Every eCommerce seller knows how frustrating it is to see unexpected deductions from Amazon payouts. You do everything by the book, but profits still drop because of mysterious fees called โchargebacks.โ These fees are more than small inconveniences, as they can quietly reduce your margins and disturb your cash flow. In fact, up to 5% of your annual revenue can slip away unnoticed through chargebacks, shipment errors, labeling mistakes, and more.
If youโre selling on Amazon Vendor Central or Seller Central, understanding Amazon chargebacks is essential. It can be the difference between growing profitably and always facing hidden costs. This guide explains what Amazon compliance chargebacks are, why they happen, and, most importantly, how you can avoid them. Also, youโll see how SalesDuo makes this easier for brands.
What is a Chargeback on Amazon? Definitions and Key Concepts
A chargeback on Amazon happens when a customer disputes a transaction through their bank. This is also called a charge dispute and can be caused by unrecognized orders, unauthorized purchases, or issues with the product. When a chargeback is filed, Amazon temporarily credits the customer while it checks the claim.
For sellers, this means some funds are held back, and youโll be asked to provide evidence for your side. If the bank decides in the customerโs favor, the deduction becomes permanent. Learn more about how chargebacks work on Amazon.
Difference Between Compliance Chargebacks and Customer Chargebacks
Amazon compliance chargebacks are penalties for not following Amazonโs requirements, such as late shipments, wrong labels, or packaging mistakes. These are applied by Amazon for operational errors, not by buyers. Customer chargebacks, on the other hand, happen when buyers file a dispute with their bank, usually for reasons like fraud or dissatisfaction.
While compliance chargebacks are about following Amazonโs processes, customer chargebacks are related to payment disputes. Both can hurt your profits, but compliance chargebacks can be prevented with the right procedures. For more about compliance chargebacks, see the Amazon Seller Forums.
Understanding Amazon Chargeback Categories
Amazon chargebacks can be grouped into several categories, each tied to specific processes or requirements. Some of the main categories include:
- Purchase Order (PO) Problems: These involve issues with order confirmation, shipping on time, or sending more stock than Amazon requested.
- Advanced Shipment Notification (ASN) Issues: These occur when there are mistakes or delays in shipment data.
- Preparation and Packaging Problems: This covers non-compliance with Amazonโs rules for packaging or preparing products.
- Transportation and Receive Process Problems: Errors can happen during shipping or at Amazonโs fulfillment centers.
- Direct Fulfillment and Seller-Related Chargebacks: These are penalties for things like canceling orders or shipping using the wrong method.
Each of these categories has its own triggers and financial consequences, so it helps to know which areas need your attention. For details on compliance issues, visit the Amazon Seller Forums.
Purchase Order (PO) Problems: Common Compliance Triggers
PO problems are a leading cause of Amazon compliance chargebacks. They happen when vendors donโt confirm orders, ship late, or deliver the wrong quantities. Even small errors here can affect payouts and account health.
To prevent PO-related chargebacks, make sure you have the right inventory before accepting orders and follow Amazonโs shipping requirements. For more on managing Amazon chargebacks, visit Amazonโs official chargeback guide. If you need advanced help, SalesDuo provides full Amazon account management to keep your business compliant.
Advanced Shipment Notification (ASN) Issues: Avoiding Costly Errors
ASN issues are another leading reason for Amazon compliance chargebacks. These can occur when shipment data is missing, late, or wrong, which can lead to penalties and delays. Even one error in your ASN can cost you money and inventory.
To stop ASN-related chargebacks, always double-check shipment details before sending and consider using automated tools. Missing or incorrect returns can also be a profit drain, especially for high-volume sellers. Learn how to avoid profit loss from missing returns on Amazon.
Preparation and Packaging Problems: Meeting Amazon Standards
Getting packaging compliance right is important to avoid Amazon chargebacks. Mistakes here include incorrect bagging, missing labels, or using the wrong packaging. Amazon requires all products and packaging to follow strict rules, or you could face financial penalties or further action.
To remain compliant, use Amazonโs packaging guidelines and prepare a checklist for every shipment. For expert support, SalesDuo provides Amazon Listing Optimization and packaging compliance advice.
Transportation and Receive Process Problems: Managing Inbound Accuracy
Issues with shipping and receiving can cause Amazon chargebacks. Delays, missing documents, or incorrectly labeled boxes are common mistakes. These usually occur either during shipping or when products reach Amazonโs warehouses, leading to deductions and inventory delays.
To avoid these risks, always enter the correct shipping dates, use trusted carriers, and check your paperwork twice. For a guide on handling chargebacks and improving shipping, see How to manage Amazon chargebacks. For more support, SalesDuo offers Amazon Full Account Management services.
Direct Fulfillment and Seller-Related Chargebacks
Direct fulfillment chargebacks can result from canceling orders, shipping late, or using the wrong shipping method. These problems can quickly increase your Order Defect Rate (ODR). Amazon expects the ODR to stay under 1%. If you go above that, you may get warnings or even an account suspension.
