Inflation is hitting, raw material prices are rising, and freight costs are becoming more expensive. To add insult to injury, the buying mood is dropping – nobody has any money to spare right now.
Well, why do you donate to Amazon, then?
To the extent that you use the Fulfillment by Amazon (FBA), it is extremely likely that you are affected by FBA errors – and therefore giving away money to Amazon every month. The benefits of the service are obvious: no high investments for own logistics, no staff costs, no need for expensive storage space. Especially for small and medium sellers, this is a strong argument for using FBA.
But, as always in life, there is also the flip side of the coin. With all the complex operations and huge amounts of stock movements in mind, it’s no wonder that mistakes happen. The problem isn’t the errors, though. It’s the fact that Amazon won’t reimburse you proactively.
So, what can you do to make sure you get your money back?
Most Common FBA Error Types and Requirements for Refunds
First, you need to understand where FBA errors can occur and what types of errors exist. The most common and costly errors in the Amazon FBA process can be divided into five groups:
Inventory/stock:
- Several of your items are missing.
- Within their warehouse, your products were damaged in such a way that they are no longer available for sale.
- Amazon destroys items in saleable condition without your consent and before the 30-day period has passed.
Lost in warehouse:
- The customer has returned the item which has been scanned at the entrance. But it never makes it back to your inventory.
- The customer has returned the item but due to a missing scan, it doesn’t appear in your inventory.
Missing return:
- The customer has requested the return of the item and received a refund. But you have not been refunded the respective amount by Amazon, even though the refund was issued more than 60 days ago.
Inbound shipments:
- You shipped your products to an Amazon warehouse but some or all of them never arrived at the destination.
- Amazon removes some of your inventory after the shipment is closed.
FBA fees:
- Amazon is overcharging you because your products were measured improperly.
What requirements Must an Item meet to be eligible for a refund
- The item must have been registered to FBA at the time of loss.
- The item must meet FBA product requirements, as well as inventory guidelines.
- Amazon was provided with a delivery schedule containing the exact items and quantities that you would have provided
- The missing item is not pending disposal or has not been disposed of at your request.
- The item wasn’t defective in the first place and has not been damaged by the customer.
- Your seller account is not blocked at the time of the refund request.
Which Reports Need to Be Checked for an FBA Error Refund?
In total, you need data from up to 12 reports to check your inventory. This is the only way you can find errors associated with orders, such as returns that were not credited back to you as a seller because the item in question was not re-booked after 45 days.
Here are two examples of how to handle manual refunds.
Refund for Unsellable Items Due to Amazon’s Fault
You can view all returns received by Amazon in the “FBA customer returns report” in Seller Central. If the “Item Condition” column states “Damaged” or “Carrier Damaged”, you have a claim for compensation.
Now you need to check if the case reported by Amazon has already been refunded. To do this, in the “Reimbursements report”, find the Amazon order number with the identified compensation case and check if a refund has already been received.
If no refund is recorded, you will need to submit the identified case data to Amazon via Seller Central. However, be sure to submit the claims in a timely manner. Some of them have an expiration date of, for example, 90 days.
Reimbursements for Unreturned Items
You can find the expired return requests in the “sales tax report”.
| Expired return requests are returns over 45 days old, for which the customer already received a refund, although he did not return the item. |
To view this, click “Payments” and select “Tax Document Library”. Under “Sales Tax Reports”, click “Generate a tax report”. Orders shipped via FBA can be found in the SALES_CHANNEL column under AFN.
In the list, you can now filter for the refunds for which there is no return (i.e. only REFUND, but no RETURN under TRANSACTION_TYPE). Now check the orders for the refund. This info can be found in the “reimbursements report”. If there is still no refund after 50 days, you can report the case through Seller Central and request a reimbursement.
In fact, those are easy examples. Other errors are more difficult to spot. The problem jumps out at you, doesn’t it? It can consume several hours each day to analyze all the reports. Some sellers assign several employees to do this – and pay their salaries, of course.
Detecting FBA Errors: Isn’t There an Easier Way?
It takes a lot of work and is seldom ever thought of as being affordable to keep the expenses of Amazon FBA errors under control. Especially, when you’re not just managing ten SKUs with 20 sales a week.
SellerLogic Lost & Found analyzes the data from all relevant FBA reports and detects the above-mentioned FBA error types fully automatically – even up to 18 months retrospectively.
- Each conspicuous transaction is created as a separate case.
- The individual cases are prepared in an easy-to-understand manner and saved as a ready-to-copy template.
- All you have to do is open a case in Seller Central, transfer the case ID or insert the text pre-formulated by SellerLogic.
- If Amazon does not accept a certain request, our trained Customer Success Team will help you to get the money from Amazon after all. Every rejection is checked manually by our professionals.
Learn how SellerLogic Lost & Found works exactly: Automated Identification of FBA Errors
How Much Cash Are You Losing to Amazon on Average?
Tools and software are a great way to automate your search for FBA errors and, therefore, save time and staff costs. But what are you losing on average?
The occurrence of errors is mainly dependent on the order volume. Hence, very small sellers are less affected than medium to large ones. However, the following applies to all: Manually searching for FBA errors is very time-consuming and ties up a lot of resources.
A tool that does this work is therefore a no-brainer, even if it costs a bit of commission. After all, you have nothing to lose: Either you lose one hundred percent of the money or gain 80 percent.
| As a result, mid-sized FBA companies can lose several thousand euros per year. On average, each seller who fails to analyze their FBA errors loses $6,480 per year.* |
Larger companies can easily lose five- to six-figure amounts. Not a sum you’d just donate to Amazon out of goodwill, is it?
Final Thoughts
Make your own butter and bake your own bread – it’s possible! But the effort is enormous for something you can do quickly with a purchase in the nearby supermarket, nowadays even with a click.
Why, then, waste your time on manual checks when a tool can do the work for you – and even finds more errors than you possibly would?
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About SellerLogic
SellerLogic is a Germany-based company specializing in the development of software solutions for Amazon sellers. Their current offer consists of two software solutions: The SellerLogic Repricer and Lost & Found. SellerLogic’s Repricer optimizes product prices, enabling sellers to secure the Buy Box and increase their sales. The Lost & Found solution enables FBA sellers to claim reimbursements arising from FBA errors in Amazon warehouses. Moreover, SellerLogic’s Customer Success Team provides guidance and consultation in regard to the communication with Amazon Seller Support.
* The calculation is based on errors found with Lost & Found customers. (Status: January 2021)