NEW CHARGEBACK FOR VENDORS – Jump to the announcement

From packaging problems to technical errors in transmitting Electronic Data Interchange (EDI), Amazon will charge vendors for almost anything they can.

Amazon Chargebacks are operational fees a vendor will see as deductions from their Amazon remittance checks. Amazon vendors should familiarize themselves on how these fees impact their account and what steps they can take to avoid deductions.

According to Amazon, chargeback occurs when a cardholder contacts their bank to dispute the charge for an order placed on Amazon.com. These fees occur when Amazon claims the vendor did not follow strict vendor compliance requirements.

Chargebacks are also known as “charge disputes” and they can be filed for a variety of reasons, including unauthorized use of the credit card. The fee for each operational violation varies for each compliance requirement Amazon imposes.
 

Where are Amazon Chargeback fees located?

 
Head over to Vendor Central and log in. There are two areas chargebacks can be viewed under the Payments tab.

1) Remittance

Once a check is opened all payments and deductions are itemized. A chargeback will be listed here as a deduction from the invoiced total. To navigate to this tab, hover over the Payments tab and select Remittance. Select a date range or invoice number when prompted.

Vendors should be able to select a payment number from the Remittance List (as seen below):


Chargeback types will be listed under Description and the total of the charge will be under Invoice Amount:

Many invoices are listed here for one check (payment number). The cadence Amazon pays checks is dependent on the NET terms they have with the vendor.

For example, if a Vendor has NET 50 terms, Amazon must submit a blanket check every 50 days.

2) Vendor Operational Performance

This gives a comprehensive view of all charge types and totals dating back one calendar year. It is important to note this tab is most effective at identifying operational errors.

After vendors log into Vendor Central, they should hover over the Payments tab to select Vendor Operational Performance (as seen below):

amazon-chargebacks3

This will lead Amazon vendors to a dashboard detailing the their operational successes and opportunities.

Pro Tip: Filter the data to the last 365 days to gain a better view of compliance.

Non Compliance Performance data can be seen in the top left corner. Here, vendors can view chargeback fees assigned to their various categories, which we will discuss below.
 

Types of Amazon Chargebacks

 
Chargebacks can be applied for a variety of operational malfunctions or non-compliance including packing or technical errors.

There are 5 types of Amazon Chargebacks including:

NEW UPDATE: Ships In Own Container Issue In an effort to reduce waste, Amazon is expanding its Frustrating-Free Packing Program requirements. Starting May 31, 2019 the Ships In Own Container chargeback will appear under the Vendor Performance Dashboard in Vendor Central.

PO Related Issues – This includes chargebacks for confirming POs in a timely manner, shipping within the ship window and shipping extra units.

Receive Related Issues – Any compliance violations encountered at the Amazon FC when the shipment arrives, like a missing/unscannable barcode label, a carton label with missing information, or no barcode on the products inside the carton.

Prep Related Issues – Includes charges for the vendor not properly bagging (polybagging) items in cartons correctly or for not properly taping the carton closed.

ASN Related Issues – Charges are applied when an ASN (Advanced Ship Notice) is not sent correctly from Vendor Central or the vendor’s EDI trading partner.

Transportation Related Issues– This includes chargebacks for the vendor failing to set up routing requests for transporting packages.
 

How Vendors Can Unpack Each Amazon Chargeback

 
To learn about a chargeback, or set of chargebacks, vendors can select a chargeback type (as seen below):

In the new window, each chargeback for PO Related Issues will be displayed in detail.

A few important items Vendors should take notice of include:

  • Financial Charge (amount of the chargeback)
  • Status of the chargeback’s payment
  • Issue Type (why the chargeback was assigned to a PO)

 
Granular detail of a chargeback can be viewed by clicking on Details. This will show a breakdown of the PO and explain why charges are assigned and how to avoid it in the future.
 

How can Amazon Chargebacks be prevented?

 
Each chargeback is unique. Prevention techniques apply to each chargeback differently depending on the situation.

8 Tips on How to Prevent Amazon Chargebacks:

PO Acknowledgement charges – Advise the vendor to acknowledge POs in vendor central and indicate which units can ship in the ship window. This must be completed 12 hours after the PO arrives (Amazon counts weekends as business days). If the vendor uses EDI, advise them to have their EDI provider look into the mapping for their 855 PO Acknowledgment.

Overage on PO units – Advise the vendor to look into any packing issues at the DC level that would cause discrepancies.

PO On Time Non-Compliance –  Many vendors are not aware these charges will be applied if they ship a day or two before the start ship date. Advise vendors to abide by the strict ship window to avoid charges.

Unfilled by cancel date–  Again, advise vendors to abide by the cancel date of the ship window. If units are not available by the cancel date, have them cancel the units off the PO and ship what they have available. If this happens frequently, the vendor can ask the Amazon buyer to write PO’s with a wider ship window. It may also be helpful for the vendor to ask the Amazon buyer to send POs on Monday mornings only.

No carton content label – Vendors can print carton labels directly from Vendor Central under the Orders menu and Shipment tab. They’ll need to have ASIN level information on the PO ready. If the vendor uses EDI advise them to have their EDI provider correct the GS1 Label mapping for Amazon. GS1 labels are printed directly from the vendor’s ERP system, so they’ll need to handle that outside of vendor central.

Bagging/Taping issues – Advise the vendor to read the Amazon Packaging Certifications Guidelines to learn how they need to comply operationally. This document can be found in Vendor Central under Resource Center, Legal Documents.

ASN related issues – The vendor must send the ASN BEFORE the PO’s shipment is scanned in an Amazon FC. This can be done by going into Vendor Central and sending an ASN manually the same day the package ships. If the vendor uses EDI advise them to contact their EDI provider and correct Amazon’s 856 mapping.

Routing issues – If a vendor ships collect, they must submit a routing request prior to sending PO shipments to Amazon FCs. Gently remind the vendor that requesting routing is necessary to avoid charges.

For more information on Amazon vendor chargebacks, email tara.johnson@tinuiti.com

 

 

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