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The Amazon Refunds/Returns/Reimbursements Cycle ​

The Stages Of A Refund Cycle ​

When a customer is not satisfied with their purchase:

  1. Amazon refunds the customer
  2. The customer returns the item to an Amazon Fulfillment Centre
  3. Amazon inspects the returned item and determines its condition:
    • Sellable — returned to your inventory as fulfillable. No compensation due.
    • Not sellable, Amazon not responsible — returned to your inventory as unfulfillable. No compensation due.
    • Not sellable, Amazon responsible — item is disposed of and you are entitled to a reimbursement.

Summary Of The Cycle Milestones ​

  1. The customer obtains a refund from Amazon
  2. The customer returns the unsatisfactory item
  3. Either:
    • The item is returned to your inventory (fulfillable or unfulfillable) — no compensation due, OR
    • The item is disposed of — you are due a reimbursement

Reimbursement Options ​

When your inventory is lost or damaged under Amazon's control (by an Amazon-partnered carrier, in the fulfillment center, or during delivery), Amazon will either:

  • Replace the item(s) with one with the same FNSKU, or
  • Pay you the evaluated replacement value of your lost inventory, less any applicable FBA and Selling on Amazon fees

You have no say in which option Amazon chooses.

How Is A Refund Condition Settled? ​

A refund is considered settled by one of:

  • Returning the item to your inventory (sellable or unfulfillable condition)
  • Reimbursing in kind — returning a fulfillable identical item (Amazon can do this even for private label products)
  • Reimbursing in cash — monetary compensation

Reimbursement Timing ​

  • A customer must return the item within 30 days of requesting a refund
  • Amazon requires another 15 days to process the reimbursement
  • There is no point looking for reimbursements before 45 days have passed since the refund date

Statutes Of Limitation ​

You cannot claim reimbursements for refunds older than 18 months.

How Can Amazon Reimburse In Kind For Private Label Products? ​

Consider this scenario:

  1. Amazon loses some of your inventory during inbound or transfer processing
  2. They reimburse you in cash for the loss
  3. Later, they find the lost inventory
  4. Amazon could either put the items back in your inventory and claw back the cash reimbursement, or keep them separately for future in-kind reimbursements

How Much Will Amazon Reimburse? ​

In kind: The unit returned to your inventory accounts for full compensation, but you still need to sell it again.

In cash: Amazon applies rules to determine a "fair" replacement value:

  • They typically reimburse a percentage of the order amount — never the full amount
  • This may impact your margin for that returned order
  • Check whether the reimbursement covers at least your COGS
  • Note that Amazon will have refunded (in most cases) your referral fees and some FBA fees