When selling on Amazon, just like any other 3rd party platform, there is a chance your inventory could be damaged somehow. Keep this in mind; there’s always a risk that you could lose the cost of goods, plus the cost of miscellaneous fees, to list and/or to ship to the platform’s storage facilities.
But unlike some other platforms, Amazon has policies in place that have you somewhat covered. The caveat being, of course, that you know what to look for, you properly document your product shipments and condition, and you follow the guidelines required for coverage qualification (i.e. correct shipping method and packaging). See Amazon’s help page here.
What is covered under the FBA policy?
- Items that are damaged while in a Fulfillment Center (FC)
- Items missing for 30 consecutive days within an FC
- Items that were lost or damaged while in transit to an FC or being shipped from an FC to a customer when using an Amazon-partnered carrier and distributor.
Of course, all items must be within the prep, packaging, and shipment requirements for each product type when shipping in order to be qualified for coverage under the policy:
“Important: Small parcel items shipped using Amazon-partnered carriers that are damaged due to inadequate packaging are not covered. Always follow our prep, packaging, and shipment requirements when you ship to an Amazon fulfillment center to avoid damage in transit.”
What action does Amazon take to make this right?
Amazon will either:
- replace the item with the same FNSKU, or
- reimburse you using an estimated sale price which is based on your sales history, the average FBA selling price, and the specific ASIN sales history.
What if the reimbursement is lower than your actual cost of goods?
You can request a reevaluation and provide original invoices. If you have a quality control process (which includes a detailed process and clear images) recording the inspection of goods and the quality of the products at that point in time, this is great supporting documentation! Unfortunately, there is a reimbursement limit of $5,000 per single item. Third-party insurance is strongly recommended for these highly valued items.
How to file a claim/submit a case?
Login to your Seller Central account – select the “Get support” button from your main account page.
Get support >> Contact US >> Selling on Amazon >> FBA issue >> Something else >> Email
Subject Line: “Other FBA issue: APPEAL DEFECTIVE”.
Write them a detailed email including what you found from your reports. An example:
“Dear Seller Support
We recently received an unfulfillable item from FBA. The item is [ASIN – title], SKU —-, Order # ——–. The customer returned the item and stated, “____”. Further, the returns disposition notes that it was “DAMAGED_BY_FC”/”DAMAGED_BY_CARRIER” indicating that the item we sent to FBA in brand new condition was damaged by Amazon’s Fulfillment Center/Amazon’s partnered carrier or distributor.
I’m respectfully requesting reimbursement for the poor product handling that Amazon is covering under its FBA lost and damaged inventory reimbursement policy. It is unreasonable to hold me responsible for an item that was damaged by Amazon and therefore, cannot be resold in brand-new condition and/or at all.
Attached is a picture of the return packing slip I received from FBA along with pictures of the condition of my product. We have also included photos of the product pre-fulfillment and how we pack and ship to the FCs which are in line with Amazon’s prep, packaging, and shipment requirements.
We love selling on Amazon and we would really appreciate it if Amazon takes the proper measures to fairly remedy the issue. Please contact us for any other information you need regarding the issue.
Please see attached invoices, QC, return packing slip and images, pre-fulfillment product and packaging images.”
Why did my reimbursement get reversed?
Amazon’s FCs are vast, with continuously moving parts, and sometimes things get lost. But sometimes things get found again, and if your items are found at a later date, a credit reversal may occur. If this is a seasonal and/or discontinued product, we recommend appealing this decision.
How long do I have to file a claim?
- 0-9 Months: items missing from a fulfillment shipment to the FC
- 0-18 Months: Lost or Damaged inventory
Are my items covered by the FBA policy?
All prohibited FBA product items are not covered as they are not suitable for the fulfillment process and have specific product requirements and restrictions. Expired items, Restricted Products, products damaged due to inadequate packaging, and items lost or damaged by customers are also not covered by this policy.
Was my item damaged by the FC?
To check whether or not your item was deemed damaged by the FC, you’ll need to log in to your Seller Central account and review your fulfillment return reports to identify if there were any previous returns made for the ASIN(s) in question.
Reports >> Fulfillment >> Returns
Was my item damaged by a customer?
Unfortunately, as the popularity of online shopping has grown over the years, there has been an upward trend of customers who buy new items and return them in damaged condition, or swap them out entirely and send back their old used items.
Amazon does not have a robust system for adequately checking every single return, and often they return these damaged or used items back into your healthy inventory without notifying you.
This causes your new customers to receive damaged or used items, creating a poor customer experience and product/seller review. We recommend appealing these situations by submitting a case to Seller Support by using the “Get support” button from your account. Amazon does have a fraud department that will investigate bad buyer behavior.
Though it is an unfortunate reality that merchandise is sometimes lost, damaged, or otherwise compromised, it is certainly good that Amazon recognizes it happens, and has systems in place to recover some of your losses.