Chargeback Prevention

Amazon Pay & Amazon Seller Chargebacks

Amazon Chargebacks

It’s not easy succeeding in ecommerce, but the barriers to becoming an online merchant have never been lower. Thanks to the many ecommerce platforms and software solutions on the market today, anyone with a great product can get their operations up and running quickly without having to build a site from the ground up. Amazon is the solution of choice for many merchants, either with their Seller program or through Amazon Pay. One drawback to this is that it will drag Amazon into your chargeback process. What do merchants need to know about getting hit with Amazon Chargebacks?

New call-to-actionAmazon’s Seller services and Amazon Pay are two very different things. The Seller program allows merchants to operate a storefront within Amazon, listing items for sale that shoppers can find when they search the Amazon site. The customer places the order through Amazon, the merchant fulfills it, and Amazon sends the merchant a remittance check of their earnings—with, of course, Amazon’s fees deducted.

Amazon Pay is a service for merchants who operate their own ecommerce sites. It allows customers to pay by using their Amazon account with whatever payment credentials are stored there. It’s just like using PayPal to check out— Amazon transfers the funds to the merchant’s account, and the customer never has to provide their credit card information to the merchant.

What happens when a cardholder disputes a charge placed via one of these services? The chargeback will hit Amazon’s account and they’ll get the notification, but they of course will know exactly which merchant solicited the transaction. You’ll have to work with Amazon if you want to fight the chargeback, and if it goes through Amazon will deduct the cost—including fees—from your funds or earnings.

Merchant services like those provided by Amazon can solve a lot of problems for merchants, but they don’t make chargebacks go away. If you’re going to sell or accept payments through Amazon, it is a must that you understand how their chargeback process works and what you can do to prevent Amazon chargebacks in the first place.

What are Amazon Seller Chargebacks?

When a customer buys something from an Amazon Seller, they pay Amazon, not the Seller directly. So when a chargeback follows, Amazon is the first to hear about it, and they will contact the Seller to ask how the chargeback should be handled.

To see your Amazon chargebacks, you can log into the Seller Central site and pull up Chargeback Claims on the Performance menu.

The Seller has a few options at this point, and Amazon will give you seven days to choose one:

  1. Resolve the dispute by issuing an immediate refund
  2. Instruct Amazon to represent the charge and provide them with relevant information about the transaction
  3. Accept the chargeback (or do nothing, in which case this is the default action)

The first option is a good one for merchants in most situations. The opportunity to avoid a chargeback by providing a refund instead isn’t always possible when you receive the chargeback directly, unless you’re paying Verifi or Ethoca for chargeback deflection services. With Amazon Seller chargebacks you should always have the chance to opt to give a refund instead, and this will always be less costly than the third option. 

However, if you just go ahead and refund a friendly fraud chargeback, it can come back to bite you. Friendly fraudsters who file chargebacks for selfish or malicious reasons will keep coming back to you with more fraudulent chargebacks if they realize they can get a refund and keep the product every time they dispute your charges. That’s why it’s important to fight back with chargeback representment—which brings us to option number two.

You can fight Amazon Seller chargebacks either by selecting “Represent your case” from Chargeback Claims in Seller Central or by replying to the notification email. Your chargeback notification will include detailed information about the chargeback, including the chargeback reason code. If the reason code does not fit the facts of the transaction, the chargeback is probably friendly fraud, and you can fight and beat it if you have documentation that supports your version of events. Chargebacks that are truly the result of third party fraud or merchant error can’t be fought.

When you submit information to represent an Amazon chargeback, an Amazon investigator reviews your evidence. None of your documentation or comments are visible to the buyer. As a general guideline, Amazon encourages Sellers to submit the following information:

  • Shipping date
  • Shipping method
  • Tracking information
  • Product information
  • Correspondence with the buyer

If the Amazon investigator finds your information sufficient, they will then use it to create the documentation that ultimately gets submitted with the representment.

If the issuing bank decides in your favor, the chargeback will not be deducted from your Amazon funds. If the bank decides for the cardholder, or if your response is insufficient or you are found to be in violation of your Seller agreements with Amazon, Amazon will charge you for the amount of the chargeback plus any associated fees.

How Can Amazon Sellers Avoid Chargebacks?

