Vendor Central: Contesting Chargebacks and Invoice Reconciliation
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An overage PO unit’s chargeback means that Amazon received more products than you confirmed in a purchase order. If you send Amazon more items than you confirmed in a purchase order, you will be assessed for a chargeback based on the overage percentage, determined from your 10 most recent overage POs.
show moreAmazon calculates your overage percentage by dividing the number of excess units received by the total number of units received for the same purchase order. Your overage percentage will place you into one of three tiers noted in the chart provided by Amazon in their support center. For example. If you had one overage purchase order during the previous two months with 10 units confirmed, but Amazon received 15 units from you.
Your overage percentage is 33%. That is five divided by 15, which falls into the first tier. And results in a chargeback rate of 10% per overage product unit, Amazon assesses, which tier you fall into on a weekly basis and will only consider overage purchase orders from the previous two months in their calculations.
There are some exceptions as noted below. If your products are categorized by Amazon as baby health and personal care apparel, beauty shoes, luggage, grocery, pantry, or luxury beauty, a 30% standard price reduction applies to the first tier of overage percentages. However, if the overage percentage exceeds 41% tier two or three rates will apply.
The amount charged for overage fresh products is charged at a hundred percent of cost of product for any overages sent. Here are a few ways in which you can prevent this. Chargeback. Amazon may not have correct information about which products should be ordered for case quantities. And how many individual units make up a case ensure that Amazon knows how many individual units are in a case. And this is done through the setup of your product catalog on vendor central.
A system may allow for multiple purchase orders to be combined. Amazon cannot accept combined or consolidated purchase orders. Units for multiple purchase orders may be physically combined into the same box or same shipment. However, all order information such as the PO confirmation, the advanced shipment notification and the invoice must correctly reference the PO numbers originally submitted.
Your order may have been filled more than once by mistake. You would need to check with your warehouse to ensure this was the case or not. You may have confirmed fewer units than Amazon ordered. Amazon considers a purchase order to be valid for the number of units you confirmed, not the number they originally ordered.
The operational impact of your non-compliance means that if you send Amazon excess inventory, it takes up valuable storage space and may lead to overstock of a product resulting in longer sales cycles.