FBA Inventory Reimbursement Explained: What Amazon will and Won’t Pay for

TL;DR

• Amazon reimburses lost, damaged, or mishandled inventory but not customer-damaged or expired items.

• Claims must be filed within 18 months, and proper documentation is required for approval.

• Key reports like Inventory Adjustments and Refund Reports help track missing reimbursements.

• Amazon won’t reimburse third-party shipping errors or labeling mistakes.

• Working with a reimbursement specialist helps maximize recovered funds efficiently.

• Automated tools streamline reimbursement tracking and filing, saving time and effort.

When selling on Amazon using Fulfillment by Amazon (FBA), you trust Amazon to store, pack, and ship your products. However, mistakes happen, and your inventory can be lost, damaged, or mishandled in Amazon’s warehouses. To compensate for these errors, Amazon provides FBA inventory reimbursement, but not all losses are eligible for repayment.

Understanding what Amazon will and won’t reimburse can help sellers recover lost money while avoiding unnecessary claims.

What is Amazon FBA inventory reimbursement?

Amazon has a policy to compensate sellers when their FBA inventory is lost or damaged while under Amazon’s control. This includes cases where inventory is:

• Lost or damaged in an Amazon warehouse

• Destroyed by Amazon without seller approval

• Lost or damaged during shipment between fulfillment centers

• Not returned to inventory after a customer refund

While Amazon automatically reimburses some cases, many issues go unnoticed, requiring sellers to track errors and manually file claims.

What Amazon WILL reimburse

Amazon will compensate sellers for inventory issues when the loss or damage is Amazon’s fault. Here are some common situations where Amazon approves reimbursements:

1. Inventory lost or damaged in an Amazon warehouse

If Amazon misplaces or damages your products in their warehouse, they owe you a reimbursement. This is known as Amazon warehouse damaged reimbursement, and it applies when:

• Inventory is lost due to warehouse mishandling.

• Items are damaged by Amazon employees.

• Products are broken during internal transfers between warehouses.

2. Customer returns not processed correctly

When a customer returns an item, it should be restocked or marked as unsellable. However, sometimes:

• The returned item is never added back to your inventory.

• Amazon refunds the customer but fails to deduct the amount from your account.

• A returned product is marked as damaged by Amazon, making you eligible for compensation.

3. Inventory lost in shipment between fulfillment centers

If Amazon moves your stock between fulfillment centers and loses some units in transit, it must compensate you. However, sellers need to track these shipments because Amazon does not always issue automatic reimbursements.

4. Uncredited removals and disposal orders

If you request a removal order to have unsold inventory returned, but Amazon fails to send all units back, you are entitled to reimbursement. The same applies if Amazon agrees to dispose of inventory but does not provide proof that the items were destroyed.

What Amazon WON’T reimburse

Amazon does not cover every type of inventory loss. Here are some cases where sellers won’t receive reimbursement:

1. Items damaged by the customer

If a customer returns a damaged item but Amazon determines the damage was caused by the buyer, they will not compensate you. Instead, the item will be classified as unsellable inventory, leaving you with a loss.

2. Expired or defective products

Amazon does not reimburse inventory that expires while in storage. If your products have an expiration date (such as food, supplements, or cosmetics), they must be sold before they expire. Similarly, if customers report products as defective, Amazon may not approve reimbursement unless the defect is proven to be Amazon’s fault.

3. Incorrect product labeling

If a product is mislabeled or missing barcodes, Amazon may refuse to store or ship it, resulting in a loss. Since labeling mistakes are considered the seller’s responsibility, Amazon will not reimburse these errors.

4. Third-party shipping errors

If you use a third-party logistics company (instead of Amazon’s partnered carriers) and inventory gets lost or damaged before reaching Amazon’s warehouse, you are responsible for the loss. Amazon only reimburses items once they are in their possession.

5. Over 18 months old claims

Amazon has a time limit for filing claims. Most reimbursement requests must be submitted within 18 months of the issue occurring. If you fail to track errors in time, you may lose the chance to recover your money.

