Amazon's 2025 Reimbursement Policy Change, Explained (and What It's Quietly Costing You)

For most of FBA's history, when Amazon lost or damaged your inventory, it reimbursed you based on the sale price of the item — roughly what you would have earned had the unit sold. In March 2025, that changed. Under the updated FBA inventory reimbursement policy, items lost or damaged before a customer order are reimbursed at their manufacturing cost: what you paid to source the product, excluding shipping, duties, and handling.

On paper, that sounds like an accounting technicality. In practice, it was one of the largest quiet transfers of margin from sellers to Amazon in the program's history — because of who decides what your manufacturing cost is.

The part most sellers missed: Amazon estimates your cost for you

The policy gives you two options. You can provide your actual manufacturing cost per product, with documentation to back it up — or you can do nothing, in which case Amazon estimates your manufacturing cost using its own model, based on “comparable products” sold by Amazon, other sellers, and supplier data.

Amazon's estimate arrives as an automatic reimbursement. It looks official. It requires no action. And for a large share of products, it is meaningfully below the seller's real landed cost — industry analyses after the change reported payout reductions of up to 75% on affected claims. If your true cost for a product is £11 and Amazon's model guesses £4, you eat £7 of real money on every unit that goes missing — silently, forever, on every incident.

What the policy actually says

• Lost or damaged before a customer order(in the warehouse, inbound to the warehouse): reimbursed at manufacturing cost — yours if you provided it, Amazon's estimate if you didn't.
• Lost or damaged after a customer order (picking, packing, shipping, returns processing): still reimbursed based on the sale price of the original order, minus fees.
• Automatic reimbursement: Amazon now auto-processes many warehouse-loss claims without the seller filing anything. This sounds convenient, and it is — but it also means nobody on your side of the table checks the math unless you do.
• Claim windows: most manual claims for lost or damaged inventory must be filed within policy windows (generally up to 18 months for warehouse losses; much shorter for some claim types, like removals). Expired claims are gone permanently.

The three-step defense

1. Get your real costs on file

Your “manufacturing cost” is what you pay your supplier per unit. Amazon's definition excludes freight and duty, but your landed cost is still the number you should know per SKU — it's also the basis for disputing a low payout with supplier invoices as evidence. If you don't have costs in a spreadsheet today, start with your ten best sellers; they carry most of your exposure.

2. Audit every automatic reimbursement

Every reimbursement in your Payments → Reimbursementsreport has an amount-per-unit. Compare it against your actual cost. Anything below your documented cost is a dispute candidate — Amazon accepts cases where you provide sourcing documentation showing the estimate was low. Disputes have their own windows, so a payout that came in short in January is not something to look at “eventually.”

3. Reconcile losses against reimbursements — not vibes

Automatic reimbursement covers manylosses, not all of them. The only way to know whether a lost unit was ever paid is to reconcile your inventory ledger (every lost, damaged, found, and disposed unit) against your reimbursement report, line by line, respecting the 30-day waiting period Amazon gets to find misplaced items. That's spreadsheet work sellers used to do quarterly, badly — and it's exactly the kind of work software should do daily.

Why commission-based recovery services struggle here

The traditional recovery industry charges 20–25% of whatever it recovers, which worked when recovery meant filing big sale-price claims. Post-2025, much of the leak isn't an unfiled claim — it's an underpaid automatic payoutthat only your own cost data can expose. A service that never ingests your real costs can't see the largest new category of loss.

This is the exact problem Clawback was built for: it reconciles your inventory ledger, reimbursements, returns, and fees daily against your real unit costs, flags every underpayment and unfiled claim with its deadline, and writes the Seller Central case text for you — for a flat monthly fee, so every recovered pound stays yours. Run a free scan to see what your account shows.

FAQ

Does providing my costs to Amazon lock me in?

You can update your cost data. Providing documented costs is generally in your favor if your products are higher-cost than category averages — which is precisely when Amazon's estimate hurts you most.

Is this UK/EU too, or just the US?

The manufacturing-cost basis applies across Amazon's marketplaces, with regional policy pages describing the same structure. UK and EU sellers should audit payouts in their local currency exactly the same way.

What documentation counts for a dispute?

Supplier or manufacturer invoices tied to the product, showing the per-unit cost. Keep them organized by SKU — a dispute with an invoice attached is a very different conversation from one without.