Amazon FBA is an incredible business opportunity, but you have to monitor the fees they’re charging.
When you couple that much inventory with the lightning-fast order fulfillment speed that FBA promises both third-party sellers and customers, mistakes are bound to happen.
That’s why Amazon has processes in place to help discover issues and reimburse sellers. For example, if you cancel a shipment with UPS, and you’ve already prepaid the shipping cost via Seller Central, then Amazon is supposed to reimburse the fee.
The problem is that sometimes there are errors with the reimbursements. There are issues that Amazon can’t always catch.
Fortunately, you can monitor your account or get help from an Amazon reimbursement service to audit your account.
Here are the top reasons why Amazon FBA would reimburse your account when you or your account auditor submit a claim.
1. Customer return not added to account inventory
One of the more common reasons why Amazon FBA would credit money back to your account is because a customer returned a product and the unit wasn’t added back to your inventory. The unit may have been placed in another seller’s inventory or could be floating around the warehouses without having been scanned to any seller’s account. Because customer returns are so common, the highest volume of FBA errors can be attributed to returns.
2. Customer received higher quantity than order
Another issue that can occur is when a customer receives a higher quantity of product than what they ordered and purchased. If this goes undetected, you’re out the amount. But if you can discover this discrepancy through your orders and inventory, then Amazon will refund you.
3. Customer refunded higher amount
When a customer elects to return an item, they should get refunded the exact amount that they paid. But it doesn’t always work this way. Sometimes a customer might get refunded for more than what they paid. It’s hard to guess why this happens, but it does. We see it all the time. It could be that Amazon is pulling the item’s current price or a mixture of its past price and current price.
4. Inventory lost or missing in Amazon warehouses
Another issue that happens frequently is lost and missing inventory. Think back to the 120 million products and countless units. Inventory can get misplaced fairly easily. If the inventory that’s supposed to be in your account doesn’t isn’t accurate, you can get reimbursed for what’s missing.
5. Inventory damaged by Amazon employees
Similar to the above, inventory can get damaged by Amazon employees when they are fulfilling orders, moving inventory around the warehouse, or placing new inventory. Amazon is supposed to automatically reimburse you when this happens, but you may not receive the reimbursement even if you get the notification that the reimbursement is coming through. You might find a discrepancy with how much inventory your account is supposed to have, and undocumented damages could be the culprit.
6. Items from inbound shipment lost or damaged by carrier
When you send products to Amazon FBA, you submit unit counts for each product. Amazon may not receive all of them, or they may receive some of them damaged. When this happens, you get reimbursed for the value of the product (or a unique calculation that factors in the product’s value and what you would have sold it for and what similar products are being sold for).
7. Shipping dimension or weight errors
How much it costs to ship your product to customers depends in part on the object’s dimension and its weight. There are 6 different product tiers: small standard-size, large standard-size, small oversize, medium oversize, large oversize, and special oversize. For example, large standard-size items are under 20 pounds in weight, their dimension is below all of the following limits: 18 inches on the longest side, 14 niches on the median side, and 8 inches on the shortest side.
If you get overcharged for the wrong product tier, this can amount to a huge reimbursement claim, especially considering you can request reimbursement dating back 18 months for this error.
8. Return product not received
Sometimes, a customer can get their refund for a product even though they haven’t physically returned the product yet. Rarely, they will get to keep that refund even if they forget to mail the product back. Amazon is supposed to discover this issue and make sure that you get reimbursed for the price of the product, but this doesn’t always happen.
9. Unsellable inventory not reimbursed after being damaged by customer
If a customer wears a pair of shoes out on the street and scuffs up the soles and then sends them back to Amazon, that is unsellable inventory. Amazon may give them a full refund, but they’re also supposed to make sure that you get reimbursed for the cost of the product. If you don’t get reimbursed for your customer-damaged, unsellable inventory, then you can submit a claim to Seller Central support and get a reimbursement.
10. Commission fee errors
Similar to storage fee issues, commission fee errors can really add up over time. Some categories have an 8% commission. Others have 15%. Some are even higher. If you’re charged more in commission fees than you’re supposed to be, then you can submit a claim for a reimbursement dating back 18 months. In one case, we’ve seen a customer get 6 figures for such a claim.
Get More FBA Refunds
While these are some of the most common issues with Amazon FBA charges, there are a dozen others.
An Amazon warehouse is a madhouse. That’s why you need to protect your business in whatever way you can. Make sure that you or someone well-trained is scouring your Seller Central reports weekly or monthly.
About the author
Dayana Mayfield is the head of content for Refunds Manager, the top-rated Amazon FBA reimbursement service that helps 9,000 US Amazon sellers get their money back.