What is FBA Inventory Reimbursement?

As a business owner or supplier who entrusts your inventory to Amazon’s Fulfillment by Amazon FBA service, understanding FBA inventory reimbursement is crucial. 

Inventory discrepancies can range between 1% and 3% of annual FBA revenue. This means that for every $100,000 in annual FBA revenue, you could be missing out on $1,000 to $3,000 due to inventory discrepancies. 

In other words, if you claim back all the Amazon FBA reimbursements you are entitled to, it could add significantly to your net profit margin. 

What is Amazon FBA Reimbursement?  

FBA reimbursement service is a process where Amazon compensates sellers for financial losses related to their inventory stores and fulfilled through the FBA service. 

Essentially, Amazon reimburses you for situations where they are responsible for errors or issues. 

What is Amazon FBA Inventory Reimbursement?

FBA inventory reimbursements are a type of FBA reimbursement which focuses on recouping losses associated with your inventory within Amazon’s fulfillment centers

If your inventory goes missing within an Amazon fulfillment center, you can file a claim for reimbursement. Amazon’s large network of fulfillment centers processes millions of items daily. 

Unfortunately, with such a high volume, there’s always a chance that an item might go missing. 

If you reconcile your inventory records and discover that units are missing from your FBA inventory that haven’t shipped out to customers, you can initiate a claim for reimbursement for lost FBA inventory. 

Damaged Inventory

Inventory damaged by Amazon during storage or fulfillment can be reimbursed. Damage can occur for various reasons during the fulfillment process at an Amazon warehouse. 

For instance, items might be crushed or broken due to improper handling during storage or picking and packing processes. 

Amazon will reimburse you to the value of the damaged inventory, provided you can demonstrate that the damage occurred while in their care. 

Destroyed Inventory

In cases where Amazon destroys your inventory due to damage or safety concerns, you’ll be reimbursed based on Amazon’s policy. 

There are instances where Amazon deems it necessary to destroy inventory due to factors such as severe damage, expiration dates, or safety hazards. 

While Amazon will destroy the inventory themselves, they will still reimburse you for the value of the destroyed goods according to their established guidelines.

Removal Order Discrepancies

If there’s a discrepancy between the inventory you requested removal for and what Amazon actually removes, you may be eligible for reimbursement. An Amazon reimbursement service allows you to have your inventory shipped back from an Amazon fulfillment center to a designated location. 

Sometimes, Amazon shipment discrepancy can arise between the number of units you request for removal and the number Amazon actually removes and sends back to you. 

In such cases, you can file a claim for reimbursement for the missing inventory. 

Different Types of Amazon FBA Reimbursement 

While Amazon FBA inventory reimbursement primarily focuses on recouping losses, there are several other scenarios where you might be eligible for reimbursement as an FBA seller. 

Incorrect FBA Fees

Mistakes can happen, and Amazon might occasionally charge you an incorrect fulfillment or storage fee. 

If the dimensions or weight of your product are miscalculated by Amazon, you might be charged an incorrect storage fee. 

If Amazon picks and packs more units than what a customer ordered, you might be charged an inflated fulfillment fee. 

Customer Return Errors

There are situations where customer returns can lead to reimbursement claims: 

If a customer accidentally returns a different item from another seller and it gets mixed in with your inventory, you can request reimbursement for the returned (but incorrect) item. 

If a customer damages a product during the return process, and the damage renders it unsellable, you might be eligible for reimbursement. However, Amazon’s policies regarding customer-damaged returns can be complex, so carefully review their guidelines before filing a claim. 

How to Receive FBA Inventory Reimbursement

The process of receiving FBA inventory reimbursement involves several steps: 

1. Identifying the Issue

This is the first and most crucial step. Regularly reconcile your inventory reports with what Amazon shows in Seller Central. Look for discrepancies in inventory levels, damaged product listings, or unexpected fees. 

2. Gather Documentation

The stronger your evidence, the higher the chances of a successful claim. Gather documentation such as purchase invoice, which verifies the cost of the product you’re seeking reimbursement for. 

These records should show the quantity of the missing or damaged inventory. 

If the inventory is damaged, clear pictures showcasing the extent of the damage are crucial evidence. 

In case of removal order discrepancies, having documented proof of your request and Amazon’s confirmation is essential. 

3. File a Claim

Head to the “FBA Inventory Reimbursement” section in Seller Central and initiate a claim for the specific issue you encountered. Be sure to select the appropriate category for your claim (lost inventory, damaged inventory, etc…). 

4. Provide Details

Clearly outline the issue in the claim form, this helps Amazon identify the specific inventory in question. 

  • Quantity: Specify the exact number of units lost, damaged, or missing in the removal order discrepancy. 
  • Date: Indicate the date of the inventory was last seen or received at the fulfillment center (for lost inventory), or the date you initiated the removal order (for discrepancies). 
  • Condition: For damaged inventory, describe the condition of the product when it was shipped to Amazon.

5. Upload Supporting Documentation

Attach all the relevant documentation you gathered in Step 2, such as invoices, inventory records, pictures, and removal order confirmations. 

6. Respond to Inquiries

Amazon might request additional information to investigate your claim. Promptly respond to any inquiries and provide any requested details. 

The processing time for FBA inventory claims can vary depending on the complexity of the issue and the workload of Amazon’s Seller Support team. It typically takes anywhere from a few days to a few weeks for Amazon to reach a decision. 

If your claim is denied, you have the right to appeal the decision. 

Carefully review Amazon’s response and see if there’s any additional information you can provide to strengthen your case. The appeal process usually involves submitting a new claim with a clear explanation of why you believe the initial decision was incorrect. 

Submitting a Claim for Lost or Damaged Items in Amazon’s Fulfillment Centers

Submitting a claim for lost or damaged items specifically follows the general steps outlined above. 

When filing a claim for damages or Amazon FBA lost inventory, be as specific as possible about the product details, including the product name, SKU, quantity, and any unique identifiers like serial numbers. 

For damaged inventory claims, having clear pictures documenting the extent of the damage is crucial. Take pictures from multiple angles to show the damage accurately. 

If possible, include pictures of the product’s undamaged condition before it was shipped to Amazon for comparison. 

There’s a time limit for submitting FBA inventory reimbursement claims. According to Amazon’s policy, you generally have 18 months from the date the issue occurred to file a claim.