Does Amazon Owe Sellers Money with Refunds?

April 25, 2024 Does Amazon Owe Sellers Money with Refunds?

Amazon seller refunds owed to FBA (Fulfillment by Amazon) sellers are likely more than you’d expect. 

How much more?

Amazon seller refunds can average anywhere from 1% to 3% of your annual revenues. Say you made $500,000. Amazon seller refunds could be anywhere from $5,000 to $15,000. That’s a lot of money.

Amazon seller refunds are owed to you whenever they mishandle your inventory, miscredit your refunds, or damage or even lose your products. The problem is that Amazon seller refunds don’t happen automatically.

More often than not, you have to file a claim for Amazon seller refunds within 18 months of the error or problem. Even that’s not a guarantee—not every claim is approved, particularly if it is incorrectly filed.

To understand this whole process of Amazon seller refunds, in this post we look at:

  • What qualifies for Amazon seller refund?
  • How do I know if I’m owed an Amazon seller refunds?
  • How best to get your Amazon seller refunds

What Qualifies for Amazon Seller Refunds? 

Amazon seller refunds are owed for any error or overcharge Amazon makes for the following:

  • Lost and damaged inventory
  • Improperly credited returns or returns not put back into inventory, 
  • Destroyed or disposed of inventory deemed by Amazon as unusable
  • Overcharges resulting from inaccurate product weight and package dimensions

Note that damages to products by customers are not eligible for Amazon seller refunds. Also, note that Amazon seller refunds do not exceed $5,000 for a single item.

To qualify for Amazon seller refunds, products must be registered with FBA and meet all inventory and product requirements. Also, eligible claims for Amazon seller refunds must be filed within 18 months of the problem or issue and must be submitted to the proper Amazon department.

Claims that are not properly filed are rejected and must be refiled. Filing a claim even following proper procedures does not guarantee approval for Amazon seller refunds.

How Do You Know You’re Owed Amazon Seller Refunds?

In many cases, Amazon seller refunds are issued automatically. But in many cases, they are not. It is your responsibility as an FBA seller to audit your records for any errors that took place in the following categories:

  • Shipment to Amazon
  • Fulfillment Center Operations 
  • Shipment to customer
  • Removal Claim when the returned product is not received at your proper return shipping address

The problem with this, of course, is that staying on top of whatever errors might occur is a time-consuming process. Not to mention a bit tedious. And with no certainty that you’ll actually uncover sufficient cases for Amazon seller refunds to justify your time, effort, and expense.

As a business owner, your focus is better spent on sourcing and listing new products and growing your business. Still, there’s the potential of a large amount of money in Amazon seller refunds you’re letting pass you by.  

What are your Options?

You could consider any of the following:

  • Direct hire. You’d have to be fairly certain you are going to recover at least as much money in Amazon seller refunds as the salary for the new hire. Also, these days the labor pool is pretty competitive. Can you find someone experienced with Amazon FBA selling and Amazon seller refunds; if you can’t, do you have the time to train them?  
  • Add the task to an employee’s existing job responsibilities. Nothing an employee likes better than to have more work at the same compensation. Moreover, by adding a new task, you’re taking their attention over the reason why you hired the employee in the first place. Of course, many Amazon sellers are solo operations, so the idea of an employee is already a no-go. The next two are perhaps more realistic possibilities.
  • Virtual Assistant (VA). There’s no fixed salary cost, as most VAs work for a flat rate and only when they work. However, finding the right VA presents the same issues as trying to find a direct-hire employee. And again you are outlying money without assurance it is going to get you more money back in return. 
  • Subscribe to or purchase specialized software to identify potential Amazon seller refunds. However, you still need someone, yourself or someone you hire, to file and follow up on claims for Amazon seller refunds.
  • Amazon Reimbursement Service. GETIDA is a free data auditing, analytics and reimbursements service that specializes in getting sellers the reimbursements they are entitled to.

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