Amazon Chargeback Guide for Merchants in 2024

As someone who has considered selling on Amazon, I researched their chargeback and dispute processes in depth. I want to share my findings to help you know what you’re in for when selling with them.

I’ll compare the different chargeback processes that merchants and suppliers will encounter. Once I provide that information, I’ll explain how to fight and prevent them.

Let’s dive in.

Key Takeaways

• The chargeback process will vary by bank or card network.
• Amazon charges a $20 fee to fight a chargeback dispute.
• A-to-Z claims are Amazon’s internal process for disputing transactions made with Amazon Pay.
• Merchants have 11 days to reply to chargebacks.
• Suppliers have a different set of rules and processes for chargebacks.

How Are Amazon Chargebacks Different?

• A-to-Z Claims: Disputes for eligible purchases made with Amazon Pay.
• Seller Chargebacks: Regular bank/card network chargebacks
• Vendor Central Chargebacks: Between Amazon and seller suppliers.

Amazon’s seller chargebacks (what we’ll call it) refer to typical chargebacks customers file with their banks. The process on how these will happen will vary by card network. Amazon will charge a $20 fee to represent you during that dispute.

Then there are A-to-Z claims, which is Amazon’s own dispute process for purchases made using Amazon Pay. These are escalations from buyer disputes between the seller and buyer.

And there are Vendor Central chargebacks. These only apply to suppliers and come with fees that vary by chargeback type.

I’ll talk about the processes of each chargeback in-depth. But I provided this information to help you know what’s relevant to read.

Summary: You’ll most likely encounter a Seller chargeback unless the transaction was done through Amazon Pay. If you’re a supplier, you will have a Vendor Central chargeback.

Amazon Vendor Central Chargebacks vs. Seller Chargebacks

Amazon Seller and Vendor Central chargebacks differ in these areas.

Who they affect:

• Seller Chargebacks (3P): Sellers who use Seller Central to sell products directly to customers.
• Vendor Central Chargebacks (1P): Suppliers ship products to warehouses. Merchants sell these products to users.

Platform:

• Seller Chargebacks: Seller Central.
• Vendor Central Chargebacks: Vendor Central.

Vendor Central chargebacks focus on issues that violate Amazon’s quality control or other shipping issues. Seller chargebacks focus on issues that customers encounter (e.g., merchant error).

Sellers have a $20 chargeback dispute fee for when they fight chargebacks. Suppliers have a list of various fees I’ll cover later.

Both 3P sellers and 1P vendors can dispute chargebacks they believe are unjustified. The specific processes and documentation required may differ.

Summary: Vendor Central chargebacks focus on supplier and Amazon issues. Seller chargebacks focus on merchant and customer issues.

Then There Are Buyer Disputes

Buyer disputes involve the customers contacting the merchant to fix an issue related to a purchase. It doesn’t involve Amazon’s intervention. This may result in you (the business) refunding the customer.

But if there’s no resolution, the process will escalate to an A-to-Z Guarantee Claim.

Summary: This process lets the customer and business try to fix the issue with each other.

What You Should Know about the A-to-Z Guarantee Program

Amazon's A-to-Z Guarantee is a buyer protection program that covers the following disputes when using Amazon Pay:

1. Timely delivery
2. Condition of items purchased
3. Items bought from third-websites

If a customer is dissatisfied with their purchase for these reasons, they can file a claim with Amazon.

If Amazon finds the claim valid, they may reimburse the customer up to $2,500 of the purchase price and seek reimbursement from you.

To be eligible, a customer must first attempt to resolve the issue with you directly. If unsuccessful, they can file an A-to-Z claim.

Unlike chargebacks, A-to-Z claims don't automatically debit your account; Amazon investigates first. While Amazon disputes are between you and the buyer, A-to-Z claims involve Amazon directly in the resolution process.

