By Martin Heubel, Amazon Strategy Consultant at Consulterce
Does Amazon use chargebacks and other erroneous charges to improve its bottom line?
The short answer is no. There’s usually an underlying process defect that drives PPVs, PQVs, or penalty charges.
But there’s no denying:
- Difficult disputing processes
- Little support from Vendor Managers
- Long-winded dispute resolution timelines
Make it all seem easier for vendors to accept these fees as a cost of doing business rather than getting their money back.
Here’s the good news:
Getting your money back can be done in just 5 steps:
1. Understand the (real) root cause
Start by identifying the reason for these charges. And I don’t mean the obvious reason. Because most likely, it isn’t what you think.
For example, late delivery chargebacks often occur not because the vendor delivered the goods too late to its carrier. But because the carrier consolidated multiple orders in its own warehouse before shipping it to Amazon.
A good way to get to the root cause is to ask 5x Why. Don’t settle for the obvious response from your logistics or finance department.
2. Isolate erroneous charges (and fix the problem)
Next, make sure you isolate the erroneous charges. Some may be correctly applied to your account.
But for the ones where Amazon has got it wrong, consolidate the PO number, invoice ID, and any other evidence to back up your case.
Once you’ve understood the root cause, assign your teams to fix it, where possible.
3. Dispute erroneous charges in Vendor Central
Now that you know which charges have been applied in error on your account, it’s time to dispute them. You can raise dispute cases directly in Vendor Central.
Upload all the pictures, documents, and other evidence gathered in the previous step to make your case. Your dispute will either get approved or rejected by Amazon.
4. Escalate any unresolved disputes
For any rejected disputes, consolidate the case ID, invoice ID, and PO information in one Excel file. Send it to your Vendor Manager with the request for review within 14 business days.
VMs will often offer you a settlement contract of 50% of the total disputed amount. Just know that you can negotiate this percentage, and 50% is usually at the lower end.
I’ve seen brands getting 95% or even 100% of their money back. But when the amount goes into the millions, it’s a fight that you need to be prepared to have.
5. Rinse and repeat
Repeat steps 1-4 every month. Amazon sets strict requirements by when you need to file a dispute, so make sure you adhere to them.
While you can make a settlement part of your annual vendor negotiations, it’s often better to file the dispute right away. You can use the AVN to maximise your commercial leverage for any rejected amounts.
For further information and support, contact Martin Heubel here
