Amazon Vendor Chargebacks & Shortages: 2025 Recovery Guide
Struggling with Amazon Vendor Chargebacks? Learn how to recover fees, avoid penalties, and streamline your operations with our expert tips and chargeback recovery service.
Selling through Amazon’s Vendor Central platform is considered a valuable opportunity for many brands. However, partnering with Amazon comes with strict operational requirements, and failing to meet them can lead to costly penalties.
As an Amazon Vendor, you may have encountered Vendor Chargebacks—fees imposed for non-compliance with Amazon’s guidelines. These charges can quickly add up, increasing supplier costs and affecting profitability. Managing these requirements can be challenging, but understanding them is key to avoiding unnecessary fees.
In this blog, we’ll break down how chargebacks work, why they occur, and the steps you can take to prevent and recover them. By staying compliant, you can protect your revenue and maintain a strong relationship with Amazon. Let’s dive in!
What is Amazon Vendor Chargeback and Their Financial Impact on Your Profit Margins?
Amazon Vendor Chargebacks are fees imposed on vendors who fail to comply with Amazon’s strict operational guidelines. These charges can be substantial, cutting into profit margins and making it crucial for vendors to understand how to prevent them. Chargebacks are tied to specific operational metrics, and avoiding them requires a clear understanding of Amazon’s compliance requirements.
Amazon’s automation and machine learning systems help streamline operations and enhance customer support. However, these automated processes are not always flawless—errors can occur, leading to wrongful chargebacks and deductions.
When it comes to chargebacks, vendors face operational penalties and deductions for non-compliance. Since these fees are automatically deducted from invoices, disputing them can be challenging. While Amazon’s automated framework helps the company scale and improve efficiency, its reliance on machine-driven processes means errors can happen, placing a financial burden on vendors. Unfortunately, since these deductions are processed automatically, there is little incentive for Amazon to refine its system.
How Amazon Manages Chargebacks
When vendors fail to meet Amazon’s strict compliance requirements, the company may take various corrective actions. These may include rejecting inventory, returning or disposing of stock, restricting future shipments, and addressing issues related to the vendor’s preparation process.
Why Does Amazon Impose Chargebacks?
- Operational Disruptions – Non-compliance can interfere with Amazon’s well-structured logistics, causing inefficiencies and delays.
- Additional Costs – Failure to adhere to guidelines may result in extra expenses for Amazon, such as increased labor, storage, and disposal fees.
- Efficiency Impact – Non-compliance can slow down Amazon’s operations, potentially delaying customer deliveries and affecting overall supply chain efficiency.
ASN (Advance Shipment Notification) Accuracy
What It Is:
ASN accuracy refers to the correctness of Advance Shipment Notifications submitted by vendors. An ASN is a document sent before a shipment, detailing essential information such as carrier details, tracking number, product SKUs, quantities, and delivery dates.
- Incorrect ASN details can lead to inventory mismatches.
- Delays in order processing and fulfillment.
- Increased risk of chargebacks.
How to Avoid It:
Ensure that the ASN matches the actual shipment contents, including tracking information, to prevent chargeback penalties.
Carton Content Accuracy
What It Is:
Carton Content Accuracy ensures that the physical contents of a shipment match the details provided in the ASN.
Impact of Non-Compliance:
- Incorrect items can lead to fulfillment errors.
- Delays in warehouse processing.
- Risk of receiving chargeback fees.
How to Avoid It:
Carefully verify that each carton contains the exact items specified in the shipment details before sending to Amazon.
Carton Information Compliance
What It Is:
This chargeback occurs when vendors fail to meet Amazon’s packaging and labeling requirements, including proper barcodes and content identification.
Impact of Non-Compliance:
- Difficulty in tracking and identifying shipments.
- Potential shipment rejections or delays.
- Chargeback penalties.
How to Avoid It:
Ensure all cartons are labeled with scannable barcodes and match Amazon’s shipping and packing specifications.
Import Documents Late Delivery
What It Is:
Amazon requires vendors to submit import documents, such as commercial invoices, packing lists, and certificates of origin, on time.
Impact of Non-Compliance:
- Delayed customs clearance.
- Increased storage costs.
- Late delivery penalties.
How to Avoid It:
Submit accurate and complete import documents within Amazon’s required timeframe.
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Import PO On-Time Non-Compliance
What It Is:
Impact of Non-Compliance:
- Inventory shortages and supply chain disruptions.
- Late deliveries affect Amazon’s operational efficiency.
How to Avoid It:
Monitor delivery schedules and coordinate shipments to ensure they meet Amazon’s deadlines.
