The Amazon Refund Administration Fee for UK Sellers in 2026

In brief: The Amazon refund administration fee is the part of your original selling fees that Amazon keeps when you refund a buyer. For most products it is 20% of the order fees, capped at £5 for each item line in the refund. Amazon credits the rest of the fee back. Books, music, video and DVD (BMVD) follow their own rules, and partial refunds return the referral fee in proportion to the amount refunded.

Amazon refund administration fee rules by product type

Refund	Non-media products	BMVD (media) products
Full refund	Amazon keeps 20% of the order fees, up to £5 per line, and credits the rest	All per-transaction order fees are credited back
Partial refund	Amazon keeps 20% of the order fees, up to £5 per line, and returns the referral fee in proportion to the share of the price refunded	Amazon keeps the variable closing fee and returns the referral fee in proportion to the share refunded
Individual plan sellers	Same as above	Amazon also keeps the per-item closing fee on partial refunds

The £5 cap works per line, not per unit. Refund two different products in one order and Amazon can keep up to £10. Refund three units of the same product and the cap stays at £5, because they sit on one line.

A worked example

Illustrative figures, using a 15% referral fee and ignoring VAT on the fee to keep the arithmetic clear.

A £24 kitchen item, fully refunded.

• Referral fee on the sale: £24 × 15% = £3.60.
• Administration fee kept: £3.60 × 20% = £0.72 (under the £5 cap).
• Fee credited back: £3.60 − £0.72 = £2.88.

A £300 appliance, fully refunded.

• Referral fee: £300 × 15% = £45.
• 20% would be £45 × 20% = £9, but the cap applies, so Amazon keeps £5.
• Fee credited back: £45 − £5 = £40.

At 1,000 refunds a year on the £24 item, the fees Amazon keeps add up to 1,000 × £0.72 = £720. That is a real cost of returns, separate from the lost sale and any stock you can't resell.

What it means for your bookkeeping

• Record three things, not one. A refund reverses the sale, credits most of the fee back and leaves a small fee behind. Posting only the net figure hides your true return costs. Our guide to recording Amazon sales in Xero shows a separate refunds line.
• VAT on the sale. Refunds reduce output VAT in the period the refund is made, not the period of the original sale. A £24 sale at 20% carried £4 of VAT, so the refund takes £4 off your output VAT that quarter. See Amazon sales on your VAT return.
• VAT on the fee. Fee credits reduce the fee and therefore the VAT you can reclaim on it. Take the VAT figures from Amazon's seller fee invoices and credit notes.
• The fee credit belongs with the fee. Net the credit against the referral fee account rather than posting it as income, so your fee ratios stay accurate. Agree this with your accountant.
• Returns processing is a separate charge. For some categories Amazon also charges a returns processing fee on FBA returns. See the returns processing fee guide.

Do you need to do anything?

No action is needed to apply the fee. As a check, compare a few refunded orders in your settlement with the rules above. A credit that doesn't match usually means a partial refund or a media item.

How TrueBooks helps

TrueBooks posts sales, refunds and each fee type from every settlement to their own Xero accounts with the right UK VAT, so fee credits sit against the fees they reduce. See what lands in Xero.