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When it comes to the Amazon sales platform, sellers must not only focus on selling their products, but also on complying with the platform guidelines and conditions. If sellers violate any of these conditions, this can lead to compensation payments or chargebacks.

What are Amazon chargeback payments? How should you deal with a chargeback procedure and how can Amazon merchants provide the right information in a chargeback case?

We explain all this and more in this article.

What are Amazon compensation payments?

Amazon is the world's largest online marketplace. Amazon has a large number of business relationships with numerous suppliers and retailers. Amazon receives several thousand deliveries every day. Who Become an Amazon Vendor now has to follow the strict specifications from Amazon keep. This is the only way to ensure a smooth process and a flawless business relationship with the shipping giants.

Amazon expects its suppliers to comply with the Amazon Supplier Manual follow and adhere to the stipulated requirements and regulations. For example, vendors are obliged to send a pre-shipment notification before each individual order and, of course, to deliver the goods on time. If Amazon vendors violate these requirements, the so-called compensation payments come into play.

The Amazon compensation payments or chargebacks are Deductions from paymentswhich are imposed by Amazon when vendors have violated the platform's terms and conditions. This type of penalty payment reduces the vendors' profits.

As a rule, these payments are made automatically by Amazon without the seller being informed separately.

The purpose of the compensation payments is in particular to Buyer protection be, so that financial losses or unsatisfactory experiences on the platform are avoided.

Types of compensation payments

For sellers participating in Amazon's Vendor Central program, there are specific types of compensation payments known as Vendor chargebacks are labeled. These can be caused by a number of violations of Amazon's terms and requirements.

Amazon vendor chargebacks arise, for example, in the event of defective orders, transportation problems or problems with shipping preparation.

Below we explain the various reasons for different types of compensation payments.

Delayed transmission of import documents

If you import goods by sea freight and send them to Amazon, you must send all import documents such as commercial documents and goods invoices to Amazon by the ship's departure date. Amazon service provider Century Distribution System (CDS) send. In the case of air freight, the documents must be sent on the day of departure.

If these deadlines are not met, you will be penalized with compensation payments. For sea freight, the penalty fee is 50 Euro per document and day of delayfor air freight it is 150 euros per document and day of delay.

Delayed booking for import deliveries

Amazon expects sellers to make all bookings on time to ensure smooth delivery. If a seller does not book a delivery on time, this can lead to problems with the delivery.

If goods are imported and sent to Amazon, special lead times must be observed. For sea freight, at least 14 days before the expected provision date arrange a corresponding appointment with Amazon-CDS. For air freight, the appointment must be at least three days before can be booked.

If these deadlines are not met, Amazon cannot guarantee that the shipment will arrive on time. Furthermore, if the appointment is not booked on time, you will have to pay a Compensation payment to expect. This usually amounts to 3 percent of the total value of the goods.

Non-compliance with the delivery / shipping window

Amazon has clear guidelines for delivery and shipping windows that sellers must adhere to. If a delivery date has been booked, you will receive an order confirmation stating the delivery timeframe to be adhered to. Suppliers must adhere to this time window. If you do not adhere to the shipping window, you must also send a three percent Penalty payment perform.

Complications during shipping preparation

Amazon also expects its sellers to ensure that products are properly packaged and prepared for shipping. To ensure that items are adequately protected during transportation, they must be packaged appropriately.

If items are not secured in accordance with the requirements, certain chargebacks are also incurred.