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Import Shipment Late Booking
What It Is:
Amazon requires vendors to book shipments within a specified timeframe to ensure smooth logistics.
Impact of Non-Compliance:
- Shipment delays can affect inventory levels.
- Late arrivals impact customer satisfaction.
How to Avoid It:
Adhere to Amazon’s booking deadlines and schedule shipments proactively.
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No Show
What It Is:
A “No Show” chargeback occurs when a vendor fails to deliver a scheduled shipment on the confirmed date.
Impact of Non-Compliance:
- Disrupts Amazon’s fulfillment operations.
- Delays in inventory processing.
How to Avoid It:
Ensure accurate booking, timely transportation, and strict adherence to scheduled delivery windows.
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PO On-Time Accuracy
What It Is:
Amazon expects sellers to fulfill orders exactly as specified in the Purchase Order (PO).
Impact of Non-Compliance:
- Incorrect deliveries lead to supply chain disruptions.
- Chargeback penalties for mismatched quantities or delivery delays.
How to Avoid It:
Review PO details carefully and confirm exact quantities before shipment.
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Oversized Carto
What It Is:
Amazon enforces strict carton size limits to optimize storage and handling.
Impact of Non-Compliance:
- Oversized cartons require additional storage and handling.
- May cause inefficiencies in Amazon’s fulfillment centers.
How to Avoid It:
Ensure all cartons meet Amazon’s specified size dimensions before shipping.
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Overage PO Units
What It Is:
Vendors sending more units than specified in the PO can receive chargebacks.
Impact of Non-Compliance:
- Causes inventory planning issues for Amazon.
- May result in overstock at fulfillment centers.
How to Avoid It:
Only ship the exact quantity specified in the PO.
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Overweight Carton
What It Is:
Cartons exceeding Amazon’s weight limits result in chargebacks.
Impact of Non-Compliance:
- Increased handling and transportation costs.
- Potential safety risks for warehouse workers.
How to Avoid It:
Weigh cartons before shipping and ensure compliance with Amazon’s weight restrictions.
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Paper Invoice
What It Is:
Amazon prefers electronic invoices over paper invoices.
Impact of Non-Compliance:
- Slows down invoice processing.
- Increases manual workload for Amazon.
How to Avoid It:
Submit invoices electronically through Amazon’s preferred channels.
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Prep Issues
What It Is:
Products must be properly prepared, labeled, and packaged before shipment.
Impact of Non-Compliance:
- Increases product damage risk during transit.
- Can result in customer complaints and returns.
How to Avoid It:
Follow Amazon’s product preparation guidelines to ensure compliance.
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Rejected Delivery
What It Is:
Amazon may reject shipments that do not meet quality or compliance standards.
Impact of Non-Compliance:
- Shipment delays and additional costs.
- Chargeback penalties for vendors.
How to Avoid It:
Ensure shipments meet Amazon’s quality, labeling, and packaging standards.
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Ships In Own Container
What It Is:
Vendors using their own containers instead of Amazon’s preferred shipping methods may receive chargebacks.
Impact of Non-Compliance:
- Requires special handling, increasing Amazon’s costs.
- May cause logistical inefficiencies.
How to Avoid It:
Use Amazon’s designated shipping methods to prevent unnecessary fees.
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5 Most Common Amazon Chargebacks and How They Occur
Chargebacks on Amazon can result from multiple issues, such as incorrect labeling, shipment mismatches, or delivery delays. Understanding these chargebacks can help vendors minimize financial losses and improve performance. Below are the five most common chargebacks, along with examples of how they happen.
1. PO On Time Accuracy
1.1 NotOnTime
- ssue: Vendors miss the shipping window by requesting a Freight Ready Date (FRD) or a first delivery date (CRDD) beyond the allowed time frame.
- Example: A vendor ships an order three days late or delivers too early, disrupting Amazon’s inventory planning.
1.2 NotFilled
- Issue: The vendor does not send the full quantity of items confirmed in the Purchase Order (PO).
- Example: A vendor confirms 1,000 units but ships only 850, leading to an incomplete order and a chargeback.
2. ASN Accuracy
Advance Shipment Notification (ASN) must match the actual shipment. Errors in ASN can lead to chargebacks.
2.1 On-Time Non-Compliance (ONTC)
- Issue: The required ASN is not submitted before the shipment reaches Amazon’s Fulfillment Center (FC).
- Example: A vendor ships products without submitting the ASN, triggering a chargeback.
2.2 Unit Count Mismatch
- Issue: The number of units declared in the ASN does not match the shipment.
