Amazon runs like clockwork, doesn’t it? It’s formidably well-organized, with industry-leading processes for everything they do. Their technology is second-to-none too. It has to be. This is a juggernaut with $136 billion in annual sales that still retains a reputation for the best customer service on the planet.
But Amazon do make mistakes. Every business does. And for a business of this size, handling more than two billion units through FBA in 2016, even a fantastically small error rate could still impact millions of orders.
For marketplace sellers with inventory stored and shipped using FBA, those errors hit them directly. Stock can be damaged or lost in the warehouse, fees can be overcharged, and reimbursements can be overlooked.
Amazon do pick up on many of their mistakes but some still fall through the cracks. If your order volume is high, those errors really add up. That’s where Refunds Manager comes in. Established in 2012, this company is completely focused on auditing FBA reports and detecting mistakes that Amazon have made, but not corrected.
Refunds Manager has over 3,000 users, ranging from small sellers who have got back thousands of dollars, to some of Amazon’s largest sellers with total reimbursements amounting to hundreds of thousands of dollars. Here’s how to find out if Amazon owes you money too.
Does Amazon really make mistakes? What kind?
Yes, they really do. When you consider the physical nature of the business, the size of Amazon’s fulfillment centers, and the number of people needed to store, pick, pack and ship products, then errors are bound to happen.
What kind of mistakes occur? Let’s take a simple example. Say I send 100 cups into FBA, and over time I sell 20 of them. I know I should have 80 cups left, but my inventory is showing only 75. Something has clearly happened to those five cups – maybe they’ve been lost, damaged, improperly scanned, misplaced or even stolen. Those kind of things happen in warehouses of all sizes.
Would you notice that a few units of inventory are missing? Many sellers do not regularly audit and reconcile their inventory, so they wouldn’t know anything is out of order. Often, the first they hear of it is when Amazon picks up on the error and takes action themselves.
Others mistakes that happen include:
- Inbound items being damaged or lost by a shipper.
- Customers asking for a return, and receiving a replacement but never sending the original item back.
- Amazon picking up on a problem, but not refunding the correct amount.
You can find a full list of 19 different “case types” in Refunds Manager’s FAQ.
Refunds Manager didn’t start out to be experts in FBA reimbursements – their first software actually handled inventory management. It was only when a client flagged up a discrepancy in his inventory, that they discovered stock had gone missing without a reimbursement from Amazon. That seller received a refund of over $1,000, and it was a big surprise to discover that errors of such magnitude could happen.
Doesn’t Amazon detect and correct its own mistakes?
A lot of the time Amazon does correct its own mistakes. Refunds Manager estimates that Amazon finds approximately 98% of FBA errors, and compensates sellers accordingly.
That leaves 2%. Not much, but if your volume of sales is significant, it can really add up. If your margins are tight too, the amount you are losing could even be the difference between making a profit and losing money.
There’s no reason for a seller to accept less than 100% of Amazon’s mistakes to be rectified. FBA is a service that you pay for. Mistakes happen, but it is absolutely fair to expect each and every one to be made good.
That’s the place of Refunds Manager – to move that 98% as close to 100% as possible and get reimbursements for overcharged fees, lost inventory and everything else.
What does Refunds Manager do? How does it work?
You can sign up for Refunds Manager on their website – it’s free to get started. Once you have an account, you enter your MWS IDs and authorization token, which allows Refunds Manager to download the reports that they need from Amazon.
You then need to set up a limited user on your Amazon seller account. This is a new user especially for Refunds Manager, that only gives them access to open support cases. They don’t need full access to your Seller Central account.
Once that has been set up, the system downloads all the necessary reports from Amazon, covering up to 18 months. It crunches all the numbers and generates a list of mistakes that Amazon has made, and not compensated you for already.
After the mistakes have been compiled by the software, they are passed on to a team who manually check that the claims are correct and then submit them to Amazon.
Once submitted to Seller Support, each claim is given a Case ID which sellers can monitor on the Refunds Manager interface to see when the reimbursement comes through. They can also track progress through Seller Central, by looking at their open support cases and account statement.
How much could I get back by using Refunds Manager?
Reimbursements vary a great deal, but generally the larger the seller account, the more you can get back. President of Refunds Manager, Justin Jacobs, told us:
We have smaller customers who got back a few thousand dollars, and very large sellers who have been with us from the beginning and got back over $100,000. It is medium to bigger sellers that really benefit from the service. If you’re doing less than $500,000 a year mistakes can be hard to find.
These are only examples, and there is no standard refund rate. Reimbursements vary greatly for different seller accounts and in different categories. The only way to really find out is to give it a try.
Won’t claiming all these refunds annoy Amazon?
It is understandable that sellers are cautious and don’t want to rock the boat, even when Amazon is in the wrong. Many sellers rely on the marketplace to make a living, and don’t want to take any risks.
There are a number of steps that Refunds Manager takes to make sure claims are completely in line with Amazon’s terms of service, submitted fairly, and won’t overwhelm support teams:
- If they find many claims to submit (which can happen when your account is first audited) they will be submitted in batches over several days rather than all at once.
- Cases are submitted manually by their claims team, rather than automated.
- They wait 45 days before submitting cases, to give Amazon time to act themselves.
Remember that Amazon FBA is a service that you pay for. If you found out you were being overcharged by your cellphone carrier, you wouldn’t ignore it, you would ask for it to be put right. It’s the same with Amazon. Sellers should have no fear about claiming refunds they are entitled to because Amazon made a mistake.
What does it cost?
There is no upfront cost. You only pay if Refunds Manager successfully recovers a reimbursement. When they do recover funds for you, they charge a 25% commission on the total amount received.
As mentioned above, they will wait for 45 days for Amazon to detect errors themselves, so they are not taking a fee on refunds that were coming your way anyway. If you sign up and they don’t manage to recover anything, there’s no cost, so you’ve lost nothing by trying.
This post was sponsored by Refunds Manager.