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 recently and received over $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 Amazon may owe you
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. This is not acceptable as Amazon certainly has the ability to reimburse 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 involved. 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 avoid sending Amazon lots of meaningless data.
Checking for lost inventory
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 match then delete these rows from the spreadsheet so you can focus on the missing products. If there are more Missing (M) than Found (F) then highlight this row as you will need to submit this to Amazon.
Checking for damaged inventory
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, added to your inventory temporarily and then returned to you. You can remove these rows as they are dealt with.
If there are any FNSKUs that do not match, 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 for lost and damaged 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
Amazon normally reply fairly quickly and will email you a list of products they are reimbursing. For any they are not reimbursing they should provide an explanation.
How to claim on items refunded but not returned
When a customer wants to return a product they purchased from you they will normally be refunded straight away by Amazon. You will get an email to confirm this has happened. You should then get a second email to confirm the product has arrived back at the Amazon warehouse and you can choose to have it sent back or destroyed.
Sometimes this does not happen and when you search in ‘FBA Reports>Returns’ nothing shows up. This is normally because the customer has not returned the product after being refunded or the order was lost in transit. Amazon has refunded your customer but has not returned the product to you or refunded you.
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 items as in the example below;
Order XYZ. Customer refunded but not returned. Hello, This order was refunded on 17.1.18. 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 has 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.
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 entire process and save you valuable time. We recommend ‘Refund Genie’ which is just one of the awesome Amazon tools included with Helium 10. Most sellers will find the reimbursements they get easily cover the cost of Helium 10. You also get more than 10 other tools included so take a look at how this awesome software can help your FBA business here – Helium 10.
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 or using Helium 10 to automate it all. You can download the ‘Returns’, ‘Reimbursements’, ‘Adjustments’, ‘Removal Order Detail’ Reports from seller central. This allows you to reconcile against returns emails and refunds and keep track of it all.
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