Amazon will begin enrolling professional sellers into the Prepaid Return Label program on June 15, 2020.
The Prepaid Return Label program will issue prepaid return shipping labels for qualifying returns. Sellers are charged for return shipping.
Many sellers are already participating in this program. Sellers can also self-enroll in the Prepaid Return Label program in the Manage Seller Fulfilled Returns tool.
Sellers who are not part of the program should see a message in their Manage Returns page that reads “Get access to faster returns by taking advantage of the Prepaid Returns Label program.” Click on it to enroll in the program.
What does that mean for sellers?
Amazon will automatically authorize all returns that fall into its returns policy, and Amazon will provide customers with prepaid return shipping labels through the Buy Shipping Services. Seller accounts are charged for the return shipping cost when the label is scanned by the carrier.
As of this time, sellers don’t have the option to specify a carrier or issue their own prepaid labels.
Customer return requests that fall outside of Amazon’s return policies or that are usually exempt from returns are sent to sellers for review.
All returns, including automatically-authorized returns, can still be tracked via the Manage Returns page.
What do sellers need to do to enroll?
Before Professional sellers can enroll in the Prepaid Return Label program, they’ll need to verify and confirm a few settings on their accounts.
Set up or verify that the default return address on the account is correct. Amazon requires a US domestic address for returns
Make sure return addresses are set if there are multiple marketplaces
Ensure that the weight and size information for products are accurate since return shipping costs are calculated with the provided information
What categories are exempt from prepaid returns?
Not every return is automatically allowed. Per Amazon’s policies, some categories are exempted from the prepaid returns program. Those categories are:
Business, Industrial & Scientific Supplies > Professional Dental Supplies
Business, Industrial & Scientific Supplies > Professional Medical Supplies
Certified Preowned Watches
In addition to the categories above, Amazon allows sellers to request exemptions for SKUs that:
have special shipping or handling requirements (like dangerous goods)
are non-returnable by law
are high-value (greater than $100) items need special shipping (like shipping insurance)
are non-physical (like warranties or digital software)
Request exemptions for SKUs in bulk by going to the Return Settings and Return Attribute Overrides link.
Other important information
Sellers can still set returnless refunds, and customers who request a refund will get a full refund as soon as they submit their request
Sellers are charged only when the customer returns the package to the carrier (when the label is scanned)
Sellers can also appeal an Amazon-authorized refund or return if they believe that the refund or return should not have been authorized
Reimbursements for customer-damaged products are limited to 50% of the order value of the product
Sellers are responsible for filing a claim with the carrier if the return is lost in transit
FBM or MFN sellers can unenroll from the Prepaid Return Label program by contacting seller support
For many sellers, this program will streamline customer service and save time. However, returns should still be monitored and claims filed if packages are lost in transit or if products are damaged by customers.
The Prepaid Return Label program will encourage more customers onto Amazon’s marketplace, and easier returns generally eliminate customer obstacles to purchases. Indeed, the ease of returns will likely encourage more customers to shop on Amazon.
Use the Advanced Search function in QuickBooks Online to get a list of specific transaction types. Check out this article for a quick guide to viewing sortable lists of your transaction types.
Sellers sometimes need to see a sortable list of specific transaction types in QuickBooks Online. This is important for sellers on Amazon who are trying to reconcile transactions like refunds in QuickBooks Online with refunds on Amazon.
Using QuickBooks Online’s Advanced Search function, you can search and filter every type of transaction, including individual transaction lines.
This is helpful if you’re searching for specific types of events (provided you’re tracking them). For instance, if you’re tracking type Warehouse Damage events in the description field, then you can filter for documents that contain the phrase Warehouse Damage in the description field. Of course, you’ll need to have entered details consistently.
If you’re using SellerZen, then you’ll be able to filter reimbursements by reason code in the description field. Whether it’s a Warehouse Lost, Damaged, or Return, you’ll be able to pull up relevant transactions.
Click on the Magnifying Glass and Advanced Search.
Click on the drop-down menu and select the type of transaction you want. For this example, we’ll select Refunds.
If you have any other filters you want to apply, then you’ll select that here. You can also leave it as default and display all refunds.
Once you’re ready, click on the Search button to see all your refunds.
If you’re looking for refunds on a specific date or between a specific period, then you can filter those out.
While you can easily search for individual refunds using various filters, using date periods will allow you to reconcile refunds in QuickBooks Online with refunds on Amazon. There may be some slight inconsistency due to timezones. To adjust for this, add an extra day at the beginning and the end of the date period.