Summary: Amazon's A-to-Z Guarantee helps buyers with certain issues. It covers undelivered items. It also covers unsatisfactory items. This applies to purchases from third-party sites. The buyer must use Amazon Pay.

Types of Chargebacks on Amazon

The types of disputes sellers will encounter will depend on whether they’re a 1st- or 3rd-party vendor. I’ll cover the differences among these chargeback types throughout the following sections.

1. Types of Seller Chargebacks

You’re likely a regular seller and will encounter these chargebacks:

• Orders shipped past the promised date.
• Wrong products sent to customers.
• Product details don't match the listing.
• Items not securely packaged.
• Customers falsely claim non-receipt or return.
• Packages lack required labels.
• Provided tracking numbers are incorrect.
• Charging more than stated shipping costs.
• Products arrive broken or defective.
• Deliberate deception for financial gain.
• Wrong labels attached to items.
• Orders missing some items.

The actual reason for the chargeback will vary by the reason code the buyer’s bank or card network assigns. And the reason code will vary by network.

Summary: Chargebacks typically happen because of merchant error, fraud, or friendly fraud.

2. Types of Vendor Chargebacks

You’ll encounter these types of chargebacks as a vendor:

1. Carton Content Accuracy. Product quantities don’t match what’s stated in the ASN.

2. Advanced Shipping Notification (ASN) Accuracy. Information about your shipment’s content isn’t accurate.

3. Carton Information Compliance: Mislabeled cartons.

4. Import Shipment Late Booking. Didn’t submit a booking 14 days before Ship Window Open Date.

5. Import Documents Late Delivery. When your cargo arrives outside the time frame within which your cargo must be delivered.

6. Overage PO Units. You sent more products than confirmed in the Purchase Order.

7. On-Time Accuracy. Your carrier doesn't deliver the order on time.

8. No Show. Your carrier misses a confirmed delivery slot without canceling it beforehand.

9. Oversized Carton. Carton exceeded 25 inches (63.5 cm) per side.

10. Overweight Carton. Box sent to Amazon weighed more than 50 lbs (23 kg).

11. Paper Invoice. Sent PDF or paper invoice via Contact Us form in Vendor Central.

12. Prep Issues. Didn’t include certain safety products.

13. Rejected Delivery. Amazon encountered compliance or safety concern.

14. Ships In Own Container (SIOC). Products aren’t SIOC certified and are greater than:

• 17.91 x 13.39 x 10.43 in (45.5 x 34.0 x 26.5 cm) or 
• 27.11 lbs (12.3 kg)

Amazon divides the Prep Issues chargeback chargeback into these subcategories:

• Barcode labeling
• Bagging
• Bubble Wrapping
• Set Creation
• Taping
• Overboxing

Most of the ways to prevent these chargebacks are straightforward. As they require you to do the opposite of what caused them. I will cover how to prevent these chargebacks later, though.

Amazon Chargeback Fees

Amazon charges a $20 Disputed Chargeback fee for Seller Chargebacks. You’ll receive this fee when fighting a chargeback to cover Amazon’s representation on your behalf during a dispute.

They may waive this fee if your order falls under their Payment Protection Policy. I’ll talk about this later. In short, it covers unauthorized transactions.

They have the following fees for Vendor Chargebacks:

Summary: Most sellers will only encounter a $20 fee for fighting chargebacks. 1st party vendor chargeback fees will vary by type.

Time Limits

• File an Amazon A-to-Z Claim (Customer): 15 - 75 after being charged.
  • Must wait 1 calendar day for merchants to address the issue.
• Respond to Chargeback (Merchant): Within 11 days
• Dispute Vendor Charges (1st Party Vendor): 30 days

If you don’t respond to Amazon within 11 days of their notification, they’ll automatically close the claim. From there, they’ll credit the customer for the disputed amount. You’ll have no option to fight that reversal.

How much time do the customers have to file a chargeback?

