Amazon is making significant changes to its Amazon FBA reimbursement policy change 2025, transitioning to a “manufacturing cost-based reimbursement model.”

In previous years, Amazon calculated reimbursements based on the historical sales price of a product, which meant that sellers were compensated for lost or Amazon FBA damaged inventory based on what they were actually selling the product for. 

However, with the new policy update, Amazon will now determine reimbursement amounts using the cost of goods sold (COGS) rather than the seller’s average sale price. This shift is expected to have a substantial impact on the way reimbursements are processed, particularly affecting sellers who operate with high-margin products. 

Amazon Shifts to Manufacturing Cost-Based Reimbursements

Since the compensation will now be based on manufacturing cost estimates rather than retail price, many sellers may receive significantly lower reimbursements than they previously did. 

For many third-party Amazon sellers, especially those in private label manufacturing or wholesale, this policy change poses new challenges. Those who source products at a low cost and sell them at a premium will be hit the hardest, as their reimbursements will now reflect only the base cost of production, rather than the higher retail value they were previously compensated for. 

Amazon’s decision to standardise reimbursement calculations aims to create a more uniform approach to reimbursements, but for sellers, this will result in lower payouts for lost and Amazon damaged goods return policy. 

This shift will require sellers to become more proactive in tracking inventory losses, submitting reimbursement claims, and ensuring that their costs are properly documented to avoid financial losses. 

What This Means for Sellers 

The transition to manufacturing cost-based reimbursements will bring several key changes for Amazon sellers. 

The most immediate impact is the expected reduction in reimbursement amounts, particularly for businesses selling high-margin products. Under the previous system, when inventory was lost or damaged, sellers were reimbursed based on the historical sales price, which often included profit margins. 

The new policy will only compensate sellers for their estimated cost of goods, meaning that many businesses will receive lower reimbursement payments than before. 

This change will also increase financial risks for sellers who rely on high-margin products to drive products. Businesses that built their pricing strategies around Amazon’s historical sales price reimbursement model may need to adjust their approach to protect their bottom line. 

Another major concern is the accuracy of Amazon’s cost estimates. Since Amazon is implementing a standardized system for determining manufacturing costs, there is a possibility that their estimates may not always align with the actual cost sellers pay for their inventory, meaning sellers may need to provide documentation, such as invoices or supplier agreements, to dispute incorrect reimbursement amounts. 

Impact on Small and Large Sellers 

The policy shift will impact both small and large sellers, but the extent of the impact will depend on their business model. 

Small businesses and private-label sellers will face the biggest challenges, as their revenue models often rely on high profit margins per unit sold. These sellers will experience the most significant reductions in reimbursement amounts, which could result in financial strain for those who rely heavily on Amazon reimbursement service process to recover lost revenue. 

Wholesale sellers, who purchase products in bulk at a lower cost, may experience a slightly lesser impact because their costs are already aligned with bulk pricing strategies. 

However, they still need to be vigilant in ensuring that Amazon’s estimated costs match their actual supplier costs, as incorrect cost calculations could lead to underpayment of reimbursements. 

Larger brands and manufacturers selling directly on Amazon may find it easier to adapt to the changes, as their cost structures are already based on manufacturing cost estimates  rather than historical retail prices. 

How To Mitigate New Changes 

With the introduction of manufacturing cost-based reimbursements, sellers need to take proactive steps to minimize financial losses.

The first and most important measure is to maintain records of their manufacturing costs, including supplier invoices, purchase orders, and production agreements. 

By keeping thorough records, sellers will be better prepared to challenge incorrect reimbursement calculations if Amazon underestimates their product costs. 

Another key strategy is to monitor reimbursement claims closely. Sellers should not assume that Amazon’s automated system will always process reimbursements correctly. 

Instead, they should regularly audit their reimbursement reports to ensure they are receiving the correct compensation for lost or damaged inventory. 

If discrepancies are found, sellers need to be ready to file manual claims with supporting evidence to challenge Amazon’s reimbursement amounts. 

Sellers should also explore ways to optimize inventory management to reduce the risk of inventory losses, including ensuring that shipments to Amazon warehouses are properly labeled and tracked, as misplaced inventory can often go unnoticed. 

