What is an Amazon Chargeback?
Amazon is hyper-focused on improving the efficiency of its operations process: sourcing products, getting products through fulfillment centers, and shipping to customers’ homes. Amazon chargebacks are a system of fines built around rigorous set-up requirements around packing, labeling, and delivery to hold suppliers accountable to these requirements.
However, with the scale of the fulfillment network, these fines can be applied in error. The burden of proof is on the supplier to provide information in the form of a dispute to reclaim those dollars from Amazon.
In the example below an item prep chargeback was applied to Harvest Group client, Nature Nate’s Honey Co. (Nate’s) because Amazon claimed that Nate’s had not prepped their caps appropriately which led to honey spillage. However, by working alongside the client’s team, Harvest Group’s Amazon team was able to show that Nate’s was prepping the heat seals and caps to Amazon’s requirements.
Why is this important?
Amazon chargebacks can add up quickly, in some cases, tens of thousands of dollars per month. They also eat into your profitability because these chargebacks are deducted from the total amount Amazon pays on invoices.
Without the dispute process you have no ability to get these dollars back. However, you can only dispute chargebacks twice through Amazon’s portal and many suppliers aren’t aware that you can continue to dispute through Amazon’s Vendor Support Case Management system.
Lastly, many times these Amazon chargebacks are valid and require the vendor to meet Amazon’s requirements through fixing POs and rejection rates, labeling, or a myriad of other operational errors. Harvest Group can provide insight into how to fix these problems for suppliers.
Client Background & Issue
Nature Nates Honey Co., a honey company based in McKinney, Texas, and a Harvest Group client, was receiving inaccurate chargebacks on item prep from Amazon.
Insights
Item prep chargebacks went from <5% to over 90% over a three-month period. Total charges amounted to $133k in lost revenue, or 5% of the product cost for those items.
The Process
Harvest Group identified the increasing charges and worked with the client’s warehouse team to collate proof of correct prep. Proof of correct prep was submitted to Amazon via disputes and then escalated via cases when the disputes were rejected. Overall, the team contested $133k operational fines.
Results
Harvest Group was able to assist Nature Nate’s Honey Co. in recovering over $132k through case management – 99% of the original Amazon chargebacks amount. By working with Harvest Group, Nate’s will continue to receive an ongoing analysis of operational support assistance in disputing additional chargebacks as Amazon creates them.
The Harvest Group Amazon team was built with functional experts who are ready and willing to advocate for our clients’ business. If you’re interested in learning more about working with Harvest Group, reach out to us at hello@harvestgroup.com or fill out our Contact Us form here.