It depends on the card network:

• Visa: 120 days
• Discover: 120 days
• American Express: 120 days
• Mastercard: 90 – 120 days

And it depends on the reason code. For instance, a customer with a Discover card could have years to file a chargeback related to fraud.

Does Amazon Have a Chargeback Threshold?

• Threshold for Order Defect Rate: <1%

Amazon has various customer metrics that could affect your account like [1]:

• Policy Violations: Issues you must address regarding policies.
• Order Defect Rate (ODR): Measures negative feedback, A-to-Z Guarantee claims, and chargebacks.
  • Service Chargeback Rate: Percentage of orders resulting in a credit card chargeback.
  • Filed A-to-Z Guarantee Claim Rate: percentage of orders with claims filed by buyers.

They’ll gather the Order Defect Rate based on orders from at least 30 days ago. And they’ll only label orders as “defective” once. Meaning a chargeback and an A-to-Z claim on a purchase would count as a single defect.

They mash their A-to-Z guarantee claim rate, chargeback rate, and negative feedback rate into a single metric — Order Defect Rate.

Exceeding the 1% rate could lead to various negative consequences for your seller account, including:

• Amazon may restrict or suspend your selling privileges.
• A high ODR can make you ineligible for the Buy Box, which impacts your visibility and sales.
• Can negatively impact your seller rating and reputation, making it harder to attract new customers.

You can find your ODR rate by going to your Seller Central account, going to the side menu, and pressing Performance. From there, click Account Health and click Order Defect Rate.

It’ll show you your Order Defect Rate and the metrics that contribute to it:

• Negative feedback
• A-to-Z claims
• chargeback claims

Amazon Chargeback & Dispute Processes

The following sections will cover the various processes for disputes, seller chargebacks, and supplier chargebacks.

1. For Disputes & A-to-Z Claims

• How Long Disputes Take: 45 business days.

Regular disputes are between the buyer and seller. If the customer isn’t happy with the results, they may escalate to an A-to-Z claim if it’s an eligible purchase. Or they could talk to their bank or card network and do a chargeback.

Here’s what the process for A-to-Z claims would look like:

1. Buyer reports issue to Amazon.
2. Amazon notifies the merchant.
3. Merchant responds with evidence.
4. Amazon reviews all information.
5. Amazon makes a decision.
6. Merchant may appeal (if applicable).
7. Dispute is resolved based on decision.

2. For Chargebacks

• How Long It’ll Last: Up to 90 days

Here’s what’ll happen during an Amazon chargeback:

1. Customer contacts their card company or bank (issuer).
2. Issuer contacts Amazon Pay for additional information.
3. Amazon Pay contacts you (the merchant) to request information.
   1. They’ll contact you via email or;
   2. Instant Payment Notification (IPN) if you set it up in Seller Central.
4. Amazon Pay also provides the customer with a provisional credit.
5. You choose to accept or dispute chargeback within 11 days.
6. If you dispute, you’ll respond via email or through the Chargebacks page on Seller Central account.
7. Represent your case and submit basic information: Ship date, method, speed, and tracking ID.
   1. Amazon may request additional evidence/information.
8. Amazon passes the information to the issuing bank
9. Issueing bank makes a decision
   1. Shopper wins: Chargeback stands.
   2. Seller wins: Chargeback is reversed.

Amazon says that most bank’s decisions are final with chargebacks. Some card networks may offer pre-arbitration processes to appeal the decision (as a business). This depends, though.

Here’s a video to illustrate some of the above points:

If you don’t fight the chargeback, Amazon Pay will automatically reimburse the customer for the disputed amount. And if you fight the chargeback, you’ll need to pay a “Disputed Chargeback Fee.” This is $20 per chargeback.

I’ll provide some of the information that Amazon will require toward the end of the guide.

