Amazon FBA sellers are growingly concerned about the “customer damaged returns” according to a recent Wall Street Journal report, dated October 26, 2023. Understanding how customer damaged FBA returns work is vital for protecting profits and mitigating losses. 

 

What are FBA Customer Damaged Returns?

Customer damaged return, in the simplest terms, is an Amazon-assigned condition for returned items considered unusable due to post-purchase customer actions. However, the lack of transparency and clear guidelines leaves sellers in a gray area, often grappling with inconsistent interpretations and unforeseen financial burdens.

1. The Scope of Customer Damaged: Scratches, dents, missing parts, even opened packaging—what constitutes “customer damage” remains largely subjective. While Amazon provides broad guidelines, the final call rests with their internal assessment, leaving sellers vulnerable to inconsistent interpretations and potential disputes.
2. Financial Repercussions: Sellers often encounter denials of reimbursement for such returns, confronting the dual challenge of lost inventory and irreparable merchandise. This situation can significantly affect profit margins, particularly for items of considerable value or fragility.
3. The Challenge of Proof: Proving a customer’s involvement in damage is challenging. Photos and detailed inventory logs can offer support, but ultimately, the burden of proof falls on the seller. This often leaves them at the mercy of Amazon’s judgment, further highlighting the need for clearer criteria and a more seller-friendly appeals process.

Types of Amazon FBA Returns

Sellable Returns

Products labeled as “sellable” upon return will be promptly reinstated into your active inventory. Unless you have concerns about the item’s sellable condition, no further action is required once it’s returned to Amazon. However, if you doubt that a returned item isn’t in sellable condition, you can claim a removal order.

Damaged Returns

There are several reasons why an item might be returned due to damage. It is possible that the item was damaged in an FBA warehouse before shipment or during transit, for which Amazon is responsible unless the item was not adequately wrapped with bubble wrap for protection. If the damage is due to the Amazon seller’s fault, then no reimbursements are provided by Amazon.

Customer Damaged Returns

Items classified as ‘customer damaged’ will not be returned to Amazon sellers’ inventory. It is important to note that ‘customer damaged’ does not necessarily imply that the item was damaged after the customer received it. Instead, it indicates that the customer opened the package and found the item damaged. 

The best course of action for such items is to initiate a removal order and have them returned to you. Subsequently, you can assess whether the item is suitable for resale in new, like-new, or very good condition.

Carrier Damaged Returns

If the item was damaged during transit, the shipping company is responsible for the situation. These returns are eligible for reimbursement since it wasn’t the Amazon seller’s fault. In such cases, do not initiate a removal order. Amazon will not reimburse for such items if the request is made to return them to you.

Defective Returns

Defective returns mean that an item was returned to Amazon marked as ‘defective,’ indicating either visible damage or the customer reporting a fault. In such cases, the FBA customer receives a refund, but the item remains labeled as ‘unsellable’ in the Amazon seller’s inventory upon return. 

The best course of action is to initiate a removal order and request that the item be returned to you for assessment.

What can FBA sellers do?

• Proactive Packaging: Investing in sturdy packaging and clear handling instructions can help minimize potential damage during transit.
• Detailed Product Listings: Transparent descriptions highlighting potential fragility and offering proper care instructions can discourage mishandling by customers.
• Thorough Inventory Checks: Meticulously documenting the condition of inbound and outbound merchandise through photos and detailed logs can strengthen your case in case of disputes.
• Stay Informed: Staying updated on Amazon’s policies and guidelines is crucial. Proactive engagement with seller forums and communities can offer valuable insights and support.

Challenges of FBA Customer Damaged Returns

Amazon processes millions of orders every day. However, for Amazon FBA sellers “customer damaged returns” pose a great challenge, as there are many ambiguities. 

Understanding the Amazon Reimbursement Policy:

Amazon defines “customer damaged” as any item returned in an unusable condition due to actions taken after purchase. This can encompass scratches, dents, missing parts, improper assembly, or even opened packaging. 

Amazon FBA Reimbursement policy

Financial Repercussions:

Amazon frequently denies reimbursements for returns labeled as ‘customer damaged,’ placing Amazon sellers in a challenging situation with lost inventory and unsalvageable merchandise.

Tips for Proactive Protection Against Customer Damaged Returns:

1. Packaging Perfection: Invest in sturdy, well-padded packaging tailored to your product’s needs. Include clear handling instructions and “fragile” labels when necessary.
2. Transparency is Key: Provide detailed product descriptions and high-quality images highlighting potential fragility and offering clear care instructions. This can deter mishandling by customers.
3. Inventory Documentation: Carefully document the condition of your inventory with photos and detailed logs, both before and after fulfillment. This strengthens your case in cases of dispute.
4. Stay Informed and Connected: Regularly review Amazon’s changing policies and guidelines, especially concerning “customer damaged” returns. 
5. Appeal Effectively: If faced with a “customer damaged” claim, gather all supporting documentation and submit a clear, concise appeal outlining the reasons you believe the damage is not your responsibility.

Bonus Tip: Consider Amazon FBA’s “Condition Guarantee” program for certain product categories. This program offers financial protection against customer-damaged returns, but carefully reviews its terms and limitations before opting in.