Additionally, sellers may need to adjust their pricing strategies to account for the potential reduction in reimbursement amounts, especially for high-margin products that are now at risk of receiving lower compensation in the event of a loss.  

Reduction in Reimbursement Amounts

One of the most concerning aspects of the Amazon FBA reimbursement policy change is the expected reduction in reimbursement amounts for lost and damaged inventory. 

Since Amazon is shifting to standardised reimbursements based on manufacturing costs, many sellers will receive far less compensation than before. 

This means that high-value products that previously received reimbursement close to retail price will now only be reimbursed at a fraction of that amount. 

This change places a greater financial burden on sellers, particularly those with products that require high production costs or have long lead times. 

Sellers must now double-check Amazon’s cost assessments and ensure that their documented COGS matches the actual product costs to avoid underpayment on claims.

Amazon Reimbursement Automation

Amazon is also enhancing reimbursement automation in the process, making certain claims automatically processed without requiring manual intervention. 

While this streamlines some reimbursement cases, it also comes with challenges, as sellers have flexibility to dispute automated reimbursement calculations. Amazon’s automated system will apply fixed cost values to lost inventory, which may not always be accurate or reflect the true cost sellers incur. 

For this reason, sellers need to be extremely diligent in monitoring their reimbursement reports, ensuring that they file manual claims when necessary to contest inaccurate cost assessments. 

Automated Lost Inventory Reimbursement 

Amazon’s automated Amazon FBA lost inventory reimbursement system has been designed to streamline the reimbursement process for sellers, reducing the manual effort required to file claims. 

Under this system, Amazon automatically detects inventory discrepancies and issues reimbursement payments based on predefined eligibility criteria. 

This automation is aimed at improving efficiency, minimizing delays, and ensuring sellers receive compensation without needing to manually track every lost item. 

However, with the 2025 Amazon Reimbursement Policy Changes, automated lost FBA inventory reimbursement will now be calculated based on the cost of goods sold (COGS) rather than the historical sales price, meaning that sellers who previously received higher reimbursements based on their average selling price may now receive lower compensation amounts due to Amazon’s new standardised cost-based model. 

Sellers will need to carefully monitor their reimbursements to ensure they are receiving the correct amount for lost inventory. 

Benefits

One of the biggest advantages of Amazon’s automated lost inventory reimbursement system is the faster processing of claims. 

Since lost inventory is detected automatically, eligible reimbursements are processed without sellers needing to file a manual claim. This reduces the workload for sellers who previously had to track their inventory losses and manually submit cases to Amazon. 

Automated reimbursements also provide greater transparency, as Amazon regularly updates sellers through detailed reimbursement reports in Seller Central, ensuring that sellers can see which inventory losses have been accounted for. 

Another key benefit is the reduction of administrative effort. Manual reimbursement requests require sellers to collect evidence, submit claims, and follow up with Amazon support, which can be time-consuming. 

Automation eliminates much of this burden by automatically identifying eligible losses and reimbursement sellers based on Amazon’s internal assessments. 

Limitations

While Amazon’s automated reimbursement system provides greater efficiency, it also comes with several limitations. One of the primary concerns is that automated reimbursements are now based on Amazon’s cost estimates rather than actual product sales data, meaning that sellers may receive lower reimbursements than expected, particularly for high-margin products where the cost of goods sold is significantly lower than the retail price. 

Another limitation is the inflexibility of automated decisions. Since reimbursements are calculated based on predefined formulas, sellers have less control over the reimbursement process and limited ability to challenge the payout amounts. 

If Amazon miscalculates the cost of a lost item, sellers must manually dispute the claim, which can be difficult given Amazon’s strict policies on cost verification. 

The system also does not account for exceptions or unique inventory situations. For instance, if a seller’s product is custom-made or has a fluctuating production cost, Amazon’s standardised cost assessment may not reflect the true value of the item.

Automatic vs. Manual Handling

The shift to automated reimbursement processing raises the question of whether sellers should rely solely on Amazon’s automated system or continue manually tracking their reimbursement claims. 