When they send a chargeback notification email or an IPN, you’ll see the following details:

• Card type
• Dispute type and reason code
• Disputed amount
• Seller order ID
• Transaction date
• Order reference ID

3. For Vendor Central Chargebacks

And here’s the chargeback process for Vendor Central chargebacks:

1. Amazon identifies a non-compliance issue.
2. Amazon issues a chargeback to the vendor.
3. Vendor receives notification of the chargeback.
4. Review the chargeback details in Vendor Central.
5. Vendor can dispute the chargeback.
6. Submit the dispute within 30 days of the chargeback.
7. Vendor Managers may grant waivers.

What Are Amazon Chargebacks?

You could define an “Amazon” chargeback as an A-to-Z claim. But for the sake of this article, they’re regular chargeback disputes. Also, banks and card networks often use the terms “disputes” and “chargebacks” interchangeably.

A chargeback is a reversal of a transaction initiated by the cardholder's bank. Returning funds from the merchant's account back to the cardholder.

It happens when a cardholder disputes a transaction, claiming issues such as:

• Fraud
• Unauthorized charges
• Dissatisfaction with goods/services.

Coverage will vary on whether a debit card (or gift card) or a credit card was used.

Regulation E and Regulation Z both protect consumers in financial transactions, but they focus on different aspects.

Regulation E focuses on electronic fund transfers (debit cards, ATMs, etc.), emphasizing consumer protection against unauthorized transactions and errors. It has stricter timelines for dispute resolution.

Regulation Z covers credit transactions (credit cards, loans). Offering a wider range of dispute reasons and a longer timeframe for filing claims.

Summary: A forced reversal of funds by the customer’s bank or card network.

How’s This Any Different From a Refund?

When merchants issue refunds, they return money to customers, but payment processors don't compensate merchants. Leading to revenue loss from the sale and processing fee.

In chargebacks, customers dispute transactions with their banks, resulting in reversed payments. Merchants lose the sale amount, processing fee, and often face extra charges.

Frequent chargebacks can put merchants under scrutiny in Mastercard's Excessive Chargeback Program. This involves additional expenses, such as increased processing fees, penalties, and mandatory compliance actions.

These measures raise operating costs and can damage a merchant's reputation. 

Summary: Chargebacks are forced reversals that can result in chargeback fees. Refunds are voluntary reversals and have less financial impact.

Amazon Payment Protection Policy: A Blessing for Sellers

If you qualify for Amazon’s Payment Protection policy, they won’t hold Amazon Pay account holders liable for chargebacks [2]. They also won’t collect chargeback fees.

This protection primarily protects merchants from chargeback fees related to fraudulent purchases.

Here are the qualifications for this unbelievably great protection:

• Sale must be for tangible goods (e.g., DVDs).
• You must have a Seller or Business account.
• Must respond within Amazon’s time limit.
• Have to give Amazon all the documentation they request.
• Your account doesn’t violate their policies, Agreements, or Acceptable Use Policy.
• Chargeback must be labeled as “Unauthorized Payment.”

Let’s address the last point. If the reason code for the chargeback is anything other than fraud (e.g., not as described), Amazon will not cover it. 

Their website is thorough on the policy. They mention that you must provide these documents:

• Shipping address
• Tracking number (if applicable)
• Date you shipped the order
• Proof of delivery
• Whether the goods were tangible

They’ll use this information to determine whether you’re eligible for their Payment Protection. You must also submit this evidence within 11 days of receiving their chargeback notification email. Failing to do either of the above steps will result in automatic rejection from the protection.

Summary: Payment Protection Policy prevents chargeback fees from eligible purchases that were unauthorized.

How to Prevent Amazon Chargebacks

I, and Amazon, recommend the following strategies to prevent chargeback disputes:

• Use as many details as possible for products/services.
• Comply with Amazon’s Customer Service Policy.
  • Sellers must provide high quality service, accurate product descriptions, and clear return policies.
• Ensure returns are as easy as possible.
• Don’t adjust the shipping address provided by Amazon Pay.
• Have customer service that is actually helpful.
• Easy access to customer service.
• Require signatures when shipping high-value merchandise ($100+).

