Amazon’s Terms of Service for Sellers: Paragraph F4: Compensation & Moving Inventory

Moving forward, Amazon will not reimburse you if you are an FBA user and your products are damaged or your inventory is lost.

They will, however, compensate you. When you think of compensation, that could be anything. Amazon has changed the language. If we know anything, Amazon changes the language to protect itself. Reimbursement always seemed to be the cost of it. There was a whole provision in place that you would get reimbursed the sale price, less FBA fees. But now it’s saying ‘compensate’. We don’t know exactly how Amazon’s going to play this out. Compensate could be like giving you a gift card, or maybe lowering fees, or doing some type of an offset. We really don’t know how that’s going to play out, but it’s certainly a provision that’s important for Amazon sellers to be aware of.

Amazon has kept a sentence that says they may move units among facilities, which to me makes it really difficult for sellers to opt-out of commingling. Also, Amazon shipping it from New Jersey to New York, Connecticut, Massachusetts, and all of a sudden your products are getting banged around, they’re getting damaged, and you’re going to get dinged with a used sold as new or other complaint. That’s still in the paragraph. Well, it’s still on this reimbursement compensation. Amazon used to take liability for any reimbursements. At this point, now that they’ve gotten rid of that completely, they might compensate you.

What’s going to be the factors for Amazon’s decision whether they’re going to compensate you or just kind of screw sellers out of the value of their products?

We don’t know exactly how this is going to play out, but these are some of the issues that Amazon sellers face. I see it from our perspective of writing plans of action for sellers that we are going to need to argue that they should compensate or they’re required to compensate for whatever reasons and argue the provisions of F-4 when they owe sellers money. That’s definitely something that we have to figure out.

I think we can win these arguments. I see the more broad Amazon makes these paragraphs, the better it is for us to come up with creative arguments and appeals. I noticed that Amazon changed its reservation of rights in terms of limiting inventory on its shelves as stepping back a bit and making it even harder for sellers to interpret when Amazon will or will not refuse inventory. It also flies in the face of the main news that came out of this change that Amazon was going to start giving sellers more notice of issues and more opportunities to be heard and more opportunities to appeal. But the language change in F-4 regarding storage is taking away from that. Is it going to cover wholesale costs? Is it going to cover retail, less FBA? Is it just going to be something else that’s not liquid? I mean, we just don’t know yet.

If you’ve been suspended on Amazon or have questions about the new TOS, call us today for a free consultation: 1-877-9-SELLER.

Make sure you watch all of our videos regarding the loopholes Amazon created in the new TOS.