Using Advanced Search will give you a quick way to see if you’ve managed to enter all the invoices and refunds in QuickBooks Online.
Dealing with refunds and returns on Amazon is a fairly straightforward process. If you’re using FBA, then it’s a hands-off process unless something goes wrong. But refunds and returns can quickly turn into a big mess in QuickBooks Online if you’re not careful.
Whatever method you use, it’s important that you’re consistent. For example, FBA sellers may use sales receipts, while FBM sellers may use invoices. They’re similar in that they ultimately record a sale and adjust accounts accordingly. Sellers who do both may mix and match, but doing so may make tracking certain transactions difficult.
In this article, we’ll go over how you can process Amazon refunds in QuickBooks Online. We’ll look at the different scenarios for Amazon refunds and returns, and we’ll see how to create the proper documents in QuickBooks to keep your accounts and reports accurate.
When you create a refund receipt in QuickBooks Online, inventory is automatically increased by the quantity in the refund document. This makes it difficult for sellers who use QuickBooks Online to track inventory since many returns on Amazon aren’t quite resellable. What’s worse, customers don’t return the item, return the wrong item, or they return junk. We’ll go over what to do with these instances below.
To create the corresponding QuickBooks Online refund, click on the + icon on the top right of the screen and Refund Receipt.
While Amazon has the amounts as a negative, with the referral fee a positive number, we have to reverse that since we’re creating a refund receipt. That’s because the refund receipt already debits the amount going out of the selected account.
The Referral Fee Refund is a credit to the income account, so you’ll have to enter a negative number. If you just copied what Amazon displays, then your accounts will be incorrect.
If the product is returned to you in the same condition as it was received, then you’re done!
What to do when Amazon refunds the customer without a return
In these instances, you’d still create QuickBooks Online refund receipts. But you’d also have to account for the increase in inventory because all refund receipts automatically increase inventory. We can do this by creating an additional sales receipt for $0.
A sales receipt, like an invoice, will properly deduct inventory and adjust the Sales of Product Income and Cost of Goods Sold accounts.
Let’s take a look at the product report above.
You have an invoice that removes 1 from the Inventory Asset account. The refund receipt adds another 1 back into the Inventory Asset account. Because you didn’t receive the returned product, the sales receipt reduces the Inventory Asset account by 1.
Until you receive the product back to inspect or Amazon reimburses you, you’ve lost the cost of the item. So the Cost of Goods Sold account is $10 for that reason.
What to do when customers eventually return the product and it’s sellable
Once you’ve created the sales receipt to properly account for the refund without return, you’ll have to create an additional document to account for the product that the customer eventually returns.
We’re assuming that the product is still in sellable condition.
We’ll do this by creating a credit memo to adjust inventory accordingly.
Much like a sales receipt for $0 subtracts 1 from inventory, a credit memo for $0 will add 1 back into inventory. QuickBooks Online will adjust the other accounts accordingly.
In this screenshot, we’ve already created the sales receipt for $0 because the customer didn’t yet return the product. Then we created the Credit Memo for 1 at $0 because we received the return and it’s in sellable condition. The accounts are now accurate.
You can also just wait for the return, inspect it, and then create just the Refund Receipt if it’s sellable. But if it takes two months for the return to get back to you, you won’t be able to keep track of the transaction.
It’s better to record the lack of return with a Sales Receipt and then account for the return later with a Credit Memo when or if you actually receive it.
What to do when customers return the product but it’s not in sellable condition
If you’ve sold on Amazon long enough, then you’ll know that customers don’t always return items in the same or sellable condition. It’s likely that you have a pile of damaged customer returns that you aren’t able to resell or recover. It’s also likely that you’ll have a few returns that are junk or not your items.
For items that are a complete loss, you don’t have to create any more documents if you’ve already created a sales receipt for $0.
By doing this, you’ve “sold” the item for $0 and your reports will show a sale for $0 and $10 for the Cost of Goods Sold. Essentially, you’ve lost $10 on that sale because of the cost of the item.
You’ve also lost some money due to shipping, pick and pack fees, and refund administration fees. These fees are properly recorded on the Expense accounts if you’ve been following our guide and creating the proper service items and accounts. When you run a Profit and Loss report, these expenses will show up.
If you suspect fraud or the customer was refunded an amount he shouldn’t have been (for FBA orders), you can file a SAFE-T claim for reimbursement. We’ll deal with these reimbursements in our Reimbursements article.
