Amazon chargebacks are financial penalties for violating Amazon’s operational policies, such as order management, shipment management, and packaging. These fees vary depending on the compliance requirement that the vendor breaches.

They are triggered when a cardholder disputes a charge to their bank for an order made on Amazon.com. If Amazon claims the vendor didn’t align with its compliance requirements, they charge them a fee. 

Basically, when a cardholder disputes a charge, and it turns out the vendor didn’t comply with Amazon’s standards, Amazon charges the vendor.

Each chargeback requires identifying its cause and working to solve it. This article will explore the different types of Amazon chargebacks while giving you some tips for avoiding them. 

Types of Amazon chargebacks

Many different types of Amazon chargebacks can be applied for various policy violations, including packing or technical errors. Some of the most common include:

• Purchase order (PO) issues – These chargebacks can be charged for failing to confirm POs on time, shipping extra units, or shipping outside of the specified ship window. These are considered to be one of the most frustrating chargeback types. It has three subtypes with penalties ranging from three percent to ten times the cost of the product.
• Receiving issues – Amazon charges these chargebacks when the shipment arrives at the FC with a compliance violation, like a missing/unscannable barcode label, a carton label with missing information, or no barcode on the products inside the carton.
• Packaging issues – These chargebacks are issued for failing to package products according to Amazon’s requirements.  
• Advanced ship notice (ASN) issues – These chargebacks can be issued for failing to submit an ASN on time or for submitting an inaccurate or incomplete ASN.
• Transportation issues – Shipping products without using Amazon’s preferred carrier or failing to ship products within the specified transit time can produce chargebacks.

Preventing Amazon chargebacks

The best way to avoid Amazon chargebacks is to ensure you are familiar with Amazon’s operational policies, as there’s no way to avoid chargebacks if you don’t comply with them. Follow these tips to prevent the different types of Amazon chargebacks:

• Unfilled by cancel date – If units are inaccessible by the cancel date, cancel the units off the PO and ship what you have available. This is a better solution than suffering a chargeback, but if it happens constantly, you can ask the Amazon buyer to write POs with a wider ship window.
• Labeling impact on charges – Labeling impacts charges due to process aspects (packing, picking, box creation) and technical aspects (using specific labels). Correct labels such as AMZNCC or SSCC can help you ensure efficient receive by Amazon.
• PO Acknowledgement charges – Acknowledge purchase orders in Vendor Central and indicate which units can be transported in the shipping window within 12 hours of receiving the PO. You should also have your EDI provider check the mapping for their 855 PO Acknowledgment if you use EDI.
• No carton content label – issue carton labels directly from Vendor Central under the Orders menu and Shipment tab to avoid no carton content label charges. You’ll need to have ASIN-level information on the PO ready. However, you should have your provider correct the GS1 Label mapping for Amazon If you use EDI.
• Overage on PO units – Investigate any packing issues at the DC level that could cause discrepancies.
• Bagging/Taping issues – Read the Amazon Packaging Certifications Guidelines to learn how they need to misbehave operationally and avoid bagging/ tapping issues. This document can be set up in Vendor Central under Resource Center, Legal Documents.
• PO On Time Non-Compliance charges – Abide by the strict ship window. You’ll be charged if you ship a day or two before the start date. It’s recommended to assess warehouse operations to identify potential problems and make necessary changes.

Disputing Amazon chargebacks

When Amazon issues a chargeback to a vendor, the vendor will receive a notification email with the chargeback details. The vendor will then have the opportunity to dispute the chargeback by providing Amazon with evidence that they did not violate Amazon’s policies.

If the vendor’s dispute is successful, Amazon will reverse the chargeback. You must compile all relevant evidence establishing the order’s legitimacy to dispute the chargeback. However, the chargeback will stand if the dispute is unsuccessful.

Conclusion

Amazon chargebacks can be prevented with the right knowledge and approach. Vendors can significantly reduce their risk by knowing Amazon’s operational policies and understanding the root causes of chargebacks. If you have additional questions or want us to help you on your Amazon journey, please contact the BellaVix Team.

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