FBA or Fulfillment by Amazon is by far the most popular selling model on the retail giant. Amazon takes up the responsibility of warehousing and delivering products along with all the associated logistics. Of course, Amazon does not do so for free and charges sellers an FBA fee for its services. This is very similar to using a staffing agency and paying them for their services. Sellers pay an FBA fee for storage space and the orders that Amazon fulfills. The FBA model does mean, however, that you can face erroneous charges.
FBA Errors and Reimbursement
Amazon FBA makes errors from time to time, and you can actually get reimbursed for some of these errors. Remember you pay FBA fees on every order, so you knowing when to file a reimbursement claim is important. Otherwise, you end up paying more FBA charges than you need to.
I didn’t know much about reimbursements during my first year on Amazon selling hand-carved wooden figurines that I learned how to make using my Optimum online packages. I ended up overcharged on numerous occasions. Luckily, I’m here to make sure you don’t make the same mistakes. Be on the lookout and file reimbursement claims for the following 10 Amazon FBA errors:
- Overcharged Commissions
- Carrier-Damaged Returns
- Incorrectly Deducted Stock
- Refunds for Non-Returns
- Uncredited Restocking Fee
- Lost Return
- Damaged by Shipper
- Refund Exceeds Returns
- Warehouse Losses
- Incorrect Weight/Dimension Fees
Let’s take a quick look at these errors and why you become eligible for a refund when they occur.
Each category of products on Amazon has a commission fee bracket. These fees may range from 6 to 45 percent, depending on the category. The device accessories category usually has the highest commissions and can have even more if the seller offers extended warranties.
Let’s say your products are charged between 8 to 15 percent in commissions. Think of how much money you’ll lose if FBA erroneously charged your product at 15% instead of 8%. This is not a very common error, but it is not unheard of. An erroneously charged commission fee entitles you to file a reimbursement claim.
Sometimes a product on its way back to you may be damaged by the carrier or Amazon, with no fault on the part of the customer returning it. The Amazon warehouse will receive these returns in damaged condition. If the damage makes the product unfit or unsellable, Amazon entitles you to reimbursement.
Incorrectly Deducted Stock
One big advantage of selling on Amazon is that it allows you to track inbound shipments with ease. Inside the Seller Central dashboard, you can check for any issues with a shipment inbound to Amazon. It will also tell you how many units Amazon has accepted as sellable. Sometimes there can be an error where Amazon deducts units after shipment closing. You can file for reimbursement in such cases.
Refunds for Non-Returns
This is one of the most frequently occurring errors on Amazon. The retailer can credit a refund to a customer, even if there was no return. Of course, this refund comes out of your account, which means you lose money. On top of that, the item is not even in your inventory. Track your returns and refunds periodically and file a reimbursement claim in case of a discrepancy.
Uncredited Restocking Fee
When a customer returns a high-value item, Amazon often charges them a 20% fee for restocking the item. Once the item returns to the warehouse, Amazon credits this restocking fee to your account. However, you do not get this fee if there is a non-return or a damaged return. You can file a reimbursement claim if Amazon makes an error in not crediting the restocking fee when it should have.
Ideally, a customer return should find its way back into your inventory. However, sometimes this process encounters some snags. Your return could wind up in another seller’s inventory. Of course, the seller will return your product to the warehouse, where they scan it again. However, often it does not re-enter your FBA account. This entitles you to reimbursement.
Damaged by Shipper
When you ship to Amazon, you expect it to end up at their warehouse in one piece. However, sometimes the shipper you use can damage the items you send. The Seller Central dashboard easily allows you to discover which items the shipper damaged on the way to the warehouse. You can ask for a reimbursement based on Amazon’s policy. Just make sure there aren’t any additional damaged units in the shipment before you file for a reimbursement.
Refund Exceeds Returns
Many customers are over the moon when this error happens. They feel like they got a freebie from a retail giant. However, it is actually money out of the account of small or medium sellers like you. Amazon Seller Central can let you know which customers have received refunds exceeding the value of returns and file for reimbursement.
Amazon operates huge warehouses with hundreds of employees working in each one. With so many humans in one place, accidents will happen, and damaged products will pop up from time to time. At the end of the period, when you reconcile your Seller Central reports, you can see which items Amazon damaged and ask for a refund. This is another prevalent error with Amazon.
Incorrect Weight/Dimension Fees
Amazon can charge your products for a higher weight or dimensions in some rare cases than they actually have. This happened to me in the early days. Every subsequent order carried the wrong charges, amounting to several times my monthly Optimum Premier bills! This can add up to a significant amount when you discover the error after a few weeks or months. Luckily, you can claim a reimbursement in full. To avoid any problems at your end, make sure your mfg staffing is on-point, and you don’t have employees weighing your products wrong. It will save you a lot of confusion and embarrassment.