What to do when customers return the product and it’s used but sellable
Sellers usually use one of two popular options for handling these types of returns.
Using one inventory item to track used and new
Some sellers may have one inventory item for new and used products. And they’ll track those outside of QuickBooks Online.
Sellers will create the credit memo to increase the quantity in QuickBooks Online if they’ve already created the sales receipt. Then they’d sell the item as Used on Amazon or some other marketplace and record the sale normally under one inventory item.
Creating a new inventory item for used returns
Other sellers will create a different inventory item for used products. So they’d have two separate SKUs: Garden Rocks and Garden Rocks Used.
Since sellers would have already created the sales receipt for $0, they’ll create a Credit Memo for the Used SKU.
The Credit Memo increases the Used inventory by 1 at $0. Without the Credit Memo, they’d have negative inventory when the sale occurs for the Used SKU.
While the Used SKU will record 100% profits because of a $0 COGS, you’ll have already recorded the COGS on the original order with the sales receipt. Your overall profit and loss report will still be accurate.
Tracking your new and used inventory this way does give you better details about your business, but it also results in more work.
What if Amazon reimburses (in cash or inventory) for customers who were refunded but didn’t return?
If you’re using FBA, then Amazon automatically reimburses you 30-45 days after the customer fails to return the item.
Regardless of how Amazon reimburses you (whether in cash or in inventory), you’ll deal with it through Vendor documents. Check out our link on how to handle Amazon reimbursements properly. Or scroll down to the bottom of this article for our section of related articles.
Understanding the QuickBooks Online inventory report
If you’re consistent with your usage of the document types, you can run this inventory report in QuickBooks Online to quickly see your refunds and returns.
In this report, we see these details for a new product sold through FBA: 21 refunds, 16 sales receipts, and 2 credit memos. 5 refunds were issued upon return, and those 5 returns were put back into sellable inventory.
Of the 16 sales receipts, 2 (Credit Memos) were eventually returned in sellable condition. The remaining 14 sales receipts had some kind of issue (damaged, used, or customer failed to return). You’d have to create a removal order and decide what to do with those items. Some of these may need SAFE-T claims filed, some will be complete losses, and some may be sold as used after inspection.
Being consistent with our usage of invoices and sales receipts allows us to track inventory issues. If you’re inconsistent, then you won’t know how many returns have issues and need closer inspection.
Automate your data import from Amazon to QuickBooks Online with SellerZen! Sign up for SellerZen to try it for free and see how we’ll automatically create all of the required documents so that your inventory and reporting is always accurate.
You’ll no longer have to worry about whether or not you’ve created the right documents or if they’ve been accurately entered.
Handing Amazon FBA refunds and returns on QuickBooks Online may seem like a straightforward process, but it can become complicated under certain scenarios. Amazon sometimes issues refunds before customers return products. Or customers will return an item that is damaged and no longer sellable. In these situations, you’ll have to account for the product in some way.
It would be inaccurate to create a refund document in QuickBooks Online when Amazon refunds without the return since that would increase your inventory count. That’s because refund documents in QuickBooks Online increase your inventory since it assumes you’ve received the product back.
Since you’re using Amazon FBA, creating a refund receipt isn’t accurate since sometimes no inventory was returned to the fulfillment center. By creating refund receipts for all your Amazon refunds, your QuickBooks Online inventory quantity will be incorrect. If you’re fulfilling orders on several marketplaces, then the incorrect count can lead to costly delays for your business.
You’ll end up selling inventory that you don’t have. What’s worse, your employees may end up selling used and returned stock as new for those products that were returned but not thoroughly inspected. The last thing you want is negative feedback caused by canceled orders or item not as described returns.
How does SellerZen handle Amazon refunds in QuickBooks Online?
SellerZen’s automated import service creates the proper documents for all Amazon transactions, including refunds and returns. That way, you’ll always have your inventory count correct for the connected marketplace, even for cases where products are returned 60 days after refunds are issued.
For Amazon refunds, we’ll not only create the refund receipt for the returned product, but we’ll also check to see if the customer returned the order. If no returns are found, then we’ll create the proper Vendor document to adjust your inventory on hand.
We do this to offset the increase generated automatically by the refund receipt. We’ll later generate the proper documentation if the customer returns the item and it’s added back to your FBA inventory for sale. No matter what happens, we’ll always have your Amazon inventory reconciled so that you can focus on growing your business instead of reconciling Amazon FBA refunds, returns, and QuickBooks Online inventory.
How does SellerZen handle Amazon FBA refunds and returns?