- Example: The ASN states 500 units, but only 450 arrive, leading to a chargeback.
2.3 Invalid/Missing ARN
- Issue: Vendors using We-Pay or Collect shipping fail to provide a valid Amazon Reference Number (ARN).
- Example: A vendor submits an incorrect ARN, causing delays and chargebacks.
2.4 Missing Expiration Date
- Issue: Products requiring expiration dates are shipped without this information in the ASN.
- Example: A vendor ships perishable goods without listing expiration dates, resulting in a chargeback.
2.5 PRO/BOL Mismatch
- Issue: Incorrect PRO (Pro Number) or BOL (Bill of Lading) details are provided.
- Example: A vendor submits a BOL in the ASN that does not match the one used by the carrier.
3. Carton Content Accuracy
Errors in carton contents compared to ASN records can lead to chargebacks.
3.1 Shortage
- Issue: Fewer units in the carton than what was listed in the ASN.
- Example: The ASN indicates 20 units, but only 18 arrive at the fulfillment center.
3.2 Unexpected Item Overage (UIO)
- Issue: Extra items not listed in the ASN are found in the carton.
- Example: The ASN states 10 units, but the carton contains 13 units, causing a chargeback.
3.3 Unexpected Quantity Overage (UQO)
- Issue: More units of an expected item are found in the carton.
- Example: The ASN lists 2 units, but 5 are received, resulting in a chargeback.
3.4 Case Pack Defect
- Issue: Inner or master packs do not match the ASN.
- Example: The ASN states 12 individual units, but the carton contains 6 packs with 2 units each.
4. No Carton Content Label (No CCL)
Amazon requires each carton to have an appropriate label.
4.1 No Valid License Plate (LP) Label
- Issue: The LP label is missing, unreadable, or misplaced.
- Example: The label is placed over a seam, making it unscannable.
4.2 LP Label Not on ASN
- Issue: The LP label is missing from the ASN.
- Example: The vendor submits an ASN without LP label data.
4.3 SSCC Not Uploaded
- Issue: Vendors fail to upload the Serialized Ship Container Code (SSCC) within five days.
- Example: A vendor misses the SSCC deadline, causing a chargeback.
4.4 GTIN-14 Gold List Missing
- Issue: The GTIN-14 barcode is not registered in Amazon’s system.
- Example: A vendor ships a carton with an unregistered GTIN-14 barcode.
5. Non-Compliant Barcodes
Each product must have a scannable barcode for accurate processing.
5.1 Missing or Unreadable Barcode
- Issue: The product is missing a barcode or has an unscannable barcode.
- Example: A vendor ships products without barcodes, preventing Amazon from processing them.
How to Dispute Amazon Chargebacks
If you receive a chargeback notification, you can dispute it by providing supporting documents, such as:
- Purchase Orders (POs)
- Shipping documents
- Proof of delivery
- Product images
- Customer communication
Disputes must be filed within 30 days. The resolution process typically takes up to 90 days.
How to Avoid Chargeback Fees
To prevent chargebacks, vendors should:
- Confirm Purchase Orders Promptly – Ensure smooth transactions.
- Ship On Time – Work with reliable couriers and maintain buffer time.
- Label Items Correctly – Avoid mislabeling or missing barcodes.
- Follow Amazon’s Packaging Guidelines – Prevent damage during transit.
- Monitor Vendor Central Performance – Identify and resolve potential issues early.
Amazon Chargeback Fees Overview
Here is a breakdown of common chargeback costs:
Chargeback Type
Chargeback Cost
ASN Accuracy
2-6% of COGS
Carton Content Accuracy
$2.6 per unit
Import PO On-Time Non-Compliance
3% of COGS
No Show
$50-$250
PO On-Time Accuracy
3-10% of COGS
Oversized Carton
$25 per box
Prep Issues
$0.63-$1.26 per unit
Rejected Delivery
3% of COGS
The Hidden Costs of Chargebacks Chargebacks are more than just financial penalties; they erode sales and customer satisfaction.
Case Study: TechCorp’s Chargeback Challenge TechCorp, a tech company, experienced a surge in chargebacks due to late shipments. While financial penalties were concerning, the bigger impact was on their brand reputation. Late deliveries led to customer frustration, negative reviews, and a decline in trust. To resolve this, TechCorp streamlined its logistics, improved inventory management, and enhanced carrier communication. These steps reduced late shipments and restored their reputation as a reliable seller.
