To master the art of Amazon reimbursement claims, sellers need to develop a sound understanding of Amazon’s Reimbursement policy. Recently, Amazon made some changes to their reimbursement policy. To stay on top of the game and prevent yourself and your business from any loss, you need to stay updated at all times.
Starting November 1, 2024, Amazon is making significant changes to its reimbursement process for FBA sellers. The purpose of these modifications is to simplify how missing or damaged inventory is handled, increasing efficiency and minimizing resolution time.

However, these improvements include additional deadlines for submitting claims, which sellers should be aware of. Here’s a breakdown of the planned changes and how they may impact your business.

Proactive Reimbursement for Lost Inventory:

A major change is the inclusion of proactive refunds for FBA items flagged as lost in Amazon’s fulfillment centers (FCs). With this change, Amazon will automatically offer refunds when an item is reported lost, eliminating the need for sellers to manually submit claims in certain circumstances. You can track these reimbursements using the Reimbursements report in Seller Central, which provides a more streamlined procedure that saves time and effort.

While this update benefits sellers, it also has a few limitations:

Benefits

• Efficiency: Automatic reimbursements simplify the procedure, allowing you to concentrate on your business rather than dealing with administrative duties.
• Transparency: Real-time tracking of reimbursements keeps you up to date on the status of your inventory.

Limitations

• Manual Claims Still Required: The proactive reimbursement strategy does not address all scenarios. Certain genuine reimbursements may be disregarded. If you do not receive automatic compensation and believe your merchandise was lost or damaged, you will need to file a manual claim. In addition, all removal claims will continue to be filed manually.

Although this automated reimbursement system simplifies the process of dealing with missing items, sellers must continue to manage their inventory efficiently and file claims promptly according to the new deadlines. Understanding the policy upgrade and making necessary adjustments is crucial in ensuring smooth operations, protecting your business, and maintaining profit margins on Amazon.

What’s the Updated Eligibility Window to File Amazon Reimbursement Claims?

In addition to automating reimbursements, Amazon is modifying the timeframes for filing manual claims, which will take effect on October 23, 2024. The main updates are as follows:

• Fulfillment Center Operations Claims must now be submitted within 60 days (down from 18 months) of an item being claimed lost or damaged.
• Sellers can file FBA Customer Returns Claims within 60-120 days (formerly 18 months) of receiving a refund or replacement. Claims should not be filed before 60 days, giving the buyer enough opportunity to return the merchandise.
• Claims for Items Lost in Transit must be lodged within 15-75 days (formerly 14-18 months) of the shipment’s creation date. Claims should not be lodged before 15 days to allow for shipment delivery.
• All other removal claims must be submitted within 60 days of the shipment being returned to the vendor.

This update will certainly be challenging for sellers, especially if they are not accustomed to keeping a close eye on their inventory. This change requires a proactive approach to inventory management and reimbursement claims registration.

Amazon Refund Policy for Multi-Channel Fulfillment Orders:

Amazon also modified its refund policy for Multi-Channel Fulfillment (MCF) orders, which took effect on August 23, 2024.

The new policy defines maximum reimbursement limitations for items lost or damaged during fulfillment, which vary depending on the country.

This change aligns Amazon’s policy with industry norms, resulting in a more consistent approach to managing reimbursements across many locations. Here’s a closer look at the changes and what they entail for sellers.

The revised reimbursement limits per eligible unit are as follows:

• Canada: $400 CAD
• Germany: 275 EUR
• France: 275 EUR
• Italy: 275 EUR
• Japan: 2,500 JPY
• Mexico: $5,000 MXN
• Spain: 275 EUR
• UK: 250 GBP

The above-mentioned limits are the maximum amounts that Amazon will refund for each qualified unit lost or damaged during the fulfillment process.

What Impact Does This Update Have on Multi-Channel Fulfillment Sellers?

Certainly, this update brings Amazon in line with industry practices and provides sellers with a rough idea of what to expect. However, these capped reimbursements won’t fully cover losses for high-value goods. These sellers will have to opt for third-party insurance to cover their losses, as the capped amount may not be sufficient. This additional step will undoubtedly incur extra costs for the sellers.

Here are some frequently asked questions for Amazon Reimbursement Claims!

1.      What are the new deadlines for submitting manual claims?

·          Submit Fulfillment Center Operations Claims within 60 days of reporting an item as lost or damaged.

·         File FBA Customer Returns Claims within 60-120 days after the refund or replacement date.

·         Submit removal claims for items lost in transit within 15-75 days of shipment creation date.

·         All other removal claims must be made within 60 days of the shipment being returned to the vendor.

2.      Are there any limitations to the new reimbursement policies?
The proactive reimbursement policy will not cover all instances. Sellers may still need to file manual claims in some circumstances, such as when an automatic compensation is not granted for missing or damaged items.

3.      Will sellers get compensated for previous FBA inventory claims?
The new policies do not provide retroactive reimbursement for past claims. Sellers will need to follow the modified claims processes going ahead.

4.      How should sellers prepare for this update?
Sellers should educate themselves with the new reimbursement policies, modify their claim filing processes, and continuously monitor their inventory to ensure that they optimize their reimbursement possibilities.

5.      What if a seller disagrees with a reimbursement decision?
Sellers can file a manual claim if they believe they did not get adequate reimbursement or if they disagree with Amazon’s decision on their claim.