Did you know? You can claim compensation from Amazon FBA in these ten situations

Amazon FBA is a fantastic business opportunity, but it is imperative to monitor the fees they charge.

Amazon's largest category is still books (44.2 million products), but now Amazon has over 120 million different products. So imagine how much inventory is in the warehouse.

When you combine this much inventory and FBA with third-party sellers and customers being promised lightning-fast order shipping speeds, mistakes are bound to happen.

So Amazon has procedures in place to help detect problems and compensate sellers. For example, if you cancel a shipment with UPS and prepaid shipping through Seller Central, Amazon should clear that charge.

The problem is, liquidations sometimes go wrong. Some problems Amazon can never fix.

Fortunately, you can monitor your own account or get help auditing your account from Amazon’s clearing service.

Here are the main reasons why FBA offers liquidation when a claim is filed.

1. The customer returned the product but it was not returned to the inventory.

The most common reason why Amazon FBA will return funds to your account is that a customer returned an item that was not returned to your inventory. The item may have been placed in another seller’s inventory, or it may have been moving around the warehouse without being scanned into the seller’s account. Customer returns are common, and the highest volume of errors in FBA can be attributed to returns.

2. The actual quantity of goods received by the customer is greater than the quantity in the order.

Another possible issue is that a customer receives more products than they ordered and purchased. If this is not detected, there will be a loss. However, if the discrepancy is discovered through orders and inventory, Amazon will refund the amount.

3. The customer refund amount is higher than the actual amount.

When a customer chooses to return an item, they should be refunded the exact amount they paid. But this isn’t always the case. Sometimes, a customer may be refunded more than they paid. It’s hard to pinpoint why this happens, but it happens. Amazon may also remove the current price of the item, or mix in a past price with the current price.

4. Inventory is lost.

Another common problem is inventory loss. Imagine Amazon has 120 million products in its warehouses. It is easy for inventory to be lost or misplaced. If the inventory in your account is incorrect, you can apply for compensation for losses.

5. The inventory was damaged by Amazon staff.

Similar to the above, Amazon employees can damage inventory when fulfilling orders, moving inventory around in warehouses, or placing new inventory. Amazon should automatically reimburse you when this happens, but even if you receive a reimbursement notice, you may not be reimbursed. You may find that there is a difference in how much inventory your account should have, and undocumented inventory damage may be the culprit.

6. Damage or loss when the carrier enters the inventory.

When you send products to FBA, you need to submit the number of units of each product. Amazon may not receive all the goods, or may receive damaged goods. When this happens, you will be compensated for the value of the product (or a unique calculation method that takes into account the value of the product, what price it sells for, and the sales price of similar products).

7. Wrong shipping size or weight.

The cost of sending a product to a customer depends in part on the size and weight of the shipment. There are 6 different shipment classes: Small, Large, Small, Medium, Large, and Special. For example, a Large Standard-Size shipment weighs under 20 pounds and has dimensions below all of the following limits: 18 inches longest, 14 inches in the middle, and 8 inches short.

If overcharged for the wrong level of goods this would be a huge clearance application, especially given the error could be backdated to 18 months for refunds.

8. The returned product was not received.

Sometimes a refund is given even if the customer didn’t actually return the product. They rarely keep the refund even if the product was forgotten to be returned. Amazon should spot this issue and make sure you are reimbursed for the price of the product, but this doesn’t always happen.

9. Unsaleable inventory that is damaged and returned by customers.

If a customer buys a pair of shoes you sell, wears out the sole, and then returns them to Amazon, that is unsellable inventory. Amazon will likely give them a full refund, but they should also make sure you are reimbursed for the cost of the product. If the product was damaged by a customer and you are not reimbursed for the unsellable inventory, you can file a claim with Seller Central Support and get reimbursed.

10. The commission is wrong.

Similar to the issue of storage fees, commission errors do accumulate over time. Some categories charge 8% commissions, some 15%, and some even higher. If the commission charged is higher than expected, a claim can be made, and the claim period is 18 months. In one case, the seller received a six-figure compensation from such a claim.

Summarize.

These are the most common questions about Amazon FBA fees, but there are many others.

Amazon warehouses are busy. So, you need to do everything you can to protect your business. Make sure to double-check your Seller Central reports on a weekly or monthly basis.