Steps Amazon’s Vendors and Marketplace Sellers Need to Take to Recover Erroneous Fees

By John Collins, Founder & CEO — chargeguard 

I have disputed erroneous fees from Amazon, first as a top-tier seller and then as a tech developer in the service of hundreds of clients. When it comes to recovering the money you deserve, I have both good news and bad news. 

Let’s go with the good news first: the erroneous fees Amazon charges are recoverable. It is even possible to recover fees Amazon levied up to five years ago. 

However, the bad news is that this process is not necessarily easy or straightforward. If it were, every vendor in your situation would be attempting it. In this article, I will let you in on what I have learned about the recovery process and the steps you can take to recover these fees.

Why is Amazon charging so many erroneous fees to its vendors?

I first encountered the need to address Amazon’s fees after years of struggling to mitigate and recover them as a top-tier seller. I found that I was far from the only one experiencing growing incredulity over the rising charges. Time and time again, I listened to similar struggles from vendors in the same situation.

My first step was to investigate. In 2019, I calculated that Amazon charged $6 billion in erroneous fees. Today, those charges have more than doubled to almost $13 billion.

Despite the growing charges, Amazon does not offer a simple solution to recover them. For this reason, most vendors push through this pay-to-play model, accepting the fees as the price of doing business in the global marketplace.

How to stop Amazon from charging erroneous vendor fees

If you feel unjustly burdened by Amazon’s fees, you are not alone. Every single vendor and seller using Amazon’s e-commerce platform is affected.

Tightening your shipping practices in accordance with Amazon’s operational compliance and guidelines for e-commerce sellers is your best means of mitigating the charges. Unfortunately, Amazon’s automated fees are changing all the time. While clean invoicing practices enable you to lessen some of the fees, you cannot expect to eliminate them altogether because the automated process is prone to mistakes.

Automation is the secret sauce that makes Amazon’s global marketplace possible, but the process is not perfect. And when the system makes mistakes, the consequences fall primarily on vendors. 

Automation is not altogether a bad thing. On one hand, it is the core element behind many of the erroneous charges eroding your bottom line. On the other hand, it enables you to sell your products to millions of buyers and sellers worldwide. In the US, the company ships over 66,000 orders every hour and up to 1.6 million packages each day.

How can Amazon vendors recover fees charged in error?

As I mentioned before, the process of recovering erroneous charges from Amazon is daunting. Even if you are just one small to mid-sized business, it is likely you will accumulate thousands of dollars in Amazon chargebacks each and every month, and that’s with tight practices in mitigation. We have seen companies with tens of thousands of dollars in fees, and we have seen companies with millions in fees. To recover those dollars, you must dispute every $2 or $3 to multi-thousand dollar fee individually, and the process often drags on for months. No wonder so many brands give up without success. We liken the experience to “death by a thousand cuts.”

Whether you represent a small, medium, or mega business on Amazon, your problem is probably the same. You need the money you lose to Amazon’s charges to grow your company and market your product, but you lack the time and resources to track your Amazon account and dispute every fee. 

To recover erroneous fees from Amazon, you will need to follow the following steps: 

• Obtain your data and store it every day
• Organize your data to make it useable
• Dissect the information to determine which charges are erroneous
• Collect documentation to dispute the charges you wish to contest
• Open a dispute with Amazon and keep records on the status of your claim’s progress

When you are ready to open a dispute, follow the steps above to have as much data for evidence as you can gather in hand. This is not a one-size fits all approach as Amazon is constantly changing, so you need to constantly adapt. At that point, you can either escalate the dispute into a second or third stage. If at first you don’t succeed, try, try again. You have two strikes, after all. 

If you have been charged Amazon fees, there is a good chance you can recover a significant portion of that money. Determine why the fees were charged and whether they were charged in error. If the charges are erroneous, file for a refund with supporting documentation ready. Now is the time to start thinking about how much money Amazon owes your company in unpaid fees. Calculate that amount and determine whether you have the time and energy to dispute the charges.