Avoiding Amazon Vendor Chargebacks: 6 Essential Strategies

Amazon vendors have extra guidelines and restrictions which they must adhere to. The penalty for breaking one of these specific rules is to receive a fine for non-compliance, these are referred to as Amazon vendor chargebacks.

What are Amazon vendor chargebacks?

An Amazon chargeback is an enforced fee that Amazon charges a vendor if they find an issue with the stock they purchase from you. Essentially it is a fine for not complying with Amazon’s vendor terms & conditions. 

There are different types of Amazon chargebacks, the most common ones are all associated with the shipping and logistical process. 

What are the different types of Amazon vendor chargebacks?

The four most common chargebacks Vendors are likely to experience are listed below:

Issues related to the purchase order

This charge is given when Amazon finds errors related to the purchase order. For example, if you miss your Amazon shipment window or if you send the wrong number of units to Amazon.

Issues related to the received shipment

These charges typically relate to compliance violations encountered at the Amazon Fulfilment Centre after the receipt of a shipment, these include missing barcodes, missing information and content accuracy issues.

Issues with preparation and packaging

Vendors will be charged if products aren’t properly enclosed the way they should be when they are shipped to Amazon. This includes charges for not properly bagging items in cartons correctly or not properly taping the carton closed.

Advanced Shipment Notice (ASN) related

If the ASN is not sent by the vendor within two weeks of Receipt of the Shipment or there is an error in transmitting the EDI, vendors will be charged.

How can you avoid Amazon vendor chargebacks?

Confirm purchase orders within 12 hours

Vendors should ensure that their purchase order is completed in under 12 hours after it arrives and indicate which units can ship in the shipment window given to avoid PO chargebacks.

Print shipping labels first and take care when labelling units

Print shipping labels beforehand and take time to make sure all units are labelled correctly. Vendors should also try to keep everything inside easy to scan to avoid human error on Amazon’s part.

Do your homework on Amazon-approved preparation

Vendors should familiarise themselves with Amazon’s Packaging Certifications Guidelines and ensure they are Frustration-Free Packaging (FFP) optimised.

Improve your operation

Through the Vendor Operational Performance dashboard, a vendor can identify all of the chargebacks that Amazon has handed them. By reviewing the reasons for these chargebacks, vendors can find where the holes in their operations are and make changes to solve them. Vendors that are unsure where to start with improving their current operation should seek outside support from a specialist Amazon agency.

Arthia has a team of specialists to help you minimise chargebacks, as well as experience in all elements of being a vendor on Amazon.

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