While automation makes claim processing more efficient, it does not necessarily ensure accuracy. There is a risk that sellers regularly audit their lost inventory reports. 

Manual handling allows sellers to challenge incorrect cost assessments, file disputes, and recover additional reimbursements. 

However, this requires significant effort and time investment, as sellers need to track every inventory movement, compare it with Amazon’s reports, and submit cases manually when necessary. 

A balanced approach is combining automation with manual oversight. 

Sellers should allow Amazon’s system to process standard lost inventory claims but also conduct regular audits to identify underpayments and file manual disputes when necessary. Using Amazon third-party delivery service can also help automate the tracking and filing of additional claims, maximizing the recovery of lost funds. 

Multi-Channel Fulfillment (MCF) Reimbursement Caps

Amazon’s Multi-Channel Fulfillment (MCF) program allows sellers to store inventory in Amazon fulfillment centers while fulfilling orders for other sales channels, such as Shopify, Walmart Marketplace, or eBay. 

However, with the 2025 reimbursement policy updates, Amazon is introducing reimbursement caps for MCF-related inventory losses, meaning sellers may receive less compensation for MCF inventory compared to standard Amazon FBA orders. 

Previously, MCF sellers were eligible for reimbursements similar to FBA lost inventory claims. However, Amazon now plans to limit reimbursement amounts for MCF inventory losses, stating that third-party fulfillment orders pose a different level of risk compared to FBA orders. 

This means that if inventory stored for MCF purposes goes missing or is damaged in Amazon’s warehouse, sellers may receive only a fraction of their product’s cost back in reimbursement. 

Impact on Sellers 

The Amazon new reimbursement policy on MCF inventory will particularly affect multi-channel sellers who rely on Amazon’s fulfillment network for non-Amazon orders.

Since MCF allows sellers to centralize inventory management, many businesses use it to streamline logistics, reduce fulfillment costs, and optimize storage efficiency. However, with lower reimbursement amounts, these sellers may need to reconsider their inventory distribution strategies. 

For some sellers, shifting some inventory to third-party fulfillment centers may become necessary to mitigate financial risks. Businesses that heavily depend on MCF for order fulfillment may also need to reevaluate their pricing models to compensate for the potential loss of reimbursement funds. 

How to Get Prepared for Amazon Reimbursement Policy 2025 Changes

The most critical action in Amazon reimbursement policy change is to maintain detailed cost documentation. Ensuring that all invoices, supplier agreements, and cost breakdowns are properly recorded will help sellers dispute incorrect reimbursement calculations and challenge underpayments. 

Another key preparation strategy is to closely monitor reimbursement reports. Sellers should conduct regular audits to verify that they are receiving accurate reimbursements for lost and damaged inventory. If discrepancies arise, they must file disputes promptly and provide supporting evidence. 

Sellers should also diversify their fulfillment strategies. With MCF reimbursement caps in place, it may be beneficial to split inventory between Amazon warehouses and third-party logistics providers (3PLs) to reduce dependence on Amazon’s fulfillment network. 

Additionally, sellers should work with experienced reimbursement services to maximize claim recovery. Automated reimbursement tracking tools can help sellers detect missed reimbursement, challenge incorrect claims, and ensure full compensation under the new policies. 

How Can RefundGet Help You Maximize Your Profits?

Refundget offers automated reimbursement auditing services, helping sellers recover lost revenue efficiently by identifying underpaid claims, incorrect cost assessments, and missing reimbursements. 

With Refundget’s advanced tracking system, sellers can detect reimbursement discrepancies, file disputes when necessary, and ensure they receive maximum compensation for inventory losses. 

Refundget helps sellers navigate Amazon’s new cost-based reimbursement structure, ensuring they do not lose money due to incorrect cost estimates or automation errors. 

By using Refundget’s expertise, sellers can reduce financial losses, optimize reimbursement claims, and focus on scaling their business instead of manually tracking every inventory issue. 

With Amazon’s new policies placing stricter limits on reimbursements, having an automated and data-driven approach to claims is more important than ever. 

For sellers looking to protect their profits in 2025, using Refundget is the most effective way to ensure every lost or damaged inventory unit is fully reimbursed.