For many sellers, there is nothing more tedious than dealing with an Amazon chargeback. These types of incidents occur when shoppers contact their bank directly to dispute a charge on their card related to a purchase they were not satisfied with.
Having little or zero experience with this scenario might seem daunting, but rest assured that this is not the end of the world.
By reading this quick guide, you will be able to navigate chargebacks like a pro.
Here’s a quick rundown of what we’re going to cover today:
- What Is an Amazon Chargeback?
- How Should I Respond to a Chargeback?
- How Does Amazon Determine Responsibility for the Chargeback?
- Amazon Chargebacks | FAQs
- Additional Tips to Keep in Mind
- Final Thoughts
What Is an Amazon Chargeback?
We know that Amazon has many mechanisms and protocols to ensure customer satisfaction as well as dealing with difficult situations (especially the ones that involve money).
The distinction between an Amazon chargeback and other procedures lies in the entity that regulates the outcome of the claim. With most Amazon protocols, the buyer will contact Amazon directly through Amazon Pay; the entity that regulates these issues.
However, with an Amazon chargeback, it is then the bank that dictates the outcome of the claim.
These types of claims are very specific in how they work and they can be made for a variety of reasons, some of the most common ones being:
- Stolen credit cards. When a person gets their card stolen, they might call their bank to dispute the charges made on their account by someone who was not the card owner.
- The charge is not recognized by the account holder. Like with any unrecognized movements on a bank account, you can call the bank to look into payments that you don’t recognize on your statement.
- The shopper did not receive his purchase. When this happens, most people will open a standard claim; but in extreme situations, someone may contact his bank to deny the charge to their account.
- The shopper got a damaged or defective product. This is somewhat similar to the last point in the fact that most people will open a regular claim through Amazon. But in some cases, a person might go straight to their bank.
How Should I Respond to a Chargeback?
The first and most important part, in the beginning, is that you need to attend to this matter as soon as possible, otherwise you might incur future penalties or make the situation more complicated for yourself.
Amazon will always contact you via email or through seller central depending on your settings.
From there you can choose 2 ways to go about resolving:
If you decide to take responsibility for the charge, notify Amazon Pay within the first 11 days so that they will debit the amount from your account, otherwise, they will automatically take it from your Amazon Pay account.
While this option will make your shoppers really happy, you should take into account that you will be losing money if you do not take the time to carefully review what the problem was.
Once you are absolutely certain that the failure is totally foreign to the shopper, do not hesitate to refund them as soon as possible.
This can be done in Seller Central through the option Action Required chargeback.
Dispute the chargeback via Amazon Pay
If you find this Amazon chargeback claim to be wrong, you may dispute the claim through the Chargeback Claims Page under the Performance menu in Seller Central.
After this, Amazon will represent your case to the credit card company to seek mediation.
An Amazon investigator will review the information you provide and create supporting documentation to submit to the bank on your behalf.
Then, they will determine who will be responsible for the chargeback. However, in most cases, the issuing bank is the one to make the decision, most of these being final with no option to appeal.
Take into account that the resolution of the chargeback can take up to 90 days from the date the charge was disputed with the bank in question, or even longer.
Watch this video for more information:
How Does Amazon Determine Responsibility for the Chargeback?
In the event of an Amazon Chargeback the entity held responsible can be either the Seller or Amazon itself, meaning after reviewing the case Amazon will determine who answers for the chargeback.
The details of how this is handled are outlined in the Amazon Payments Customer Agreement, which states that the seller will not be held liable for chargebacks as long as your transactions meet all the requirements of the policy.
To make sure that you, as a seller, are not responsible for this event, you need to comply with the Amazon Pay Customer Service Policy, you will need the following:
- Your account must be a Business or Seller account.
- Make sure you submit everything they request within the timeframe, late submissions may make you responsible for the chargeback.
- The transaction in question has to be a sale of physical goods. The Payment Protection Policy does not apply to sales involving services, digital content, or cash equivalents like gift cards.
- The transaction as well as your Amazon Pay account will need to be within the terms of the applicable agreements and policies.