A distinction is made here between the following compensation payments:

  • Foil bags: If an item must be packed in a plastic bag for shipping but was not packed in such a bag, Amazon will charge a compensation payment with the note "plastic bag". An example of this is liquid products or loose components that must be securely packaged in a special bag during transportation. In this case, the compensation payment amounts to 50 cents per unit.
  • Bubble wrap: If an item is made of ceramic, glass or tableware, it must be packed in bubble wrap. This is to ensure that the item is not damaged during transportation. If the item has not been properly packed, vendors must also pay compensation of 50 cents per unit calculate.
  • Wrap: If an item has not been adequately secured during shipping, a compensation payment may also be due here. This may be the case, for example, if lids are not sufficiently secured to prevent them from falling out during shipping. The corresponding penalty payment for non-compliance amounts to 40 cents per unit.
  • Barcode sticker: Barcode stickers must be visible and scannable on each item so that they can be assigned to the correct ASIN. This allows the barcode to be checked by a scan test before shipping. In this way, it can be ensured that the information is recorded correctly. Each unit should only have a single barcode, which may only be placed on one carton. If these requirements are not met, a compensation payment of 30 cents per unit be performed.
  • Cardboard: If the item has to be repacked or repackaged by Amazon, a penalty of 77 cents per unit due.

Shipment in original packaging (SIOC) & Frustration-free packaging (FFP)

Amazon has established two different programs to reduce the use of its own boxes: SIOC and FFP.

For example, vendors with the so-called SIOC program the option of designing their own packaging and sending it directly to their customers. This makes Amazon's work easier, as the company does not have to pack the items itself. In addition to the lower transport costs, another advantage of this program is that significantly less packaging is required.

With the FFP program the vendors' products are also sent directly to customers. However, an additional FFP certification is required for the packaging. This is a certification that the packaging is particularly easy to open and produces less waste. The FFP packaging is also produced from reusable materials, while the goods are still reliably protected from damage.

Since October 1, 2019, such FFP certification has been mandatory for particularly large and heavy products. This applies in particular to goods that exceed a size of 35.5 cm x 34.0 cm x 26.5 cm or a maximum weight of 12.3 kg.

If the products do not have a corresponding certification, vendors with a Penalty payment per incorrectly packaged ASIN to expect. This usually amounts to 1.70 euros.

How to: What is the correct way to handle an Amazon chargeback case?

The Prices for Amazon agencies are a large but worthwhile investment for vendors. So an Amazon chargeback payment can be a particularly unpleasant experience. However, there are some steps that can be taken if a customer has initiated a chargeback process for an Amazon order. Amazon vendors basically have two options for responding to an Amazon chargeback:

  1. In the event of a chargeback, the retailer can demand the immediate Refund of the credit card charge arrange for a refund. This procedure is particularly useful in cases where the situation is clear, for example if the goods have never reached the customer.
  2. Alternatively, the retailer can provide all the necessary Provide information for checking the chargeback procedure. These are then forwarded by Amazon to the credit card holder's bank.

It is important for retailers and vendors to know that, in the event of a chargeback procedure, they must comply with the Deadlines must be adhered to must.

If no deadlines have been specified, sellers should within eleven calendar days act. If you do not respond to an Amazon chargeback case, the customer's claim will usually be upheld in full.

How can retailers provide the necessary information?

To speed up the chargeback process, it is important that sellers provide all the necessary information in a timely manner. This may mean having proof such as invoices, delivery bills and confirmations from the shipping service providers ready and making them available on request.

Sellers should provide the following information as part of the chargeback process:

  • Product description
  • Shipping date
  • Transaction status
  • Shipping method (FBA, FBM etc.)
  • Tracking number
  • Further information about the product

The required information can be provided either via the Seller Central or via the Notification e-mail take place. All Amazon chargebacks can be found in Seller Central under "Performance".

It is also important that sellers record and retain any correspondence with the buyer and forward it to Amazon if necessary. The relevant information is then sent to the relevant bank so that a decision can be made on the legality of the transaction.

How long does it take to receive a chargeback response from Amazon?

The time it takes to process a chargeback can vary and depends on various factors, such as the complexity of the case and the availability of information. Both the customer and the seller must wait for the bank's decision. As a rule, it can take several weeks before a final decision is made. Experience shows that it takes up to 90 daysuntil a chargeback procedure has been fully completed.