Otherwise, Amazon recommends keeping evidence such as emails, recipes, and copies of communication. These aren’t preventative measures but are good for helping you fight disputes.

Summary: Make your returns as easy as possible and follow Amazon’s rules.

Avoiding Vendor Chargebacks

And here’s how to prevent Vendor chargebacks based on chargeback type:

1. Carton Content Accuracy. Provide accurate information in your ASN.

2. ASN Accuracy. Double-check to ensure you send the correct ASN information.

3. Carton Information Compliance. Use scannable barcodes and labels. Also, include compliant 20-digit IDs, and provide accurate ASN information.

4. Overage PO Units. Review and update your product catalog.

5. Import Shipment Late Booking. Submit Direct Import booking 3 days (air freight) or 14 days (ocean freight) before Ship Window Open Date.

6. Overweight Carton. Boxes with multiple items can't exceed 50 lbs (23 kg), pack heavier items separately.

7. Import Documents Late Delivery. Provide an Estimated Cargo Delivery Date.

8. No Show. Accurately schedule and cancel deliveries through Amazon's CARP system.

9. On-Time Accuracy. Deliver all products within the shipping window.

10. Oversized Carton. Boxes with multiple items must be under 25 inches (63.5 cm) per side.

11. Paper Invoice. Send invoices via Electronic data interchange (EDI).

12. Prep Issues. Use suitable packaging for customer delivery. Check Vendor Central for specific instructions.

13. Rejected Delivery. Follow Vendor Manual and Resource Center’s requirements for how to deliver pallets.

14. Ships In Own Container. Ensure products are Ships In Own Container (SIOC) certified.

Summary: Do the opposite of what caused each of the vendor chargebacks and follow Amazon’s rules.

How Do I Fight & Win Amazon Chargebacks?

You’ll need to decide whether you want to dispute a chargeback. If the transaction’s value is less than $20, reconsider fighting the chargeback. Because you’ll need to pay $20 to fight a dispute. Thus, you’d lose more money by fighting it.

Also, consider the evidence you could provide and whether you’re covered by Amazon’s Payment Protection Program. If you’re covered, fight it. If you don’t have sufficient evidence that could win the chargeback, let the chargeback stay.

Now that you’d decided, here’s the bare minimum you’ll need to give Amazon:

• Description of product/service
• Transaction status
• Proof that the cardholder received sent item

If you’re fighting a dispute, you don’t want to submit the minimum. Submitting the following evidence could improve your odds of winning:

• Product photos
• Copy of return and refund policies
• Communication records with buyer
• Usage logs for digital goods
• Tracking numbers
• Order confirmation emails
• Information regarding cancellation, changes to, or refunds for order

This information’s going to the credit card company and/or the issuing bank. Thus, you want to convince them that the order was legitimate. Not Amazon.

Summary: Don’t fight a chargeback if you don’t have sufficient evidence. If you do, then give it to Amazon and let them represent you.

FAQs

How Do I File a Dispute on Amazon?

Navigate to Account Activity, find the transaction in question, and click Details. Find and click File/View Claim and enter your transaction date, the amount, transaction ID, and a description of your problem. From there, Amazon will review your dispute.

Conclusion

Amazon’s A-to-Z claims focus on some disputes within Amazon Pay. Vendor Central chargebacks are for suppliers. And other disputes go through the customer’s bank with Amazon as your representative. All processes have varying fees.

One great way to prevent chargebacks — that happen outside of Amazon Pay — is to use chargeback alerts. These let you know when an issue occurs. Giving you a chance to address it before it escalates to a chargeback.

We’ve partnered with major alert providers (like Visa RDR) to offer such alerts. Learn how they can help.

Sources

• [1] Amazon Pay. Performance Metrics for Your Account
• [2] Amazon Pay. Understanding Payment Disputes and Chargebacks