Amazon Compliance Chargebacks: A Vendor’s Guide

As an Amazon Vendor,  the number of Deductions from  Amazon can be troubling. Of all the various types of deductions, we will talk about Compliance Chargebacks in this article.

Not only is it one of the most common types of deduction issued by Amazon but it is also the most difficult to avoid. In this article, we will cover the following topics:

• What are Compliance Chargebacks?
• Types of Amazon Compliance Chargebacks and the reasons behind them.
• Navigating Compliance Chargebacks on Amazon Vendor Central
• Solution

What Are Compliance Chargebacks?

Upon accepting Amazon's invitation to Amazon Vendor Central, you are required to adhere to Vendor Regulations when shipping your products to Amazon.

In any instance where you fail to comply with any of the terms, you are issued a Compliance Chargeback by Amazon. 

Types Of Amazon Compliance Chargebacks And The Reasons Behind Them.

There are hundreds of Amazon Vendor Chargebacks issued for various reasons, I’ll brief you about the most common ones faced by the majority of Vendors.

• This is issued when you fail to notify Amazon about a shipment reaching earlier than expected.

2. Purchase Order [PO] Related Chargebacks:

• When dealing with purchase orders (POs), several factors are taken into account:
  1. Units Required: Meeting the specified quantity in the PO is essential.
  2. Time Accuracy: Confirming a PO in a timely manner is crucial. Failure to do so can result in a chargeback.
  3. Rejected PO Rate: Rejecting a PO for valid reasons is understandable, it's essential to keep this rate in check.
  4. Shipping Window: After confirming a PO, adhering to the specified shipping window is crucial. Shipping before or after the window without proper communication can lead to chargebacks – including shipping early.

• Failure to comply with any of these factors can result in Compliance Chargebacks.

• There are numerous instructions to follow when it comes to labeling and packaging. Often times even a slight negligence in these gets you a chargeback. Familiarize yourself with these common guidelines to ensure compliance:

1. 1. Adhering to Wrap Specifications: The protective wrapping utilized for the product must align precisely with the stipulated requirements. Matching the appropriate type of wrap with the product's characteristics is imperative to avoid chargebacks.
   2. Label Design Precision: The design of product labels should mirror the exact specifications provided. Any deviations from the prescribed design can result in chargebacks. Thoroughly review label design requirements to guarantee accurate replication.
   3. Compliance with SIOC Standards: In instances where the product is designated as Ship In Own Category (SIOC), meticulous compliance is essential. Ensuring that packaging and labeling adhere to SIOC standards is critical to sidestep potential chargebacks.

Here's how you can view Compliance Chargebacks on Amazon Vendor Central

• Reports > Operational Performance, click on “View All” (Upper Left Side)

How To Manage  Compliance Chargebacks

Precaution is better than cure! So as a Vendor, your aim should be to prevent these by proactive monitoring. But with an army of robots from Amazon these are inevitable. So you better find an effective cure.

Advanced data about all the deductions is the first step toward developing an effective prevention strategy. Once you have the data your aim should be to find the root cause of deductions. Here are the common preventive measures that businesses can take: 

• Regular Audits: Do regular checks to see if the SOPs are being followed by employees. Keep improving them regularly for better efficiency. Assigning dedicated personnel to conduct periodic checks has benefitted most suppliers.
  
  
• Stay updated on Policy Changes: Big retailers like Amazon and Walmart make changes to their vendor compliance policy. They can be related to anything from packing requirements to carton content labels. Subscribe to official communications from Amazon, participate in webinars or training sessions offered by the platform, and regularly check for updates on the Vendor Central portal. Suppliers should be aware of it and should quickly adapt to it to prevent any compliance chargeback fees.
  
  
• Monitor Performance Metrics: Continuously monitor key performance metrics related to compliance, such as ASN accuracy rates, PO acceptance rates, and chargeback frequency. By closely monitoring performance metrics, you can quickly identify areas of improvement and implement corrective actions.
  
  
• Regular Training: Conduct regular training sessions and educational workshops for your team members to make sure that they understand Amazon’s Compliance Guidelines. Provide detailed information on topics like ASN submission, PO management, and packaging requirements. By educating employees you can reduce the chances of compliance-related mistakes.
  
  
• Embrace Automation: Automated software can help suppliers with advanced data. That data can then be used for better root cause analysis. From a supplier’s point of view, it is really important to know where the chargebacks are coming from in the first place. Features such as an operational performance dashboard can really help in making the whole process centralized.
  
  
• Enhance Quality Control (QC): Implement strict QC checks throughout the supply chain. This can help you find any errors that might have occurred. By this, you can minimize the occurrence of Compliance Chargebacks.
  
  
• Streamline Communication:Make sure there is clear communication between your team and Amazon. This helps them being updated with any updates that Amazon has for its suppliers. 

• Robust Inventory Management System: Invest in advanced inventory management systems that can accurately track stock levels, shipment timelines, and order fulfillment processes.
  

Disputing Amazon chargebacks:

Normally disputes are manually raised against these Amazon Chargebacks to recover losses. Picture this: a relentless stream of disputes requiring manual document uploads on Amazon Vendor Central. Each claim consumes 15-20 valuable minutes. Now multiply that by thousands, and the magnitude of the task becomes dauntingly clear.

Well with technology everything can be made easier. Let me explain how!

Empower Your Chargeback Automation Operations With iNymbus

We at iNymbus have developed a Cloud Robotic Process Automation for disputing Amazon Deductions. This automated solution, tailored to seamlessly integrate with your system, doesn't just complete tasks – it accelerates them by an astounding 30X compared to human efforts.

Our Cloud RPA not only processes claims but it goes a step further and helps you prevent those deductions in the first place, by finding the root cause of it.

See how we helped this Large Book Distributor reduce Cost-per-Claim by a drastic 80-90%

• Struggling with Amazon chargebacks, a major book distributor implemented iNymbus' cloud robotic automation, reducing chargebacks to zero in 90 days. This solution saved time, resources, and allowed the distributor to focus on strategic initiatives. Monthly costs ranging from $0.40 to $0.70 per claim ensure timely resolution of Amazon claims. Explore the transformative solution in the iNymbus DeductionsXchange PDF.
  
  

Let us not only fight this battle for you but also win it, just like 200 other companies have done before.

Ready to transform your vendor operations? Take the first step:

📞 Schedule a brief consultation to witness firsthand how iNymbus Cloud RPA can revolutionize your approach.