damaged inventory unsellable, they may dispose of it and issue yo us reimbursement.
Theft
While uncommon, theft can also occur within fulfillment centers. Amazon employs security measure to prevent theft, but it’s a potential factor to consider, especially for high-value items.
How to Claim Reimbursement for Lost Inventory
To claim reimbursement for lost inventory you need to identify the lost inventory. Regularly monitor your inventory levels in Seller Central. Significant discrepancies between your records and Amazon’s reported inventory indicate potential loss.
Investigate the discrepancy. Before filing a claim, make sure the discrepancy isn’t due to recent sales or processing delays.
Gather and compile documentation like purchase receipts, invoices, and shipment IDs to support your claim.
File a reimbursement claim navigating to the Seller Central and access the “FBA Inventory Reimbursement” section to initiate a claim. Provide details about the missing inventory and upload any support documents.
Respond to inquiries that demand additional information during investigation that Amazon may request. Respond promptly to expedite the process.
Keep in mind that there are time limits for submitting reimbursement claims. Refers to Amazon’s FBA Lost and Damaged Inventory Reimbursement Policy for specific details.
What is the Amazon FBA Lost and Damaged Inventory Reimbursement Policy?
This policy serves as a framework for resolving discrepancies and recouping financial losses associated with inventory that goes missing or sustains damage within the FBA fulfillment network.
Key elements of the reimbursement policy:
The policy applies to inventory discrepancies identified after Amazon receives your shipment into their fulfillment centers. It encompasses situations where inventory quantities received by Amazon differ from the quantities you originally shipped, or where your products are damaged during storage or fulfillment.
To initiate a reimbursement claim, you must provide documentation substantiating your claim. This typically includes purchase receipts, invoices, and shipment IDs that verify the quantity and condition of the inventory you sent to Amazon.
Amazon will then investigate the claim and, if deemed valid, will issue reimbursement based on predetermined criteria.
The reimbursement amount is generally determined using one of two methods:
- Historical Selling Price: If you have a history of sales for the missing damaged item, Amazon will likely base the reimbursement on your average selling price over a specific timeframe.
- Predetermined Value: For new or slow-selling items where historical sales data is limited, Amazon may have established predetermined values per unit category. These predetermined values are designed to offer a baseline level of compensation in the absence of sufficient sales history.
The policy outlines how Amazon handles damaged inventory.
In some cases, if the damage is repairable, Amazon may attempt to salvage the product and return it to your sellable inventory.
For unsellable items, Amazon may offer you the option to have the damaged inventory returned to you at your own expense. However, if the return cost proves prohibitive or the damaged goods pose safety hazards, Amazon reserves the right to dispose of the inventory without further compensation.
What Happens to Customer-Damaged FBA Returns?
A distance policy governs customer returns, including those involving damaged products.
Customer-Initiated Returns
If a customer initiates a return due to damage they claim was pre-existing when they received the product, Amazon will typically investigate the claim. If the investigation determines the damage originated before reaching the customer, the return will likely be treated as a standard FBA return, and you will be responsible for the return shipping cost.
Damage During Customer Handling
If the customers damaged the product during use or handling, and Amazon determines this is the cause of the return, you may not receive a full refund on the item’s selling price.
The FBA Lost and Damaged Inventory Reimbursement Policy might provide a partial reimbursement for the damaged product, depending on the severity of the damage and whether Amazon deems it sellable as a customer return item at a discounted price.
In cases of extensive damage, Amazon may dispose of the returned item without offering any reimbursement.