Keep a close watch on your ODR and fix fulfillment issues as soon as you see them. For advanced support, SalesDuo offers strategies to help you stay compliant.
Most Common Amazon Chargeback Examples and Their Causes
PO On-Time Accuracy
PO on-time accuracy chargebacks happen when shipments show up late or outside the required timeframe. Amazon expects sellers to achieve at least a 90% on-time delivery rate for Fulfilled by Merchant orders. Missing this target triggers chargebacks and can harm your account health. Staying organized with your delivery dates is the best way to avoid these penalties.
ASN Accuracy and Labeling Issues
Chargebacks can be triggered if the shipment data in your ASN doesnโt match what Amazon gets. Mistakes include incorrect unit counts, missing labels, or late ASN submissions. Even one error can cause chargebacks and inventory delays.
To stop this, always verify your ASN details and use Amazonโs Manage Returns tool for tracking and resolving problems. For automation, SalesDuo offers EDI integration and chargeback management tools.
Carton Content Accuracy and Barcode Compliance
Chargebacks for carton content accuracy happen when shipment items donโt match the ASN or packing list. Barcode compliance chargebacks happen if products have missing or unscannable barcodes. These mistakes can hold up your inventory and reduce sales.
To avoid them, use Amazonโs barcode and carton labeling rules, and check every shipment thoroughly. For help, SalesDuo provides Amazon Listing Optimization and compliance services.
No Carton Content Label and Frustration-Free Packaging
Not having carton content labels, or using unreadable labels, can trigger chargebacks and delays. Amazonโs Frustration-Free Packaging program also comes with strict rules. Not following them can mean penalties or having your inventory rejected.
To prevent these problems, use Amazonโs Manage Returns tool to track every shipment and make sure cartons are labeled the right way. For help with packaging, SalesDuo can support you in meeting Amazonโs standards.
The Real Cost and Business Impact of Amazon Chargebacks
Chargeback Costs, Deductions, and Margin Impact
Amazon chargebacks can reduce your profits by as much as 1% to 5% of your total invoice value. These deductions add up fast, especially if you sell a lot and do not track or dispute fees regularly. Missing these costs can easily turn a good month into a loss.
For more on managing chargebacks and cost allocation, see How to Implement an Effective Chargeback Strategy. For dedicated support, SalesDuo provides Amazon chargeback management and recovery services.
Chargebacks in Q4: Key Risks During Peak Season
Chargebacks often rise in Q4 when order volumes increase and mistakes are more likely. Even small compliance errors can create a chain of deductions, threatening your peak season profits. Staying alert and acting quickly is the best defense in these busy periods.
For specialized strategies, SalesDuo helps brands optimize operations and reduce chargebacks during busy times of the year.
Case Studies: Real-Life Chargeback Recovery and Savings
Winning a chargeback dispute on Amazon may take 90 days or longer, but you can recover fees if you have the right support and records. Sellers with an Order Defect Rate below 1% are 70% more likely to win the Buy Box and maintain strong profits.
Brands that invest in proactive chargeback management and expert help can reclaim thousands in lost revenue each year. Want to scale your business? Book a 1:1 growth call with an account manager today!
Amazon Chargeback Prevention: Best Practices and Tools
Staying Compliant: Shipping, Packaging, and Operational Tips
Avoiding Amazon chargebacks starts with detailed product listings, correct shipment information, and strong packaging. Good packaging prevents damage, sets buyer expectations, and analyzing return trends helps prevent future problems. Amazon recommends using the Manage Returns tool, and regular staff training on compliance can go a long way.
For more tips, see Amazon Shortage Claims and Chargebacks and Amazon SEO Services.
Leveraging Tools and Partners for Chargeback Management
Controlling Amazon chargebacks is easier with the right systems and partners. Using automated reports, EDI integrations, and real-time alerts can help you spot problems before they become expensive. Working with a full-service agency like SalesDuo means youโll benefit from former Amazon experts, custom dashboards, and help for every step of the chargeback management process.
To learn more about building your Amazon business, see Amazon Advertising Agency and check out the Advertising Benchmark.
Conclusion: Take Charge of Your Amazon Chargebacks
As Amazon continues to change, brands need real results, not just more visibility. At SalesDuo, we use data, smart strategy, creative ideas, and advanced AI technology to help eCommerce brands grow. Our full-stack team is made up of 85% former Amazon professionals, and our tools have helped more than 250 global brands make Amazon their main sales channel. Want to do the same? Book your 1:1 growth call today!
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About the Author
Meet Nandita Nair, an Associate Content Writer at SalesDuo, passionate about creating impactful content that helps Amazon businesses grow and thrive. When sheโs not writing, she finds joy in listening to music, exploring art, and getting lost in the world of novels.
