Customer-Damaged FBA Returns Explained: Answers to the 10 Most Common Seller Questions

1. What does “customer damaged” mean in Amazon FBA?

In Amazon FBA, “customer damaged” refers to products returned by buyers that arrive in a condition unfit for resale. Amazon classifies these as unsellable inventory and marks them under the return reason “Customer Damaged.” You can view these items in the FBA Customer Returns Report within Seller Central.

While Amazon may not automatically issue a reimbursement, sellers can review whether the product was actually returned and, if not, file an Amazon reimbursement claim. Knowing what counts as customer damage helps you decide whether to request removal, relist after inspection, or appeal the decision if Amazon’s classification seems incorrect.

2. How to file a claim for customer-damaged FBA returns?

To file a claim, go to your Amazon Seller Central account and follow these exact steps:

• Open the Customer Returns Report: Navigate to: Reports → Fulfillment → Customer Returns. Then, filter by return reason: “Customer Damaged.” Identify orders where the buyer received a refund, but the item wasn’t returned or was returned in unusable condition.

• Confirm reimbursement eligibility: Amazon only reimburses if the item was not returned, returned in a different condition, or mishandled by Amazon staff. Check the Reimbursement Policy for customer-damaged fBA returns under the inventory reimbursement policy.

• Track claim status: Monitor claim updates under the Amazon reimbursement Claims dashboard in Seller Central. Approved claims appear in Reports → Payments → Transaction View → Reimbursements.

3. What counts as a customer-damaged FBA return?

A customer-damaged FBA return means the item failed Amazon’s inspection for “new” condition after being sent back by the buyer, making it unsellable and ineligible to be placed back in your active inventory.

Here’s what typically qualifies as customer-damaged in Amazon FBA:

• The product shows visible damage, stains, scratches, or broken parts

• Packaging is torn, missing, or heavily worn

• Accessories or manuals are missing

• Items appear used, tested, or altered by the buyer

• The returned item differs from the one shipped (e.g., swapped product)

Amazon moves these products into unsellable inventory and usually does not reimburse sellers unless the item was mishandled by Amazon.

4. What’s the difference between warehouse-damaged and customer-damaged FBA returns?

The key difference lies in who caused the damage and who is responsible for reimbursement under Amazon’s FBA returns policy.

5. How to check and audit customer-damaged FBA returns in reports?

To check and audit customer-damaged FBA returns, follow these exact steps inside your Amazon Seller Central account:

• Open the Customer Returns Report: Go to Reports → Fulfillment → Customer Returns. Set the Return Reason filter to “Customer Damaged.” This shows all FBA orders where the buyer returned items marked as damaged.

• Verify return and refund details: Match the Return ID, ASIN, and FNSKU with your Returns and Payments reports. Check if the customer actually returned the item and whether a refund was issued. If a refund was given but the item was never received, the seller may be eligible for reimbursement.

• Check inventory status: Navigate to Inventory → Manage FBA Inventory → Unfulfillable Inventory. Identify items labeled as “Customer Damaged.” These are unsellable and should be removed and disposed of by Amazon. 

• Cross-check using the Reimbursements Report: Go to Reports → Payments → Transaction View → Reimbursements. Confirm whether Amazon has reimbursed you for any customer-damaged or unreturned FBA items.

Sellers should audit these reports monthly to identify unclaimed or misclassified reimbursements. Our Amazon reimbursement tool, Refunzo, simplifies this process by automatically tracking customer-damaged FBA returns, cross-checking refund and inventory data, and highlighting cases where Amazon issued a refund but the item was never returned, helping sellers recover missed reimbursements quickly.

6. What should sellers do with unsellable customer-damaged FBA inventory?

When an item is marked as “unsellable”, Amazon does not reimburse the seller, since this damage is considered a seller’s business cost under the Amazon FBA returns policy. Sellers must act quickly to avoid ongoing FBA storage fees. Here are the available options:

• Create a removal order (Return to Address): Go to Manage FBA Inventory → Unfulfillable Inventory → Create Removal Order → Return-to Address. This allows the item to be sent back for inspection or repair. You can verify the condition, dispute incorrect classifications, repackage items that are only cosmetically damaged, or resell them on other platforms. 

• Dispose of the inventory: If the item is low-value or severely damaged, choose Dispose when creating the removal order. This clears warehouse space immediately but results in a complete loss of item value.

• Use Amazon’s value-recovery programs: Sell eligible items through third-party liquidation and recover around 5–10% of the average selling value. Amazon grades the product (e.g., Used – Like New) and relists it automatically. Minor packaging issues can be fixed by Amazon for a small fee, making the item sellable again. 

