Selling on Amazon via FBA simplifies fulfillment, but dealing with reimbursements for lost, damaged, or otherwise misplaced inventory requires mastery of changing policies. In 2025, Amazon’s reimbursement policy shifts to calculate claims based on manufacturing cost—a potentially significant impact on seller profits. Additionally, claim timelines have tightened, and notifications come faster. At Coastal Distribution Group, we understand these changes deeply and guide sellers every step of the way, ensuring you reclaim what you’re owed and safeguard your margins.

1. Reimbursement Policies Before 2025

1.1. Traditional Process

Historically, Amazon reimbursed sellers based on retail price for items lost or damaged prior to customer delivery. Sellers had generous claim windows—often up to 180 days to submit Reimbursement Requests via case logs.

1.2. Shift Toward Automation (Late 2024)

Beginning November 2024, Amazon moved toward automated reimbursements based on system-detected inventory issues (e.g. lost in fulfillment centers), closing many manual claim cases.

1.3. Procedure Summary (Pre-2025)

• Retail-price reimbursements
• Long claim filing windows (120–180 days)
• Seller had to capture evidence (photos, timestamps) for claims
• Late claims and incomplete records often rejected

2. 2025 Reimbursement Policy Updates

2.1. Manufacturing-Cost-Based Reimbursement (Effective March 31, 2025)

Amazon now reimburses using either:

• A seller-submitted manufacturing or landed cost, or
• An auto-estimate based on similar SKUs (if none provided)
  This excludes retail markup, significantly reducing reimbursement amounts.

2.2. Extended Preparation Period

Amazon initially set the effective date for March 10, 2025, but extended it to March 31, 2025, allowing sellers to submit their costs via a dedicated portal by February.

2.3. New Filing Timeline

• Lost/damaged inventory: 60 days to file
• Return-related reimbursements: 60–120 days
• Removal-related claims: 15–75 days
  Sellers must act swiftly to dispute or file.

2.4. Refund Calculation Shift

Reimbursement equals manufacturing cost—not retail price. Example: $50 retail item with a $15 manufacturing cost → only $15 reimbursed.
Providers like Seller Labs and Titan Network warn of sharp margin loss.
Sources: sellerlabs.com, titanetwork.com

2.5. Additional Notes

• Excludes shipping, labeling, customs, and IP
• Automated if cost submitted; otherwise uses system estimate
• Missing item reports may require extra dispute evidence

3. 2024→2025 Timeline Overview

4. Business Impact & Strategic Risks

4.1. Margin Erosion

Lower payouts directly shrink profit per unit—especially for high-return categories like electronics.

4.2. Catalog-wide Exposure

High-return or loss-heavy catalogs (books, apparel, home goods) face amplified profit leaks.

4.3. Filing Overwhelm

Tight deadlines and required documentation pressure sellers—especially high volume or multi-SKU accounts.

4.4. Proactive Compliance

Keeping manufacturing costs accurate and updated is now mission-critical, not optional.

4.5. Opportunity Cost

Without a system, manual tracking risks losing valid reimbursements entirely.

5. How Coastal Distribution Group Supports You

5.1 Personalized Claim Assistance & Cost Management

• Upload and verify manufacturing costs for each SKU before March 31
• Train you on dispute procedures for business and automated dashboards

5.2 Real-Time Claims Dashboard

Coastal’s platform tracks all cases, claim statuses, and upcoming deadlines for quick action.

5.3 Audit and Review Service

Monthly audit of Amazon statement vs expected reimbursement—identify missed claims or partial payouts.

5.4 Hybrid Fulfillment Strategy

Prioritize low-cost inventory handling via Coastal warehouses and prep services to reduce FBA footprint, limiting exposure to Amazon’s cost policy.

5.5 Proactive Reimbursement Workflow

Coastal monitors incoming reimbursements daily, flags discrepancies swiftly, and files disputes reliably.

5.6 Risk Mitigation

• Early notification for aging SKUs
• Structured liquidation or removal to avoid LTS fees
• Consolidated claims for bulk lost/damaged items

5.7 Case Study: Apparel Brand Example

A client selling seasonal clothing saw a 40% drop in reimbursement revenue due to the new policy. Coastal’s intervention resulted in 75% of valid claims successfully submitted—with accurate cost valuation—resulting in a recovery of $5,000 in reimbursements over 60 days.

6. Tools, Training, and Seller Reminders

• Required tools: Reimbursement case files, Amazon docs, cost sheets
• Training sessions: Always include “Manufacturing Cost Submission” prep in Q1
• Reminders: Automated alert emails 7 days before eligibility expiration
• Best Practices: Include cost during listing creation; set alert on pending claims

Conclusion

The Amazon FBA reimbursement policy changes of 2025 represent a major shift—moving from retail-price-based reimbursement to manufacturing-cost-based calculations. Coupled with shortened filing windows, this puts margin pressure on unprepared sellers. However, with proactive planning and expert support, these challenges become manageable. Coastal Distribution Group offers the infrastructure, training, and operational support to navigate reimbursements effectively, helping your business recover lost revenue, meet deadlines, and streamline Amazon operations.