How to deal with chargebacks and shortages on Amazon?

April 20, 2022

Knowing how to drive efficiencies in your supply chain and finances is key to maintaining
profitability on Amazon. 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?

If you have been trading with Amazon for some time, you will likely have built up a balance of
financial deductions through chargebacks and shortages. Automated systems on Amazon’s
end often cause unnecessary and sometimes even overestimated deductions on your
account that are difficult to gain clarity on and can be a blocker to the long-term
sustainability of your business.

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

The problem

Amazon’s strict requirements in supply chain management means that failure to comply
with these requirements can be costly to your profit margins. For brands, the problem lies in
the difficulty in 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 are 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 focussed on.

What can you do to dispute these claims?

Thankfully, brands can recover most chargebacks and shortages claims through a dispute
process. However, the process can often be tedious and involves you presenting precise
data in specific ways to meet Amazon’s requirements. Leveraging a professional reclaim
service to take care of these disputes enables your team to focus on their core
responsibilities and free them from 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 a significant chargeback values recover payments and have worked alongside
internal teams to identify the main causes of incorrect charges through our unique reporting
tools. From consultancy through to team training and outsourcing, our approach to
operational excellence is flexible based on your current capabilities, expertise, and business

How to deal with Chargebacks and Shortages on Amazon?

Zoe Cantley-Wright, Head of Operational Excellence

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