Amazon Seller Suspension and Cancellation Cover: How Payouts Work

No Amazon seller wants to get suspended but, if it does happen, here’s how the Monitor & Protect claims process works in practice.

For Amazon sellers, having their account suspended has become an occupational hazard. But this doesn’t mean that it’s any less damaging when it happens. Sellers have to contend with the fact that they have little or no funds coming in, while expenses like staff costs and rent still have to be paid.

Monitor & Protect is a comprehensive Amazon seller protection service from Thompson & Holt. It includes account health notifications and listing hijack alerts, to help sellers avoid suspension in the first place. If suspension does occur, Monitor & Protect includes an appeals service, and most sellers are reinstated quickly.

But if sellers are out of action for more than five days, there’s cover to fall back on of up to £50,000 (around $70,000), underwritten by insurance market Lloyd’s of London. Here’s how it all works, including a real example of the claims process in action.

This is an updated version of a post originally published in April 2018.

What does a successful claim look like?

Thompson & Holt told us about a recent successful claim from one of their Monitor & Protect customers – an established business selling printers through all of Amazon’s European marketplaces (U.K., Germany, Italy, Spain and France). Although this business uses other channels as well, Amazon makes up the majority of their sales.

Like all sellers with a heavy dependence on Amazon, a lengthy suspension would be disastrous, so they signed up for the Monitor & Protect service earlier this year.

Then, this October, they were suspended from selling on Amazon. A single buyer complained that the printer they received was inauthentic. Perhaps the buyer made an innocent mistake, or perhaps it was malicious. Either way, the effect was dramatic: a complete account suspension across all five European marketplaces. Just one inaccurate complaint stopped sales in five countries.

The suspension happened on a Saturday, and the seller immediately informed Thompson & Holt. A Plan of Action was submitted within six hours. Amazon replied, asking for invoices to prove that the products were authentic. Despite prompt replies to all their requests, it took ten days for Amazon to reinstate the account. Most sellers on the Monitor & Protect service are reinstated within five days, even when they are suspended at the weekend, so this was unusually slow for Amazon.

Once reinstated, the claims process was handled by Thompson & Holt. The seller needed to provide sales information from the last 12 months for each of the five marketplaces, and confirm their business details. The whole process from claim to payout took a few weeks, and the seller received a reimbursement of thousands of euros for their lost revenue.

So is this a kind of insurance?

Technically this is not insurance, but it serves the same purpose, and is backed by fully regulated insurance companies. Thompson & Holt is an appointed representative of insurance agency JM Marketing Limited, which is authorized by the U.K.’s Financial Conduct Authority. The cover is protected by Lloyd’s of London insurer ArgoGlobal.

But, watch this space. Thompson & Holt plan to offer a standalone insurance policy within the next year.

Who is eligible for the cover?

The suspension cover is included free in Monitor & Protect, which is available to sellers anywhere in the world, selling on any of Amazon’s marketplaces.

The only requirement is that they have been selling on Amazon for over a year, and have an average seller feedback rating of 3.49 or higher. They must meet all of Amazon’s own requirements, of course, such as having product and general liability insurance.

How does it work?

The cover reimburses sellers for revenue lost while their account was suspended, less any expenses that they saved, for example by not having to ship orders or buy stock.

Sellers who subscribe to the Monitor & Protect package, and subsequently have their account suspended, will need to contact Thompson & Holt straight away and provide them with the evidence needed to support their appeal.

Thompson & Holt will write a Plan of Action for the seller to submit to Amazon. There’s no charge for this, as the Monitor & Protect service includes one suspension appeal per month as part of the package.

The suspension cover kicks in after the first five days of suspension. So, if a seller was suspended for ten days, they would be reimbursed for up to five days of their average revenues. If a seller is suspended for five days or less, they won’t be able to make a claim under the cover.

The suspension cover runs for a maximum of 65 days from the date of the suspension, or until the total to be reimbursed reaches £50,000 (around $70,000) – whichever happens first.

Rather than pay out on a daily basis, sellers make a claim when they’ve been reinstated, or reached the limits of the cover. Their claim will then be reviewed and when it’s been processed, they will receive a lump sum for the whole period that they were suspended.

What types of suspension does it cover?

The Monitor & Protect cover is designed to help sellers who have been suspended through no fault of their own. A primary example is a seller who has 300 great reviews, but gets suspended because one of their competitors starts leaving negative reviews, claiming their products are fake. The seller has invoices to prove their products are genuine, but a reinstatement might take weeks if Amazon has a backlog.

It doesn’t cover sellers who have tried to ‘game’ Amazon. Sellers who have faked invoices, used multiple accounts without authorization, or otherwise deliberately breached Amazon’s Terms of Service won’t be covered.

Likewise, the cover won’t help sellers who are suspended for avoidable problems. This includes performance issues such as a high order defect rate (ORD), high late shipment rate or product quality issues. These are aspects that sellers are in control of, and can avoid by improving their business processes. More detail can be found in the Terms & Conditions.

How is the reimbursement calculated?

The payment is calculated based on your average daily revenue through Amazon. This is easy enough to prove, by looking at a seller’s Amazon account data.

So, for example, let’s say that a seller normally sells £60,000 per month through their Amazon account, a daily average of £2,000. That stock costs them £15,000, which is a daily average of £500, and their account was suspended for 12 days.

The seller would be able to claim £1,500 for each day they were suspended. Sellers can’t claim for the first five days of suspension, so their total reimbursement would be £10,500.

Monitor & Protect

The suspension cover is a feature included at no added cost, in Thompson & Holt’s Monitor & Protect service, which is designed to help sellers avoid account suspension happening in the first place. Monitor & Protect connects to Seller Central through Amazon MWS, then constantly processes data to find potential problems with sellers’ accounts.

It sends real-time alerts detailing any account health or policy issues that could lead to a suspension. Sellers also receive alerts when negative feedback is left, or if one of their listings is hijacked by a rival. In this case, Thompson & Holt provide a free cease and desist letter to send to the hijacker.

If the worst should happen, the Monitor & Protect package also includes one free account suspension appeal, as mentioned above, and also three listing suspension appeals per month. It can also alert sellers if they lose the Buy Box, or when competitors make price changes, or if it finds potential defects in a seller’s listings.

The Monitor & Protect service, complete with suspension cover, account health alerts, hijacker notifications and suspension appeals, costs £200 (around $280) per month, and is available to Amazon sellers worldwide.

The Amazon marketplace is a tough place to sell. Competition is fierce, and rival sellers can play some nasty tricks to get you suspended. Monitor & Protect, with the suspension cover that’s included, is a comprehensive service that not only helps prevent the worst from happening, but also provides a great safety net when it does occur.

Keep your Amazon business safe with Monitor & Protect

This post was sponsored by Thompson & Holt.

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