How to maximize your FBA inventory reimbursement claims

Recovering lost money through Amazon FBA inventory reimbursement requires a proactive approach. Amazon does reimburse sellers for lost or damaged inventory, but many claims go unnoticed or are denied due to incomplete documentation. To maximize reimbursements, sellers need to track their accounts carefully, submit claims correctly, and consider professional assistance when needed.

Here’s how to ensure you recover every dollar you’re owed:

#1: Track inventory losses regularly

Amazon does not always automatically reimburse sellers for inventory issues. Some errors slip through the system, and it’s up to the seller to find discrepancies and file claims.

Sellers should regularly check Inventory Adjustments, Refund Reports, and Reimbursement Reports in Amazon Seller Central. These reports help identify missing inventory, incorrect customer refunds, or unprocessed reimbursements.

For example, if you sent 1,000 units of a product to an Amazon warehouse, but only 980 units appear in your inventory records, you may be eligible for reimbursement for the missing 20 units. Checking the Inventory Adjustments Report can confirm if Amazon lost or damaged the items, allowing you to file a claim.

Regular tracking ensures errors don’t go unnoticed, helping you recover money Amazon owes you.

#2: File claims with proper documentation

Amazon does not approve claims automatically—they require clear evidence before reimbursing a seller. If claims lack proper documentation, Amazon may reject them or delay processing.

When submitting a reimbursement request, make sure to include:

• Shipment ID – If inventory was lost in transit, provide tracking details.

• Product ASIN/SKU – Identifies the exact product in question.

• Date of the incident – Helps Amazon locate the issue in their system.

• Screenshots or reports – Attach inventory reports, adjustment logs, or refund discrepancies to prove your case.

For example, if a customer returns an item, but it is never added back to your inventory, you need to submit:

• The refund transaction ID.

• A screenshot showing the missing inventory record.

• The order number and date of the return.

Without this information, Amazon may reject your claim due to a lack of proof. Detailed documentation increases the chance of approval.

#3: Work with an Amazon reimbursement specialist

Manually tracking every error is time-consuming, especially for high-volume sellers. Hiring an Amazon reimbursement specialist can simplify the process and increase the amount of money recovered.

A reimbursement specialist:

• Finds missed reimbursement opportunities that sellers might overlook.

• Files claims correctly with all necessary documentation, reducing the chances of rejection.

• Saves time and effort by handling the entire process while sellers focus on growing their business.

For example, a seller with thousands of orders per month hires a reimbursement specialist. The specialist:

• Audits the last 18 months of transactions to find missing reimbursements.

• Files dozens of claims for lost shipments, damaged items, and incorrect fees.

• Recovers thousands of dollars that would have otherwise gone unnoticed.

Since reimbursement specialists only get paid when they recover money, sellers don’t pay upfront fees, making it a risk-free way to increase profits.

#4: Use reimbursement automation tools

For large sellers handling thousands of transactions per month, manual tracking is nearly impossible. Automated reimbursement services help scan accounts, detect errors, and file claims efficiently.

These tools:

• Scan accounts in real-time to detect missing inventory, incorrect fees, and refund errors.

• Save time by flagging discrepancies automatically.

• Increase refund amounts by identifying claims sellers might miss.

For example, a seller using Amazon seller reimbursement services activates an automation tool. The tool:

• Scans their account daily for lost inventory or overcharged fees.

• Automatically files claims when discrepancies are found.

• Recovers thousands of dollars each month without any manual effort.

Many tools offer a free account audit, showing sellers how much money Amazon owes them before they commit to using the service.

Final thoughts

Amazon FBA inventory reimbursement helps sellers recover money when Amazon mishandles inventory, but not all cases qualify for repayment. Amazon reimburses losses caused by warehouse damage, lost shipments, and return errors, but they do not cover customer damage, expired items, or labeling mistakes.

To ensure you recover all lost funds, sellers should track inventory reports, file claims promptly, and consider working with an Amazon reimbursement specialist or using automated reimbursement tools. Staying proactive with reimbursements can help protect profits and keep your FBA business running smoothly.