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Amazon is once again shifting the landscape for third-party sellers, this time with significant updates to how overstock and unfulfillable inventory are handled. By prioritizing sustainability and value recovery, the platform is moving away from traditional disposal methods. For sellers, these changes mean a shift in operational strategy to avoid unexpected inventory outcomes. Many brands are now seeking expert Amazon services to navigate these complex logistical transitions.
Prepare for Mandatory FBA Donations Starting September 2025
The most significant change on the horizon is the transition of the FBA Donations program from an optional feature to a mandatory requirement. Starting September 30, 2025, Amazon will automatically re-enroll all sellers who had previously opted out. Under this updated policy, any request to “dispose” of eligible inventory will automatically trigger a donation process rather than destruction or recycling.
For the U.S. market, Amazon continues its partnership with Good360, a nonprofit that distributes these goods to a vast network of local charities. Sellers should view this change not just as a compliance requirement, but as a logistical shift. Once the deadline passes, “Disposal” essentially becomes synonymous with “Donation” for all eligible products.
Understand the New Default: FBA Liquidations
In addition to mandatory donations, Amazon is updating its “Value Recovery” settings to make FBA Liquidations the default selection for unsold inventory. While liquidations are not mandatory in the same way donations are, the system is being reconfigured to favor this recovery path over disposal.
The liquidation program allows sellers to recover a portion of their inventory value by selling excess stock to wholesale liquidators. If you do not manually adjust your settings, the system will automatically funnel eligible unsold items into these liquidation channels. This is designed to help sellers recoup costs, but it requires a closer eye on inventory health to ensure that products aren’t being sold off at liquidation prices when other strategies might be more profitable.
Leverage Tax Benefits with Annual Donation Certificates
One of the primary advantages of the mandatory donation shift is the potential for corporate tax deductions. To facilitate this, Amazon provides an annual Donation Certificate that summarizes all items donated throughout the year.
These certificates are typically made available in the Seller Central dashboard by February 1st of the following year. While Amazon provides the documentation of the physical goods moved, sellers should consult with tax professionals to determine the exact valuation and deduction eligibility for their specific business structure. Having this documentation centralized makes the year-end accounting process significantly smoother for high-volume sellers.
Audit Your Inventory for Donation Eligibility
Not every product sitting in an Amazon fulfillment center is eligible for the donation program. Amazon maintains strict safety and legal compliance standards to ensure that donated items are safe for end-users. Sellers must be aware that the following categories are often excluded, similar to policies found in the European FBA guidelines:
• Hazardous Materials (Hazmat): Any flammable, corrosive, or otherwise dangerous goods.
• Counterfeit Goods: Items suspected of intellectual property infringement.
• Expired or Broken Items: Perishables past their date or non-functional products.
• Restricted Items: Products that violate specific safety or legal policies.
By auditing your catalog against these criteria, you can better predict which items will be donated and which will require alternative removal strategies. For those looking to master these nuances, specialized Amazon seller courses can provide deeper insights into inventory health management.
Strategize Your Removal Settings to Protect Brand Integrity
For many sellers, the primary concern with automated liquidations and donations is brand protection. If you are concerned about your products appearing in unauthorized discount channels or want to prevent your brand from being associated with specific secondary markets, you must take proactive steps. You can also contact us to discuss a tailored strategy for your specific brand requirements.
The only way to bypass the mandatory donation and default liquidation settings is to manually update your “Automated unfulfillable removals” settings to “Return to Seller.” While this option ensures you maintain total control over your inventory, it does incur a per-item removal fee and logistical costs for shipping the items back to your warehouse. Sellers must weigh the cost of these removal fees against the benefits of brand protection and potential control over the secondary market. Strategy involves reviewing your “Value Recovery” dashboard frequently to ensure your settings align with your goals at EHP Consulting Group and beyond.
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Written By: Janine Alaban
Email: [email protected]
Website: http://www.ehpconsultinggroup.com
Number: 925-293-3313
Date Written: September 02, 2026