SellerZen creates a sales receipt for instances where refunds are issued but no returns are found. We do this because you’ve received nothing from the sale, and the sales receipt removes one inventory. Essentially, you’ve “sold” one item for nothing. Any other amount here will result in inaccurate reporting because the product is a loss at this point until the customer returns it. The other accounts, like your Sales of Product Income and your Cost of Goods Sold, are adjusted properly as a result of the sales receipt.
Without the sales receipt, all refunds would increase your inventory count. Over time, this can lead to a significant inventory discrepancy since not all refunded orders would be returned and in sellable condition.
If the customer later returns the product and it’s in a sellable condition, then we’ll create the right QuickBooks Online document to adjust your quantity on hand. That way, your QuickBooks Online inventory will remain synchronized with your current Amazon FBA inventory.
This kind of accurate reporting is necessary to reconcile your inventory counts on QuickBooks Online with Amazon. Of course, manually processing refunds and returns can be a tedious task since you’ll have to run return reports to see what, if any, items were returned in sellable condition. And you’ll have to do this on a fairly regular basis since customers have 30 days or longer to return an item. We’ve even seen instances where customers returned items several months after they were refunded, prompting Amazon to reverse their reimbursement.
All of these cases can prove frustrating to track on Amazon when you’re selling hundreds of items a month. By using SellerZen’s automated service, you can rest assured that all your connected marketplace transactions are precise. And the best part is that all of these order-related transactions will cost you nothing since we only count the initial order.
Keeping your QuickBooks Online company and your Amazon seller account synchronized and in harmony is not an easy task. For many small business owners, this task alone requires a bookkeeper or a well-trained data entry clerk, but even they can make mistakes. Using an automated service like SellerZen can guarantee quick, accurate documents and reduce downtime caused by human errors.
Automatic Amazon reimbursement services can recover thousands of dollars for you. FBA is a great way to automate your business, but no system is perfect. Once you send your inventory to FBA, the entire process, including returns, should be automated. Unfortunately, that’s not always the case.
If you’ve never taken a look at your refund and payment reports, then now is an excellent opportunity to see whether or not Amazon owes you money. There are many reasons why Amazon should reimburse you, and if any of these situations below apply to you, then you should consider running the reports or looking for ways to automate the return process.
The customer is refunded but never returns the product
Warehouse worker damages or loses items
Inbound shipping damage or lost items
The customer receives a large refund because your product was part of an order
Customer refunded more than he paid
Amazon customer concessions are taken out of your account
These are but a few of the issues some of the Amazon refunds websites handle. We’ll discuss four Amazon refunds services below.
SellerZen is not affiliated with any of these services, nor does SellerZen endorse any of these services. We’ve created this list only for informational purposes, so do your own due diligence before you sign up with any services listed in this article.
AMZ Suite charges a subscription fee of $79 a month, and this might be a high price for smaller sellers who aren’t doing as much volume since $79 is more than what may be recovered by the service.
However, AMZ Suite also provides feedback monitoring service that promises to remove negative or neutral feedback that isn’t relevant to the product or seller. This service alone may be worthwhile for some sellers, and this particular service is unique amongst the Amazon refund services.
The inventory salvager also looks for reimbursements owed to you for lost or damaged inventory. Most reimbursement services cover these instances.
Together, these three services may be worthwhile for sellers who are doing a lot of volume on Amazon. However, if you’re hesitant to pay yet another subscription fee, then look below for other alternatives.
AMZ refund takes 8% of the expected reimbursements you’ll receive. Like AMZ Suite, AMZ Refund also handles FBA inventory reimbursements.
Because this business takes a percentage of your reimbursements, it’s an attractive option for many small to medium sellers on Amazon. If there are no reimbursements, then sellers pay nothing for the service.
Helium 10 is a software suite like AMZ Suite. Their refund genie is part of that software suite. It claims to find only lost and damaged inventory from fulfillment centers.
What these services do is automate your returns process so that you don’t have to worry about running the reports and looking for reimbursements. For many sellers, running these reports may be a daunting task because they also have to learn how to use spreadsheets or manipulate their Amazon reports to show what is owed.
What it comes down to is whether or not the amount of reimbursement is worth your time. It’s not just a matter of downloading the reports, but comparing them on a spreadsheet, and then submitting the claims with the correct order and transaction IDs.
One word of warning: Amazon sometimes suspends accounts that use automated refund services because of the sheer volume of incorrect requests. You may want to manually confirm the reimbursement requests before submitting them.
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