Amazon FBA reimbursement policy: what you actually get back when inventory goes missing

Say a pallet of trekking pole sets goes missing inside a fulfillment center. Each set sells for $79. Each one cost you $18 to make. Under the current Amazon FBA reimbursement policy, the number that matters for that lost unit is the $18, and if you never told Amazon what your cost was, the number that gets used is Amazon's guess. For a brand doing $20K a month with thin cash, that gap shows up in the bank account.

Timeline: Amazon announced manufacturing-cost reimbursement in December 2024, and it took effect March 31, 2025. Amazon's own prep and labeling services ended January 1, 2026. Current as of October 2026.

Three changes rewrote how FBA reimbursement works over the last two years: payouts moved to manufacturing cost, most warehouse claims became automatic with short filing windows, and Amazon stopped prepping and labeling inventory for sellers. Here's what each one means for your cash, in plain terms.

How the Amazon FBA reimbursement policy calculates a payout

Amazon announced the shift in December 2024 and it took effect on March 31, 2025 (pushed back from the original March 10 date). For FBA items that are lost or damaged before a customer order, Amazon reimburses based on the product's manufacturing cost.

Amazon's definition is narrower than most sellers assume. "Manufacturing cost" means your cost to source the product from a manufacturer, wholesaler or reseller, or your cost to produce it if you make it yourself. It excludes shipping, handling, customs duties and other costs. So this is not your landed cost. The freight, the tariff and the prep labor you paid to get that unit into a fulfillment center are not part of the payout.

Items that are lost or damaged after a customer order work differently. For those, Amazon says it continues to reimburse the sales price on the original order minus applicable fees.

So there are two very different valuations for the same unit, depending on when it disappeared:

• Lost in the warehouse before anyone bought it: manufacturing cost.

• Lost or damaged after an order (in a return, for example): sale price minus fees.

If you've been modeling inventory risk with the old assumption baked in, your reserve for shrink is probably too optimistic.

Amazon's cost estimate vs. uploading your own costs

You get two options for how Amazon determines manufacturing cost:

1. Let Amazon estimate it. Amazon says its estimate comes from "a comprehensive evaluation of comparable products sold by Amazon, by other sellers, and through wholesale channels." If you don't provide a cost, the estimate applies automatically.

2. Provide your own costs. You can enter your actual manufacturing cost per product, and you can change it later.

The estimate is built from comparable products. "Comparable" is doing a lot of work there. A hand-forged kitchen knife and a mass-produced one can look comparable to a model and cost very different amounts to make. Supplements with clinical-dose ingredients, technical apparel with premium fabric, small-batch pet food: these are exactly the products where a category-level estimate is most likely to miss your real number. You won't know how close it lands until you compare.

The fix is simple to describe and tedious to do. Upload your real costs.

Where the cost management page lives

Costs are managed on the Manage Your Sourcing Cost page inside the Inventory Defect and Reimbursement portal. (The December 2024 announcement called it "Manage Your Manufacturing Cost." Same page.) Amazon said every seller would have access by February 28, 2025.

To get there: from Seller Central, open the Inventory menu and select Inventory Defect and Reimbursement, then find the sourcing cost page inside the portal. Our Seller Central guide covers the menus.

Amazon lost inventory reimbursement: what's automatic and what isn't

The Inventory Defect and Reimbursement (IDR) portal launched in January 2025. It pulls warehouse lost, warehouse damaged and customer return defects into one view, with the defect type, creation date, actions taken, reasons and current status. You can also reach it through the Reimbursements report.

What the portal does not include matters just as much. Amazon says it doesn't cover defects under missing from inbound, removals or warehouse disposals. Those still need their own tracking.

Since November 1, 2024, Amazon proactively reimburses items lost in its fulfillment centers as soon as the fulfillment center reports them lost. Amazon also said "almost all" warehouse lost and damaged and customer return cases would be reimbursed proactively. Almost all is not all. If an automatic reimbursement never shows up, you still have to file a manual claim, and all removal claims are still manual.

FBA claim eligibility windows

Manual claims now run on short clocks, in effect since October 23, 2024:

• Lost or damaged in a fulfillment center: no later than 60 days after the item was reported lost or damaged.

• FBA customer returns: between 60 and 120 days after the customer refund or replacement date. Not before day 60.

• Removal lost in transit: between 15 and 75 days from the shipment creation date. Not before day 15.

• All other removal claims: within 60 days of the shipment being delivered back to you.

Sixty days goes by quickly when you only open the Reimbursements report at quarter end. A monthly reconciliation is the minimum that fits inside these windows. (We cover the mechanics of filing in a separate piece, so this one stays on the policy.)

Amazon FBA prep requirements and reimbursement after January 1, 2026

This is the change most likely to cost you money without you noticing.

Starting January 1, 2026, Amazon stopped offering prep and item labeling services for FBA shipments in the US marketplace. That covers inventory sent straight into FBA and inventory that flows into FBA from Amazon Warehousing and Distribution (AWD), Amazon Global Logistics, Amazon SEND and Supply Chain Portal. Shipments created before January 1 kept the service even if they arrived after that date.

The reimbursement consequence is the part to underline. Amazon's wording: shipments created after January 1 that arrive without proper prep and item labeling won't be eligible for reimbursement if damaged or untraceable. An Amazon staff reply on the Seller Forums spells out the logic: products without proper prep might get damaged in handling, products with missing or defective labels could be untraceable, and those products aren't eligible for reimbursement. The same reply says Amazon will flag a missing or improper prep or label as a defect and apply the prep or label itself. Expect an inbound defect fee when that happens, and check the current per-unit rate on Amazon's FBA fee pages before you budget around it.

Put the two policies together. A unit that arrives unlabeled and then goes missing is worth zero to you. Not manufacturing cost. Zero.

If you use a third-party prep center, Amazon's position is that the contract and any dispute sit between you and that provider. Amazon's reimbursement won't cover a 3PL's labeling mistake, so your agreement with them should.

What to do now

None of this takes a new tool. It takes an afternoon and a calendar reminder.

1. Upload real manufacturing costs for every active FBA SKU. Use what you paid your factory or supplier per unit, per Amazon's definition. Don't pad it with freight or duties; Amazon's definition excludes them, and a number you can't back up with an invoice is a liability. Update it when your supplier pricing changes.

2. Check the SKUs where Amazon's estimate is still live. Anything you didn't upload is running on the estimate. Start with your highest-cost and highest-volume units.

3. Audit your prep before the next shipment is created. Confirm every unit has a scannable FNSKU label (or qualifies to ship without one) and meets the packaging and prep rules for its product type. Amazon's own FBA prep and labeling guide is the starting point.

4. Reconcile shipments every month. Compare units shipped against units received, scan the IDR portal for new defects, and check the Reimbursements report for anything that should have been paid automatically and wasn't. Put the 60-day windows on a calendar.

5. Track what the IDR portal doesn't. Inbound shortages, removals and disposals live outside it.

Reimbursements were never a profit center. They're the floor under your inventory risk, and that floor has dropped. If you want the bigger picture on what FBA costs you beyond the fee table, read whether FBA fees are worth it.