Amazon Chargebacks: Insights & Data on Recovery Percentage

Dealing with chargebacks on Amazon can be a major headache for sellers. The process is complicated, and handling the high volume of claims can eat up a lot of time and money. This article will break down what sellers need to know about Amazon Chargebacks and shed light on the recovery percentage of each type.

We'll start by looking at common challenges, such as small chargebacks that add up to thousands of dollars, the need to upload proof for each item, and the surge in chargebacks after the holiday season. Next, we’ll share some important data on recovery rates. For instance, sellers can recover 83% of shortages because these are easier to prove with documents like inventory records and shipping proofs.

Finally, we’ll introduce an automated solution from iNymbus. This tool helps automate the chargeback process, making it faster and less manual.

Common Chargeback Challenges

• Penny chargebacks that add up to thousands of dollars
• High chargeback volume, sometimes thousands per month
• Uploading proof documentation required at the item level
• Navigating the complex retailer portal
• Chargeback dispute submissions taking 5-15 minutes each
• Post-holiday surge in chargeback volumes

How is Amazon so Good at Chargebacks?

• Amazon has become more automated and sophisticated, sending a constant flow of claims.
• Amazon is prompt and harsh with deductions and chargebacks.
• Volumes are high because Amazon accepts disputes only at a line item level. This increase in line item level work puts huge pressure on departments to get transactions sorted and resolved within Amazon’s window.
• Amazon requires specific matched paperwork to be submitted in order to dispute the chargebacks.
  

Common Reasons For Amazon Chargebacks

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Why Manual Resolution Process Is Time-Consuming

• It requires an average of 8 clicks in the Amazon portal to get to the deductions screens
• Another few clicks to start working on deductions
• Multiple data entries to submit the dispute
• If Amazon requires proof of delivery(POD) or a bill of lading(BOL) as evidence, then 4-5 more steps to retrieve these from the shipper or warehouse system
  
  

Amazon Chargeback Recovery Percentages

• Shortages (83% Recovery Rate):
  The dispute process for shortages is relatively straightforward, as vendors can easily prove the discrepancy with documentation like inventory records and shipping proofs. Historically, the clear documentation and simple dispute process may contribute up to 83% recovery rate.
  
  
• Chargebacks (62% Recovery Rate):
  Chargebacks have a lower recovery rate than shortages, but may contribute around 62% recovery which is still relatively high due to the complexity of compliance issues and the need for detailed documentation to dispute these types of claims.
  
  
• Pricing Disputes:
  The intricate nature of pricing rules and Amazon's stance on these disputes contribute to the extremely low recovery rate for pricing disputes.
  
  

For more information on Amazon Chargebacks, do check our whitepapers on Recovery Percentages and Amazon Vendor Returns.

How iNymbus Automation Works

Our automated deduction management software uses cutting-edge RPA technology to automate the process of disputing deductions. Here's a step-by-step breakdown:

Step 1: Our system automatically gathers all necessary claim documents, whether they are stored in a portal, communicated via EDI, or contained within emails.

Step 2: It then identifies newly issued chargebacks and categorizes them. The ones that are tagged as invalid are disputed on the vendor portal.

Step 3: Finally, it automates the dispute resolution process by uploading the organized claim documents to retailers and auto-filling required descriptions, making the entire process smooth and efficient.

Our deduction management software has helped businesses of all sizes and industries automate the process of disputing deductions. In addition to Amazon chargebacks, we also support medium-sized retailers like Lowes and Ulta, which most software in the market does not. This enables us to tackle deductions from over 25 retailers. Here is our in depth article on how to automate disputing deduction on Lowes Vendor Portal. Here are the results we have achieved for many of our clients.

Schedule a quick discovery call to explore automating deduction management and see if iNymbus is the right fit for your business.