• Set up automated removals: Configure Automated Unfulfillable Settings to automatically return, dispose of, or liquidate unsellable inventory on a set schedule. This prevents the buildup of damaged stock and extra storage charges.

7. How to reduce losses from customer-damaged FBA returns?

To minimize losses from customer-damaged FBA returns, sellers need to combine prevention, monitoring, and recovery strategies. Here’s exactly what works:

• Use stronger packaging and clear labeling: Reinforce fragile or high-value items with better internal packaging and “Do Not Open” or “Sealed for Safety” labels. This reduces the chances of customers mishandling products and returning them damaged.

• Product listing optimization: Include clear images and clear product descriptions that help you get a higher rank. Misleading or incomplete listings often lead to unnecessary returns marked as “customer damaged.”

• Monitor return reports regularly: Check the Customer Returns Report and FBA Unfulfillable Inventory monthly to identify patterns in customer-damaged items. Identify repeat issues early, for example, if one SKU consistently returns damaged, update packaging or listing details.

• Automate reimbursement tracking: Our Amazon reimbursement software, Refunzo, automatically identifies customer-damaged FBA returns that were refunded but never received back by Amazon. It helps sellers recover missed reimbursements quickly, reducing financial loss without manual report checks.

8. How does Amazon’s reimbursement policy work in 2025?

Amazon’s FBA reimbursement policy (2025) aims to make reimbursements faster, more transparent, and data-driven, but sellers still need to understand what qualifies and what doesn’t. Here’s how it works in simple terms:

• Reimbursements based on manufacturing cost: Amazon now calculates reimbursements using your actual manufacturing cost, not retail or selling price. If you haven’t provided this data, Amazon uses an estimated value based on similar products. The calculation excludes shipping, customs, and handling expenses.

• Upload your own cost data for accurate claims: Sellers can submit their true manufacturing cost through the Inventory Defect and Reimbursement portal in Seller Central. Providing verified cost data helps ensure fair and higher reimbursements instead of Amazon’s default estimate.

• Automatic reimbursements for lost inventory: Amazon now proactively reimburses for inventory lost or damaged inside fulfillment centers, no manual claim needed. However, if the issue occurs after shipping or is outside Amazon’s control, a manual claim is still required.

• Customer-damaged items are excluded: If the damage was caused by the buyer, Amazon treats it as customer liability, not Amazon’s fault. Sellers can only claim reimbursement when Amazon or its carriers caused the damage or when a refunded item wasn’t returned.

• Recover missed reimbursements: Our Amazon reimbursement software, Refunzo, automatically audits your FBA reimbursement reports, detects unreturned or underpaid items, and helps you recover missed claims without manual effort.

9. Why am I not getting reimbursed for customer-damaged FBA items, and how much do these returns cost me?

Amazon usually does not reimburse sellers for customer-damaged FBA returns because such damage is considered part of the seller’s normal business risk. Under the Amazon FBA reimbursement policy 2025, reimbursement applies only when Amazon or its carriers caused the damage or when a customer received a refund but never returned the item.

• Why you’re not reimbursed: Amazon classifies customer-damaged items as the buyer’s fault, not Amazon’s. Since these products were in the customer’s possession, Amazon treats the loss as non-compensable unless the product was lost, not returned, or mishandled by Amazon’s team.

• What these returns cost you: You lose the product value, since customer-damaged inventory is marked unsellable. You also incur FBA storage fees if the inventory remains in Amazon’s fulfillment center. If not removed promptly, additional disposal or removal charges apply.

• How to recover part of the loss: our Amazon reimbursement automation software easily identifies missed reimbursements for customer-damaged FBA returns and other inventory issues. Refunzo automatically scans your FBA reports for unreturned items or misclassified returns that Amazon's system might miss. Refunzo ensures you recover every possible reimbursement without the hassle of manual checks.

10. Can I appeal or dispute a customer-damaged FBA return classification if I believe it’s incorrect?

Yes, you can appeal or dispute a customer-damaged FBA return if you believe Amazon classified it incorrectly. Start by collecting proof of order details, photos, and return or reimbursement reports showing that the item wasn’t damaged by the customer. 

In Seller Central, go to Help → Get Support → Fulfillment by Amazon → Investigate other FBA issues → Customer-damaged returns, and submit an appeal with a short explanation and your evidence. Appeals should be filed within 60–120 days of the refund or replacement date.