- The chargeback must be labeled by the bank as an Unauthorized Payment; any other kind of label will make you responsible.
The seller is accountable for the Amazon Chargeback if the claim results from a defective product or a product that is not aligned to the description on the listing.
If the chargeback claim is covered by the Payment Protection Policy, Amazon will take care of it. Nevertheless, you will still be required to provide some documentation and make sure it’s submitted on time to avoid any further problems.
This is some of the information you are going to need at hand:
- The date the item was shipped
- Proof of delivery
- The address it shipped to
- A tracking number
- The type of product (physical or intangible)
You may be requested to submit additional information, so be prepared and handle this in a timely manner.
Image: AMZ Advisers
Amazon Chargebacks | FAQ
1.What should I do first?
Now that you have a basic understanding of how an Amazon Chargeback works you might be wondering what your first step should be.
If you receive a cashback notice, start by taking the time to review everything that happened with this transaction, all your interactions with the customer, dates, etc. This will help you determine if you should dispute or just accept the chargeback.
2. What type of information will I receive in Amazon’s notification email?
Chargeback Instant Payment Notification emails will include the following information:
- Your Seller order ID
- The order’s reference ID
- The date of the purchase
- The disputed amount
- Information about the buyer’s card
- Type of dispute*
- The dispute reason code
*There are two types of dispute: Unauthorized transaction chargeback, which is normally eligible for the Amazon Pay Purchase Protection, or a Service Chargeback, which provides information about the reason why the buyer has submitted the claim and more important details.
Check out the Cardholder Dispute Reason Code Encyclopedia to learn more about related terminology.
3. How much time do I have to respond to a chargeback claim?
Keep in mind that you need to respond to a chargeback claim within 7 calendar days after you are notified. Otherwise, Amazon will debit your account for that transaction, in other words, you can potentially lose money.
4. Is there a cost to make a dispute?
Keep in mind that Amazon is not just going to call the card company, they’re going to build your case and present it on your behalf to the bank in question.
For this service, Amazon will charge 20 USD per chargeback. However, if it’s determined that the event is covered by the Payment Protection Policy, you will not be charged for the 20 USD fee nor the chargeback claim.
The same is true for the opposite scenario where if you are not covered by the Payment Protection Policy both charges will be debited to your account. Before disputing any Amazon Chargeback, review everything and make sure you have a solid case; or it could cost you a bit extra.
5. After submitting a dispute, what can I do if the shopper’s bank does not rule in my favor?
Amazon will inform you in detail about the outcome and how much money you will be debited with via email.
You can review the dispute and reply back to the following email: firstname.lastname@example.org.
However, keep in mind that, in general, the bank’s decision is final.
Additional Tips to Keep in Mind
An Amazon chargeback is not the end of the world, it’s relatively easy to deal with but it can have a negative effect on your rating as a seller.
There are a variety of factors to a claim like this that can impact your numbers and bring you lower than where you want to be.
For this reason, it’s always smart to prepare for such an event by keeping tabs on all your transactions as well as taking some precautions like the following:
- Be aware of your agreements and policies, understand how they can impact you and what you need to do to stay in compliance.
- Keep chargebacks in mind when creating your policies.
- If you have a policy of not accepting returns you are likely to receive more claims for an Amazon chargeback rather than a regular claim.
- Watch your product descriptions, and make sure you are as clear and thorough as possible.
- Be as accurate as possible in order to avoid any misconceptions or misunderstandings.
- Make your return policies easy to follow and execute so people don’t feel the need to settle matters through the bank instead of coming to you for solutions.
- Keep records of all your transactions, including shipping dates, tracking numbers, and all the information that can help you during a claim.
- Build up your customer support.
Remember that the devil is in the details, and shopping online can be stressful. You know that more than half your shoppers are refreshing a tracking page every 5 minutes; so, monitor your fulfillment process to eliminate unnecessary stress factors like not providing a tracking number or slow response times.
The better your client relationships, the less they’ll feel the need to look for outside help.
Keeping up with an Amazon Chargeback can seem challenging at first glance but the only thing you need to deal with it is to have good business practices, if you weren’t doing that already then it’s to change and elevate your game.