Fba's Latest Lost and Damaged Inventory Compensation Policy

Amazon's FBA program has updated its policy on lost and damaged inventory. The Amazon FBA service is the cornerstone of many e-commerce businesses, providing seamless storage, packaging, and transportation. However, problems such as lost or damaged inventory may occur, and understanding Amazon's compensation policy is crucial for sellers to effectively reduce losses. This dual approach is designed to simplify the compensation process for sellers while ensuring that they are adequately compensated for losses.

Amazon is responsible for the inventory stored in its distribution centers. If your product is lost or damaged while in Amazon's custody, you may be eligible for compensation. The compensation policy includes two main mechanisms: automatic compensation and manual claims, depending on the circumstances and the seller's proactive measures.

Key components of the policy

Eligibility criteria: Under the new policy, to be eligible for compensation, sellers must ensure that:

The inventory is properly registered before shipping through FBA.

Provide a valid purchase invoice or ownership document.

60 days after missing or damaged inventory is reported, down from 18 months previously.

Reimbursement calculation: Amazon assesses reimbursement based on the cost of the item at the time it was lost or damaged. This includes items lost during shipping to Amazon and items damaged in fulfillment centers.

Automatic reimbursement mechanism

Starting November 1, 2024, Amazon will proactively reimburse sellers for items reported lost or damaged in fulfillment centers. The mechanism is designed to simplify the claims process by automatically issuing reimbursements, in most cases without the seller having to file a separate claim.

How it works:

Amazon initiates the reimbursement process once a fulfillment center reports an item lost or damaged.

Sellers can track these reimbursements through the Reimbursement Report in Seller Central, which provides a detailed overview of all issued reimbursements.

Automatic Reimbursement Coverage: While the system covers nearly all fulfillment center operations claims, sellers must still file manual claims for specific situations, such as:

Removal claims.

Improperly handled returns.

Shipping discrepancies for which no automatic reimbursement occurred.

Reimbursement process

Timeframe: Typically, Amazon reviews discrepancies within 30 days of the discrepancy.

Calculation: Amazon will calculate the reimbursement amount based on the product’s average selling price over the past 90 days, or similar fair market value if historical data is insufficient.

Notification: Sellers will receive a notification in the Reimbursement section of their FBA report once the reimbursement has been processed.

What are some common scenarios for automatic reimbursement?

Inventory lost from Amazon warehouses.

Damage incurred during handling or storage.

Product misplaced and remains missing after a certain period.

Benefits of automatic reimbursement

Saves time for sellers.

Provides transparency and regular updates.

Ensures that common issues are addressed promptly.

Manual claim process

Despite the introduction of automatic reimbursements, there are still some situations where sellers need to submit manual claims. This process is critical for situations that are not covered by the automated system.

Steps to submit a manual claim:

Identify the issue:

Review your inventory reports in Seller Central to identify discrepancies such as missing or damaged items.

Gather documentation:

Gather necessary documentation, including purchase invoices, proof of shipment, and any relevant correspondence with Amazon. For damaged items, photos may be required.

Submit your claim:

Log in to Seller Central and navigate to the Reports section.

Select “FBA Reimbursement” and provide the details of your claim along with supporting documentation. Please be sure to include the Order or Shipment ID.

Monitor Claim Status:

Once submitted, track the status of your claim in Seller Central. Depending on the complexity of your claim, it may take anywhere from a few days to a few weeks for your claim to be resolved.

Follow-up:

If your claim remains unresolved or is denied, contact Amazon Seller Support and provide additional evidence if necessary.

Important Timelines

Claim Submission Window: Sellers must submit manual claims within 60 days of discovery of the loss or damage.

Previous Window: The eligibility period was previously set at 18 months, but has been significantly shortened to make processing claims more efficient.

Adjustments to Time Limits for Manual Claims:

Items lost or damaged at a fulfillment center: Claims must be submitted within 60 days of the item being reported lost or damaged.

FBA Customer Return Claims: Can be submitted 45-105 days after the customer refund or exchange date.

Removal Claims: Can be submitted 15-75 days from the date of shipment.

Amazon’s Review Process

After you submit your claim:

Amazon reviews the documentation provided to validate the claim.

If approved, reimbursement will be issued based on the average selling price or market value of the product.

Sellers can track the status of their claims in the Refunds section.

The update to Amazon’s FBA lost and damaged inventory reimbursement policy reflects Amazon’s commitment to improving the seller experience by reducing administrative burdens and speeding up reimbursement, while still allowing for manual intervention when necessary.

Amazon’s latest FBA reimbursement policy changes are a double-edged sword for sellers. The introduction of an automatic reimbursement mechanism is intended to simplify the process, but sellers still need to remain vigilant to ensure that they do not miss out on reimbursement due to imperfections in the automatic system. At the same time, sellers need to adjust their claims processes to comply with the new claim timeliness policy.

Understanding and utilizing Amazon’s FBA lost and damaged inventory reimbursement policy can help sellers protect their business from unexpected losses. By utilizing the automatic reimbursement mechanism for common issues and submitting manual claims for unresolved issues, sellers can ensure that they receive fair compensation for Amazon’s mishandling.

For a seamless experience in inventory management, monitoring, and claims processing, professional fulfillment providers such as ChinaDivision can help. Our expertise in logistics and inventory tracking ensures that your Amazon FBA business runs smoothly while minimizing the impact of inventory discrepancies.