HomeAmazon FBA How to get Amazon to reimburse you for lost and damaged inventory
How to get Amazon to reimburse you for lost and damaged inventory
We carried out this process a couple of weeks ago and have so far received over £1500 ($1888) in refunds from Amazon. We had no way of being aware we were entitled to these reimbursements and Amazon had no intention of paying them. This was a great feeling especially as it often feels you are only ever on the losing end of your relationship with Amazon. It was a relatively simple procedure which only took a couple of hours and we will show you how to do it.
The different types of reimbursements you may be entitled to
We are going to look at the following types of reimbursements you may be entitled to;
Refunds for lost and damaged inventory.
Refunds for orders where the customer has been refunded but you have not received the return.
The bulk of the refunds we received were for inventory which had been lost in the various Amazon warehouses over the previous months.
Amazon seems to purposefully make the process confusing so most sellers never bother to do it. I can only imagine the amount of money Amazon are making every year by withholding refunds from sellers. They certainly have the software to refund when required so it is not acceptable that it doesn’t happen automatically. So how did we go about getting all the refunds we are entitled to?
How to get reimbursed for lost or damaged inventory
The first thing to do is go to your Amazon Seller Reports> Fulfilment by Amazon> Inventory Adjustments. You then download the last 18 months of data. You will then have an output file showing all the events by FNSKU and the quantities and reason codes. At this point, you could try and just send this entire file to Amazon and ask them to reconcile it. They will probably do this and will pick out the missing items and offer to reimburse you. I would recommend checking yourself though so you know what to expect and also you are not just sending Amazon lots of meaningless data.
You are basically checking to see if the quantity Missing (M) and Found (F) match. If they do not match then either you have been given some extra stock by mistake or they are lost. If you click on ‘Learn More’ Amazon give you a complete run down on their overly complicated coding.
Top Tip – We have a separate sheet with all the codes and meanings. We then use an Excel formula to pull these into the report so we know what has actually happened to each item. If you are pretty good with Excel you can do this too using the Vlookup formula. If not then you may need to do it manually.
Now check each FNSKU to see if the total for missing and found matches. If they do then delete these rows from the spreadsheet so you can focus on the problem products. If there are more Missing than found then highlight this row as you will need to submit this to Amazon.
You can now check for any damaged inventory. With damaged inventory that has been reimbursed or returned, there are normally three rows related to the same FNSKU as shown in the image below.
You need to match up ‘Damaged Sellable -1’ with ‘Damaged Unsellable +1’ and ‘Transfer to Holding Account -1’. This means that a product has been returned to Amazon as damaged and then added to your inventory and then returned to you. You can remove these rows. If there are any that are not matching, as in the example below, you need to raise this with Amazon as they have not been returned or reimbursed.
This shows that the Fisher Price product has not been returned or reimbursed as there is no ‘Transfer to holding account’ entry.
Save the remaining rows as a separate CSV file. You can now raise a case with Amazon Seller Support with the file attached listing problem products. Your claim with Amazon should look something like this;
Lost and Damaged Inventory Research I am reconciling my Amazon account and see there are items lost or damaged in the warehouse. There are still some that have not been reimbursed as shown in the attached file. Can you please research these and credit my account where appropriate. Thanks
They normally reply fairly quickly and will email you a list of products they are reimbursing or provide an explanation if they are not reimbursing them.
How to claim on items refunded but not returned
You will get an email confirming a customer has been refunded for an order and you then wait for the return. However, it might never arrive and when you search for the order number in FBA Reports ‘Returns’ nothing shows. This is normally because the customer has not returned the product after raising a return or the order was lost in transit to the customer. Amazon has refunded the customer but has not returned the product or refunded you so you are out of pocket.
If you keep track of all your orders where the customer has been refunded and make a note when the order is actually returned you will know when there is a discrepancy. After 45 days if nothing is showing you need to raise a claim with Amazon for those orders as in the example below;
Order XYZ. Customer refunded but not returned. Hello, This order was refunded on 17.1.17. We have not received this customer return and more than 45 days have passed. Can you please investigate and reimburse if required. thanks
Again Amazon Seller Support normally get back to you within 24 hrs and will confirm they have investigated the claim and reimbursed you. You can then reconcile this return on your spreadsheet.
How to claim for items lost in transit to Amazon FBA
A final area you should be checking is your FBA Shipments ‘Shipping Queue’. If you check the ‘Shipped’ and ‘Received’ columns the totals should match for all ‘CLOSED’ shipments. If they do not match it normally means Amazon have lost something. You can then view the ‘Reconcile’ tab and report the items as missing. You have to wait about 10 days from when the shipment arrived at the warehouse before raising a claim. They may ask you to upload an invoice and will most likely reimburse at this price. Make sure if you paid different amounts for that product you upload the highest value invoice.
This is where it is important to know the weight of everything you send to Amazon. You can then tell them to check the total weight of the parcel as recorded by UPS. Amazon knows the weight of each item so it will prove how many items were in the box. You can also refer to the overall dimensions of the parcel for larger items which will prove the quantity shipped.
Top Tip – take a photo of each parcel before sealing it up. You can email it if there is any dispute as it will show the total number and condition of your products.
Amazon will just close shipments automatically even if the numbers don’t add up. They will not investigate unless you raise a case so make sure you check your shipments regularly. We find about one in ten shipments have missing items. Remember you only have 6 months to raise a case before it is closed permanently.
Tools for automating the reimbursement process
Like most aspects of selling on Amazon, there are now tools available which will automate this process. One of these is Amzsuite which have a number of selling tools but is only available in the US. The second is Refunds Manager who manually raise cases with Amazon in return for 25% of the funds they get back for you. Amazon may not be happy for people to use software to get refunds and you are best to check Amazon TOS first. There have been reports of Amazon contacting sellers who use this type of service and telling them to stop.
So if you follow all these simple methods you should get back hundreds in refunds from Amazon. I would recommend keeping on top of this and maybe doing an audit every three months. We have an excel workbook with sheets for Returns, Reimbursements, Adjustments, Removal Order Detail which we just download from Amazon. This allows us to reconcile against returns emails and refunds and keep track of it all.
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