Managing Amazon vendor chargebacks can quickly become overwhelming with over 40 different chargeback types across 7 categories. Our interactive Chargeback Navigator can simplify things by allowing you to browse all chargeback categories and types, understand their causes and prevention methods, pin high-priority issues, make notes, and share insights with your team.
Chargeback Navigator
Use this free interactive tool to understand, prioritize, and action your chargebacks.
The Scale of Vendor Chargebacks
Amazon vendor chargebacks are more than just fees—they represent critical feedback about operational inefficiencies that directly impact your profitability. Based on auditing $10 billion in Amazon Vendor Central revenue, chargebacks typically cost vendors between 1-5% of their invoice value throughout the year, but this percentage can significantly increase during Q4.
“When looking into Q1 through Q3, the average fee percentage was around 1.5%… however, when we looked into Q4 specifically, that percentage costs vendors around 4%“
~Shelby Owens, Strategic GTM Lead for Amazon at Carbon6.
This seasonal spike can severely impact profitability during what should be your most profitable selling period.
Other key data revealed some alarming statistics about Q4 specifically:
- Accruals (over-billings) increase by approximately 40%
- Shortages increase by a dramatic 72%
- Chargebacks increase by around 39%
The Six Main Categories of Amazon Chargebacks
Amazon categorizes chargebacks into six main areas (40+ types and subtypes), each representing different stages of the vendor-Amazon relationship:
- Problems with Purchase Orders (POs): Including PO on-time accuracy, unconfirmed PO units, and overage PO units.
- Problems with Advanced Shipment Notification (ASN): Including ASN accuracy issues like on-time non-compliance and missing information.
- Problems with Preparation: Including bagging, bubble wrap, cap seal, and set creation.
- Problems with Packaging: Such as Ships in Product Packaging (SIPP) certification issues.
- Problems with Transportation: Including pickup accuracy and no-show chargebacks.
- Problems with Receive Process: No carton content label, carton content accuracy, and oversized/overweight carton.
Common Chargeback Types
PO On-Time Accuracy Chargebacks
One of the most common and costly chargebacks is the PO On-Time Accuracy chargeback. This occurs when confirmed products don’t arrive within the specified purchase order window or when confirmed units are reduced after the allowable timeframe.
This chargeback comes in three subtypes:
- Not on time: 3% of product cost for units arriving outside the ship/delivery window
- Down-confirmed: 3% of product cost for reducing confirmed units after 5 days into the ship/delivery window
- Not filled: 10% of product cost for shipments automatically canceled due to non-delivery
What makes this chargeback especially impactful is its correlation with other fees.
“Over 65% of chargeback types and subtypes create a risk that a shortage claim can occur. So you’re not only getting hit at the chargeback level, but it can also ding you in other ways via these shortage claims”
~Samantha Welch, Director of Recovery and Operations at Carbon6.
ASN Accuracy Chargebacks
Another significant chargeback category is Advance Shipment Notification Accuracy. These chargebacks occur when required information in your ASN is missing or inaccurate, or when Amazon doesn’t receive an ASN before your shipment arrives.
The fee for this chargeback can range from 1% to 6% of product cost, depending on your compliance rate and the specific subtype. For example, missing expiration dates on consumable items face higher penalties (6% for compliance rates below 70%) compared to non-consumables (5% for the same compliance rate).
Real-World Impact
The real-world impact of these chargebacks was demonstrated with Farouk Systems . Carbon6 helped the company recover $1 million in just eight months. Alexis Thanasoulas, President of Business Development at Farouk Systems, mentioned how they were “losing profits and struggling to see positive results from their recoveries due to a knowledge deficit around Amazon’s ever-changing processes.“
Similarly, a CPG brand showed how a comprehensive approach to fee management yielded $2 million in reclaimed revenue through a combination of historical recovery, ongoing disputing, and root cause analysis. Most impressively, this was achieved while the brand simultaneously grew by 8.5%.
This CPG case demonstrated how targeted root cause analysis led to a 30% reduction in future fees by addressing just the two most common and costly chargeback offenders. This shows the power of systematically analyzing and addressing your most impactful chargeback types.
Prevention Strategies
- Stay compliant: Ensure you’re following Amazon’s guidelines for shipping, labeling, and packaging.
- Maintain accurate inventory: Confirm PO units based on actual inventory availability.
- Meet delivery windows: For collect shipments, submit routing requests with freight-ready dates within the ship window; for prepaid shipments, ensure carrier appointments are within the delivery window.
- Track performance: Regularly monitor the Operational Performance dashboard to identify potential issues before they escalate.
- Prepare for Q4: Q4 requires special attention as both sales volume and chargeback rates increase significantly during this period.
- Explore Carbon6 Revenue Recovery: Recover lost revenue from Amazon and Walmart—fast. Carbon6 helps vendors and suppliers recover profits through expert deduction and chargeback management.
Using the Chargeback Navigator for Planning
The Chargeback Navigator can be particularly valuable for strategic planning around peak selling periods like Q4. By identifying your most frequent and costly chargeback types, you can implement targeted process improvements before entering high-volume periods.
“Anything you can do to reduce those risks and maximize your profitability, those are going to be key as you enter the holiday season and continue through the holiday season.”
~Samantha Welch, Director of Recovery and Operations at Carbon6.
Proactive chargeback management is no longer optional for successful Amazon vendors—it’s essential for maintaining healthy profit margins and sustainable growth on the platform.
Recover lost revenue from Amazon and Walmart—fast. Carbon6 Revenue Recovery helps ensure you reclaim every dollar you’re owed for invalid deductions—shortages, accruals, and chargebacks—across both platforms.
