Lesson 7 of 8
Managing Returns and Reimbursements
What happens when a customer returns an item, and how to claim the reimbursements Amazon owes you.
Returns are a normal cost of retail, and they rise as you sell more. What is not normal is leaving money with Amazon that it owes you. This lesson covers how the return process works and, more importantly, the four reports you check to make sure every reimbursement you are due has actually arrived.
How a return happens
- The customer opens a return. Amazon refunds them immediately.
- You get an email. The money has already left your account.
- The customer has 45 days to send the item back.
- If it never arrives, Amazon is supposed to reimburse you automatically.
The problem is in step 4. Amazon does usually reimburse, and it does not always. Nothing tells you when it has been missed, so an unclaimed reimbursement is money quietly lost. Checking is your job.
Two situations to know about
Customer damage is not reimbursed. If the return is logged as damaged by the customer, Amazon takes no responsibility and pays you nothing.
This is where the advice from the unfulfillable inventory lesson pays off. Set Amazon to return unfulfillable stock to you automatically, and then look at what arrives. Returns marked as customer-damaged are frequently in perfect condition, because marking an item as damaged is the quickest way for a buyer to get free return postage. When you have an untouched item in your hand that was logged as damaged, open a case with the evidence and ask for reimbursement.
Contact the buyer early. When a return opens, message them and ask what was wrong. It costs a minute, it sometimes resolves the issue without a return at all, and it makes negative feedback less likely.
The four reports
1. Payments transaction report
Reports, then Payments, then Transaction view. Filter by Refund and set a date range. This gives you every return the customer started, with order IDs.
This is your starting list: these are the orders that should each end in either the item coming back or a reimbursement.
2. FBA customer returns report
Reports, then Fulfilment by Amazon, then FBA Customer Returns. Set a date range and request the report as CSV.
Open it and filter the status column to Reimbursement. That gives you the list of returns Amazon has decided to reimburse rather than return the stock. Note the order IDs.
3. Reimbursements report
Reports, then Fulfilment by Amazon, then Payments, then Reimbursements. Download for the same date range.
Now cross-reference: take the order IDs from report 2 and look for them here. Anything in report 2 that is missing from report 3 is money you have not been paid. Those go to Seller Support.
4. Inventory adjustments report
Inventory, then Show more, then Inventory Adjustments.
This covers stock lost or damaged inside Amazon's network, which is separate from customer returns. Filter the reason column and keep codes D, E and M: disposed, damaged by Amazon, and misplaced. Amazon publishes what every code means, and the list is worth reading once.
One condition: for a claim to succeed, the disposition must have been sellable. Amazon reimburses for sellable stock it lost or damaged, not for stock that was already unsellable.
Note the transaction IDs and claim them.
How to raise the claims
One piece of practical advice worth following: do not send Amazon a spreadsheet of fifty items. Break claims into small cases of around five or six items each.
A short case with a few clear items gets read and actioned. A long list gets a generic reply, and you start again. Several small cases take less of your time overall than one large one that has to be reopened.
Make it a routine
This work is repetitive and follows fixed rules, which makes it a good candidate for delegating to an assistant. If you are doing it yourself, put it in the calendar every two weeks or once a month.
The important thing is that it happens on a schedule. Reimbursements have claim windows, and an unclaimed one eventually becomes uncollectable. On a business selling steadily, this check is one of the higher hourly-value tasks available, because it recovers money you have already earned rather than trying to earn more.