.. You’ve received a notification about a refund.
.. You casually go to check your account only to realize that the numbers don’t add up.
!!.. There’s a much larger chunk missing from your funds - about three times the cost of the product! With lightning speed you contact Seller Central support to ask about the mistake but they reply there isn’t any. It’s just an Amazon Goodwill Refund.
In case you’re as confused as I was when I first got that answer, allow me to shed some light on it.
What Is Amazon Goodwill Concession Refund?
When there is an issue with an order in terms of shipment and processing, Amazon sometimes issues a refund AND gives some extra cash to the customer. It is a form of apology in an effort to encourage the buyer to keep using the platform. These refunds can sometimes be a lot bigger than the actual cost of a product.
I read dozens of posts on FB groups for Amazon sellers on this subject and some of the figures are pretty incredible. For example, there’s this one buyer who asked for a $14 refund and got it along with an extra $150.
That’s quite a trade, right? Another buyer got almost the same amount for an item worth around $30.
On the other hand, there are cases of Goodwill concession being only a couple of dollars, barely a third of the product’s price.
What Are the Conditions for a Goodwill Refund?
Goodwill receivers are buyers who are granted an ADDITIONAL refund amount, on top of the price they paid for the product. The process starts when they make a complaint to the Amazon customer service and ask for a refund. On a case by case basis, an additional refund amount is granted by Amazon, to compensate for negative customer service experience, late deliveries, lost packages and similar situations. That is a Goodwill Refund.
Who decides whether they’ll get it or not? The customer agents. They seem to be the ones holding all the power here.
If you search the internet a bit, you’ll probably find dozens of messages from people who claim they’ve cracked the system. Some say that the concession is given to buyers who complain way too much. Others say that it's better to prepare a sad story and play the sympathy card.
The truth is though, that there’s no one-fit-all formula. My guess would be that they have a way of calculating each buyer’s worth - how much they might spend on the site in the future. Whether I’m right or not - who knows?
How High Can a Goodwill Concession Be?
Fulfilled by Amazon:
When it comes to FBA orders, there are absolutely no rules. The customer service team discusses and offers concessions, so it’s really up to them and their calculations. There is no official Goodwill concession refund cap. Could be anything.
Fulfilled by Merchant:
On the other hand, FBM orders, when the seller himself processes and ships the product, do have a concession cap. While the refunds can’t exceed the price of the sold item, the concession can. It is calculated using a special formula so if math wasn’t your favorite subject in school, look away now.
Amazon defines the FBM concession cap as the higher of these two numbers:
- 50% of the amount that the buyer paid for shipping and the product
- Double the amount paid for shipping plus $30
For more rules on FBM concessions issued by you, check here.
Why Is Goodwill Refund Taken from My Account?
It is Amazon’s policy to charge the concession refund from your account first. The amount they take from your account is tied to the order-id.
This might be an inconvenience to you but you can rest assured that you will be reimbursed that same amount within 45 days.
Here is what the process looks like:
In rare cases when this doesn’t happen, you can simply notify the customer support and ask for it manually. But you will need to do this almost never.
One of the biggest problems with Amazon’s Goodwill reimbursement is that it doesn’t show up in your transactions as a special type of event. It comes up as a regular inventory reimbursement. This will, quite logically, make you think that the item is shipped back and in your inventory (as is the normal reason for Inventory Reimbursements) when it actually isn’t.
The confusing part is Quantity: 1. Reality is, no physical Unit was involved in this step.
Should the Buyer Return the Item after Getting Goodwill Refund?
Yes! This is one of the most common mistakes buyers make with the Goodwill refund. They take the money and forget about the whole thing. However, they are actually obliged to send the item back to the warehouse within 45 days.
If they don’t do it, Amazon will simply charge them for it. Of course, then, you’re in luck - Amazon will reimburse you for that inventory that was never returned, so you will not have to worry selling the returned item again.
Shopkeeper Separates Actual Inventory Reimbursements from Goodwill Reimbursements
On your Shopkeeper Sales Overview page, you will see exactly which reimbursements are Goodwill and which are the normal Inventory Reimbursements.
You can clearly see which reimbursement event was refunding you the Goodwill amount, and which reimbursement was for the unreturned unit to inventory.
That way you can easily keep track whether all Goodwill Refunds were reimbursed to you by Amazon.
You're awesome for reading this far. Here's a gift for you.
Get 14-day free trial of Shopkeeper, instead of the usual 14 days.