How Amazon Reimburses Lost Inventory Now: Manufacturing Cost, Not Sale Price

The valuation rule, stated precisely

Amazon's FBA inventory reimbursement policy splits losses into two buckets, and each one is valued differently. A pre-order loss — a unit lost, damaged, or destroyed inside Amazon's network before any customer bought it — reimburses at your sourcing cost: the documented amount you paid to acquire the unit, excluding freight and duties. A post-order loss — most commonly a customer return that vanishes before it's checked back in — reimburses at the refund amount minus the fees that applied to that sale, which lands much closer to what most sellers picture when they hear “reimbursement.”

The distinction matters because most of the internet still describes reimbursement as a single number, and it was closer to true before 31 March 2025, when sale price was the basis for both. It isn't anymore. If you're forecasting recovery based on retail price across your whole loss ledger, you're overestimating the pre-order half of it by a wide margin.

Why Amazon made this change

The stated logic, consistent with how the policy is written, is that reimbursement is meant to make you whole for what you actually lost — the cost of the unit — not to hand you the margin you would have earned by selling it. Paying sale price on inventory that never reached a customer effectively reimbursed the profit on a sale that never happened, which is a materially different thing than replacing lost stock. Whatever the reasoning, the effect for sellers is concrete: pre-order reimbursements pay less per unit than they used to, and the gap is exactly the margin you'd have made.

The worked example: same loss, two eras, two numbers

Take a unit that costs $9.40 to source and sells for $32.99. Lost inside a fulfillment center before any customer order touches it, in the pre-2025 era that unit reimbursed near $32.99. Under the current rule, effective 31 March 2025, the same loss reimburses at $9.40 — the documented sourcing cost — a payout 71.5% smaller for the exact same physical loss. Multiply that gap across a catalog with real loss volume and it's the difference between a reimbursement line that materially offsets shrinkage and one that barely registers, and it's why “how much does Amazon reimburse” no longer has one honest answer without first asking when the unit was lost and what documentation exists for its cost.

Now compare a customer return that's refunded and never comes back — a post-order loss on the same $32.99 item. That claim reimburses closer to the $32.99 refund, minus the fees Amazon would have charged on the sale. Two losses on the identical SKU, valued on completely different bases, purely because of when in the order lifecycle the unit went missing.

What counts as documentation, and what doesn't

Amazon wants a record that ties your claimed cost to the specific unit or ASIN — typically a manufacturer or wholesaler invoice showing per-unit cost. If you submit nothing, Amazon substitutes its own cost estimate for the category, which in our experience tends to land below what most sellers would have documented themselves. Submissions can be declined outright for what the policy describes as outlier values, or documents that are “forged, tampered with, or illegible.” A blurry phone photo of an invoice, or a spreadsheet total that doesn't map cleanly to the unit in question, is a common and avoidable reason a claim underpays.

The practical habit this creates: keep sourcing invoices organized and mapped to SKU before you ever need them for a claim, not after. Reconstructing supplier cost documentation retroactively, under a claim deadline, is slower and less convincing than having it on file already. Landed cost is a second common gap — an invoice that only shows the unit price without freight, tariffs, or a per-unit cost allocation for a multi-SKU shipment is harder for Amazon to accept at face value than one that already shows a clean, ASIN-mapped number.

What to do when the reimbursement lands lower than expected

First, check which bucket the loss fell into — pre-order or post-order — because that alone explains most of the gap between what a seller expects and what actually pays out. If it's a pre-order loss and you submitted no documentation, the fix going forward is supplying your own invoice on the next claim rather than accepting Amazon's category estimate by default. If you did submit documentation and the payout still looks wrong, request the specific valuation basis Amazon applied before resubmitting — a second claim with the same paperwork gap won't produce a different number. And remember the $5,000 single-unit cap applies regardless of which basis is used, so a high-cost item can be underpaid relative to its true cost even with perfect documentation.

If the payout genuinely used your submitted invoice and still looks low, check the invoice itself for freight and duty line items bundled into the per-unit price — Amazon's sourcing-cost definition excludes shipping and duties, so a landed-cost figure that includes them will be trimmed down during review even when the invoice is entirely legitimate. That trim isn't a denial or an error on Amazon's part; it's the policy being applied correctly to a document that mixed two different cost concepts together. Splitting freight and duty onto their own invoice line, separate from unit cost, before you ever need to file, removes this as a source of dispute entirely.

The number worth tracking is net, and cost-basis-aware

Across the accounts we manage, the shift to sourcing-cost valuation shows up as a lower average per-unit reimbursement on pre-order losses specifically, even as claim volume holds steady — which is exactly what the policy change predicts and a reason to stop budgeting recovery against retail price. $803,457 has come back net across 53 seller accounts and 42,096 line items since 10 February 2026, after $170,047 in reversals were subtracted from $973,504 gross, and that net framing matters here too: a reversed reimbursement doesn't distinguish between sale-price and cost-basis claims, it just comes back out. Full Circle has managed more than $500M in Amazon spend across 100+ brands, and Dr. Shield builds sourcing-cost documentation into every pre-order claim it files, priced on the call as a contingency against what's actually recovered — because a claim filed against the wrong valuation basis is a claim that pays less than it should, not one that gets denied outright.