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How to Avoid Amazon Vendor Chargebacks? A Step-by-Step Guide
To prevent chargebacks, follow these essential steps:
- Confirm Purchase Orders Promptly – Ensure quick PO confirmation for smooth transactions.
- Ensure On-Time Shipment – Partner with reliable couriers and maintain buffer time.
- Correctly Label Items – Invest in quality control to prevent errors and misroutes.
- Package Items Properly – Follow Amazon's packaging guidelines to avoid damages.
- Maintain Sufficient Inventory – Avoid stockouts to ensure timely fulfillment of POs.
How to Read and Interpret Chargeback Status Types
Amazon provides different chargeback status types:
- Waived - Notification Only – No action required; Amazon won’t pursue the chargeback.
- Reversed – Chargeback was applied but later canceled, with a refund in the next billing cycle.
- Charged – Chargeback was successful; payment is required.
- Grace Waived - Notification Only – One-time exception, but future violations may lead to charges.
- Dispute Approved – Chargeback challenge was successful; no payment required.
- Dispute Denied – Challenge unsuccessful; chargeback fee remains.
- Grace Period - Notification Only – Fixable without immediate payment, but future issues may incur charges.
- Dispute in Review – Amazon is evaluating the dispute.
- Pending Invoice – Chargeback is pending; invoice to be issued later.
- Need More Information – Amazon requires additional details to process the chargeback or dispute.
How to Dispute Erroneous Amazon Chargebacks Successfully
If you believe a chargeback is unjustified, follow these steps to dispute it effectively:
- Access Vendor Central – Log in to your Amazon Vendor Central account.
- Navigate to Reports – Click on the "Reports" tab.
- Select Operational Performance – Choose "Operational Performance" from the dropdown.
- View Defect List – Click the "View defect list" button.
- Locate Chargeback – Find the chargeback you want to dispute.
- Click Dispute – Select the "Dispute" button.
- Attach Relevant Documents – Provide supporting evidence for your claim.
- Submit the Dispute – File within 30 days of the chargeback appearing in Vendor Central.
Essential Documentation for Disputing Chargebacks
To strengthen your dispute, provide the following documents:
- Purchase Order (PO)
- Shipping Documents
- Proof of Delivery
- Product Images
- Customer Communication Records
- Internal Investigation Reports
Best Practices to Avoid Amazon Chargeback Fees
- Maintain Accurate Documentation – Keep purchase orders, shipping documents, proof of delivery, and product images.
- Monitor Vendor Central Performance Metrics – Regularly track order defect rate, late shipment rate, and customer returns.
How to Recover Amazon Vendor Chargebacks and Shortages Efficiently
If you’ve incurred chargeback fees, follow these steps to recover your funds:
- Track All Shipment Details – Keep BOLs, NDAs, photos, and shipment documents.
- Seek Refunds for Past Fees – You may recover up to five years of unjustified chargeback fees.
Chargeback Recovery Services – How sellsrank Can Help
sellsrank’s Amazon Vendor Chargeback Recovery service helps recover lost profits by:
- Auditing Accounting Data – Analyzing up to five years’ worth of financial data to detect errors.
- Dispute Management – Helping vendors recover unwarranted deductions.
- Automating Financial Operations – Reducing resource allocation to just 0.25 FTE.
- Financial Planning – Utilizing AI-driven insights for smarter decision-making.
- No Upfront Costs – Service is based on a percentage of recovered funds.
If you’ve been hit with Amazon Vendor Chargeback fees, contact sellsrank for a free audit!
Final Thoughts
Amazon chargeback fees can be frustrating, but understanding and addressing them proactively can significantly reduce their impact. If you receive a chargeback, treat it as an opportunity to refine your processes and improve efficiency. By focusing on compliance, you can minimize unnecessary fees and enhance your business performance.
Amazon Vendor Chargeback Fees - Frequently Asked Questions
How do I recover Amazon vendor chargeback fees?
Conduct an audit to verify all chargebacks. Dispute unjustified fees within the designated timeframe.
Can Amazon issue refunds for chargebacks?
Generally, no. However, disputed chargebacks with valid documentation may be reversed.
What are common types of Amazon Vendor Chargeback Fees?
The cost of full account management varies depending on factors like the number of products and categories. Typically, businesses invest $3,500+ per month for a comprehensive Amazon account management package.
What is the Biggest Benefit of Using an Amazon Full Account Management Service?
ate shipments, incorrect product preparation, mismatched quantities, improper labeling, and inaccurate ASNs.
How can I dispute chargebacks through Amazon?
Log in to Vendor Central, navigate to the chargeback details, and submit a dispute with supporting documents.