Sellers can view information about their Amazon chargebacks under the Performance menu in Seller Central. Many Amazon chargebacks will result from lapses in compliance with Amazon’s fulfillment and delivery requirements. By reviewing the information Amazon provides about your chargebacks, you may be able to identify specific issues that lead to non-compliance and chargebacks.

These issues may include things like missing labels, insufficient packaging, and various problems related to the timing and routing of shipments. Any chargebacks with details that specifically relate to Amazon Seller procedures should be preventable in the future if you take steps to correct the issues that caused them.

What are Amazon Pay Chargebacks?

Merchants can use Amazon Pay to process online payments without having to directly handle customers’ payment card information. Since many ecommerce shoppers have an active Amazon account, this provides merchants with a third party payment solution that most of their customers will already have signed up for.

When a cardholder disputes a payment they made through Amazon Pay, the issuing bank contacts Amazon Pay first, because they had the actual transaction with the cardholder, not the merchant. In that way, Amazon Pay chargebacks are similar to Amazon Seller or PayPal chargebacks. Amazon deals with the bank, and the merchant deals with Amazon.

Amazon Pay puts chargebacks in one of two categories: Unauthorized transaction chargebacks and service chargebacks. Unauthorized transaction chargebacks typically result from third party fraud and under the Amazon Pay Purchase Protection Policy, merchants won’t necessarily be liable for all of them. The details of this policy are spelled out in the Customer Agreement.

Service chargebacks are those that occur when the dispute relates to the product itself, delivery and fulfilment, or the merchant’s failure to uphold their agreement with the customer. Merchants are liable for these types of chargebacks, but when they’re based on false claims they are considered friendly fraud and can be fought and beaten.

Amazon Pay will send you a notification email when you get a chargeback, which will include details such as the order number and reason code. Once you receive this notification, you have 11 days to submit a response.

If you choose to fight the chargeback, Amazon Pay will charge you a $20 Disputed Chargeback Fee. You’ll submit your evidence and explanation to Amazon Pay, and they will create the documentation for the representment and submit it to the issuing bank.

If the issuing bank decides to accept your representment of the charge, you keep your money. If they don’t, or if you accept the chargeback or send no response, Amazon Pay will deduct the chargeback amount and all fees—both theirs and those charged by the banks—from your account.

How Can I Avoid Amazon Pay Chargebacks?

Much of the advice Amazon Pay has for their merchants is the same advice that would apply to any merchant, anywhere: be generous with your refund policy, provide excellent and easily-accessible customer service, be realistic about setting expectations for your products when you’re creating your marketing content, and keep copies of your transaction details and communications in case you ever need them for representment.

Merchants should also take care to protect themselves by using shipping services that provide tracking numbers, and by making sure they always ship to the address the customer provided to Amazon Pay. It’s a common tactic of fraudsters to change a shipping address after an order has been placed, and you may lose some of your protection from fraud liability if you change the shipping address after receiving an order through Amazon Pay.


It’s great to give customers new and easier ways to purchase and pay for your goods, but unfortunately all these wonderful new solutions come with new varieties of chargebacks to worry about. The good news is that the best practices for avoiding chargebacks are pretty universal, so if you’re doing a good job at preventing chargebacks in general, the overall rate shouldn’t go up much when you expand your payment options.

However, because Amazon chargebacks can result from some specific compliance problems, it’s important to review their chargebacks carefully so you can identify those issues as early as possible. You should also take advantage of the opportunity Amazon gives Sellers to deflect chargebacks by refunding the customer. Amazon makes it very simple to manage refunds in Seller Central, so use these tools at your disposal to prevent disputes from becoming chargebacks whenever you can.

For many merchants, Amazon is just one channel for sales among many, and protecting themselves from Amazon chargebacks must be looked at as part of an overall chargeback defense strategy. When chargeback management gets so complex that it’s taking you away from the essential functions of your business, it may be time to call in the experts. When you have the right team with the right analytics on your side, you can zero in on the root causes of your chargebacks and determine the actions needed to fix them—no matter what channels they’re coming from.

Thanks for following the Chargeback Gurus blog. Feel free to submit topic suggestions, questions or requests for advice to:

Fight & Recover Chargebacks - Get The Guide