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In the wake of the recent good news that it now allows Venmo transactions, Amazon just made another staggering reveal, this time to its reimbursement policy. Unlike the Venmo announcement, though, this one is certain to put FBA sellers in a very sour mood.
The changes took effect as of November 11, 2022, but what are they and how will they really affect FBA businesses?
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How Is Amazon’s New Reimbursement Policy Different?
Amazon’s reimbursement policy currently states:
“If an item you send to us as part of the Fulfillment by Amazon (FBA) service is lost or damaged at a facility or by a carrier operated by Amazon or on behalf of Amazon, we will replace that item with a new item of the same FNSKU or we will reimburse you for it.”
This statement has not changed from the previous version of the policy; the main difference now is how much they will reimburse sellers. The new policy will reimburse sellers at a discounted rate for any unfillable items (damaged or lost items) that cannot be sold as “New.”
Amazon currently uses several indicators to determine a reimbursement value:
- Median price seller has sold that item on Amazon over the last 18 months
- Median price other sellers have sold that item on Amazon over the last 18 months
- Current list price for that item (or mean list price if multiple listings)
- Current list price for the same item from other Amazon sellers
It is not yet clear where the discounted rate will come into play with these indicators, but it is worth keeping in mind that a shipment to Amazon or a fulfillment center operations claim will only reimburse the estimated proceeds of that item, aka the estimated sales price minus referral fees and fulfillment fees.
How Will Amazon’s Reimbursement Policy Affect FBA Sellers?
The new policy could drastically impact profit margins for FBA sellers, depending on how discounted the reimbursements are, and how many returns a seller receives. A reduction in profit will especially be felt in Q4 for sellers seeing higher sales and return volumes for the holiday period.
Aside from the immediate effect of lost profits, a longer term adjustment may be made by FBA sellers to move to FBM to make up for increased prices and more FBA changes that take money out of sellers' pockets.
What Can Amazon Sellers Do to Fulfill Reimbursements?
For now, the process of filing a claim for reimbursements is unchanged. The policy change goes into effect for eligible claims as of November 11. However, Amazon’s policy pages do not clarify if the discounted rate for reimbursements will be applicable to all claims submitted after that date, regardless of the date the item was lost.
Presently, Amazon owes money to 99% of sellers. If you’re looking for a way to claim back what is owed to you by Amazon, Carbon6 tools like Seller Investigators can help. As experts in Amazon reimbursement claims, Seller Investigators helps you get paid by reviewing your FBA account to compile case reports and submit cases on your behalf.