During this time, it is important that sellers stay in contact with Amazon and provide all necessary information at short notice in order to close the case as quickly as possible. Should No response from Amazon If a chargeback is made, it is highly likely that no chargeback was made. If this is the case, the bank's decision can only be reversed in the rarest of cases.

What effects does a chargeback procedure have for retailers?

A chargeback procedure can have numerous negative effects for retailers. In addition to financial losses, it can also result in damage to a seller's reputation on Amazon. Among other things, this can affect the ranking of a product.

Whether a chargeback procedure actually has a negative impact on the merchant depends on the type of chargeback:

  • Is it a fraud-related chargeback or
  • Is this a service-related chargeback?

If the former is the case, this usually has no negative impact on the seller's reputationas these types of Amazon chargebacks are initiated in the event of a stolen credit card or similar.

However, if it is a service-related chargeback, the chargeback is treated by Amazon as a so-called Order shortage declared. This means that there was a defect or fault in the product, for which the seller is clearly responsible.

Too many chargebacks can lead to Amazon closing a seller's seller account. It is therefore important that sellers take measures to minimize the Reduce the probability of chargebacks and to handle them carefully in order to minimize their impact on the business.

FAQ - Amazon vendor chargebacks

What are Amazon seller chargebacks?

If brands do not comply with Amazon's shipping instructions, suppliers may issue chargebacks. This results in high costs, which can lead to potential loss of sales (out-of-stocks). In order to compensate for the lost resources and sales, corresponding deductions are made from payments.

How do I dispute a chargeback on Amazon Vendor Central?

To dispute a chargeback, sellers must provide the necessary information and evidence to convince the customer that the transaction was correct and legitimate. This may include, for example, a detailed description of the product and transaction, confirmation of shipping details and customer communication, and an explanation of the seller's return and refund policies.

Does Amazon respond to chargebacks?

Yes, Amazon responds to chargebacks and takes appropriate action to process the case. Amazon will notify the seller when a chargeback has been received and request that they take action within a certain period of time. If a seller does not respond to the request or is unable to provide the necessary information, this may result in a loss of payment.

What is a chargeback?

A chargeback is a process whereby a customer reverses a transaction with their bank by reporting a dispute or disagreement with the transaction. In such a case, the customer's bank can reverse the transaction and have the amount charged back by the seller's bank. The seller may then be asked to dispute the transaction and provide evidence.

Conclusion - Amazon vendor chargebacks

Amazon chargebacks are particularly important for buyer protection and compliance with Amazon's supplier guidelines. Violations of the relevant Amazon guidelines and requirements can lead to unpleasant compensation payments.

To avoid negative consequences such as chargeback procedures and financial losses, it is important as an Amazon seller or vendor to have the lowest possible chargeback rate and to comply with the Amazon supplier guidelines.

We from the Amazon agency AdsMasters can help you build a secure and lucrative Amazon business so that you can achieve long-term success on the world's largest online marketplace.

What types of Amazon vendor chargebacks are there?

There are different types of Amazon vendor chargebacks, including misdelivery chargebacks (for incorrectly delivered or damaged products), return chargebacks (for returned or undelivered products), non-compliance chargebacks (for breaches of contract agreements) and administrative chargebacks (for administrative fees and other administrative errors).

How are Amazon vendor chargebacks calculated?

The exact calculation of Amazon vendor chargebacks can be complex and depends on various factors. As a rule, chargebacks are calculated on the basis of a percentage deduction from the sales price or on the basis of fixed fees set out in the contract or the Amazon guidelines.

How can you avoid being affected by Amazon vendor chargebacks?

To be affected by Amazon vendor chargebacks, it is important to carefully follow Amazon's contract agreements and policies. These include proper packaging and delivery of products, adherence to quality standards, correct inventory management and timely processing of orders and returns.

Tobias Dziuba

My name is Tobias and I am the founder and managing director of the Amazon agency Adsmasters GmbH based in Düsseldorf.

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