How to deal with chargebacks and shortages on Amazon?

The key to maintaining profitability on Amazon is to drive efficiencies in your supply chain and finances. While you may have a strong grasp on your negotiated terms and costs, unexpected fees in the form of chargebacks and shortages are a common challenge Vendors face. In this blog, we delve into why chargebacks and shortages on Amazon are a problem and what you can do to recover these payments.

What are chargebacks and shortages on Amazon?

You will likely have accumulated a balance of financial deductions through chargebacks and shortages if you have traded with Amazon for some time. Amazon’s automated systems can cause unnecessary and sometimes even overestimated deductions on your account that are difficult to understand and can hinder your business’s long-term sustainability.

Chargebacks or non-compliance charges are a result of discrepancies across areas such as purchase orders, packaging, and shipping. Meanwhile, shortages occur when Amazon believes the quantity of stock received on purchase orders is less than what was confirmed or that has been invoiced for, leading to withheld payments.

The problem

Amazon’s strict requirements in supply chain management mean that failure to comply with these requirements can be costly to your profit margins. Brands face the problem of not knowing how many invoices are unpaid, and what each defect type is when it comes to the dispute process.

The impact of chargebacks and shortages is potentially even more significant in industries with tight margins, causing lost revenue in the purest form. Not only this, but the time, effort, and resources taken to reclaim this money all impact other work and projects your existing team should be focused on.

What can you do to dispute these claims?

Thankfully, brands can recover most chargebacks and shortages claims through a dispute process. The process can be tedious, however, and requires you to present precise data in specific ways to meet Amazon’s requirements. By using a professional reclaim service to handle these disputes, your team can focus on their core responsibilities and avoid having to log disputes with Amazon.

Molzi by Brainlabs’ team of supply chain experts have helped a number of global brands who’d built up significant chargeback values recover payments and have worked alongside internal teams to identify the main causes of incorrect charges through our unique reporting tools. Our operational excellence approach is flexible based on your current capabilities, expertise, and business objectives.