Another holiday rush is over. As retailers of all sorts catch their collective breaths, many e-commerce sellers and vendors will now find themselves facing inevitable chargebacks and fees from Amazon’s automated accounting system.
Those that aim to dispute erroneous charges will find the effort depletes valuable time and resources and drags on for months — often with no true resolution. Meanwhile, a constant stream of new fees erodes profits this year, just like the year before.
This is why Amazon vendors attempting to reclaim money from the e-commerce giant use chargeguard to recover historical fees and chargebacks. Not only can the team at chargeguard recover the erroneous charges from this year’s holiday shopping, but they can also dispute fees up to five years back.
How chargeguard entered the fight to recover erroneous Amazon fees
After years of battling Amazon’s fees as a top-tier seller and hearing about the struggles of many others in the same situation, John Collins — the founder and CEO of chargeguard — knew a solution was needed. Spurred to investigate, he estimated Amazon charged $6 billion in erroneous fees in 2019. With the growth of e-commerce over the past several years, he calculates those erroneous charges have risen to nearly $13 billion today.
“I was shocked at the huge amount vendors lost in error with very few solutions for recovering lost revenue,” Collins recalls. “At the time, and even now in 2023, there are far too many vendors just pushing through this pay-to-play arena. The problem is massive, and I knew someone had to level the unfair playing field.”
Collins set out to cultivate strategic relationships and gather a team, entering an unknown field with no previous benchmarks for guidance. After seeking out experts with highly specialized skill sets in tech development, chargeguard was formed.
The evolution of Amazon’s chargebacks and fees
Back in 1994, Amazon took up no more real estate than Jeff Bezos’ garage. Fast forward 20 years and that startup spanned a global marketplace with automation that charged billions in fees. Today, a report shows that nearly 2 million small-to-medium businesses operate through Amazon, and the mounting charges impact each of them regardless of their size. Everyone acknowledges that Amazon’s global reach benefits its vendors, but while they need Amazon to be successful, they also need to protect their own e-commerce businesses.
If recovering the fees Amazon charges in error was a simple, straightforward task, businesses would do it. Unfortunately, the time-consuming process leads most vendors to accept the fees as the cost of doing business with the e-commerce giant.
Furthermore, Amazon’s automated fees are constantly changing. Automation makes the massive process possible, but unfortunately, the system’s flaws fall heavily on vendors.
“Automation is certainly a mixed bag,” observes Collins. “In its favor, automation enables millions of buyers and sellers from anywhere in the world to complete transactions every day on the online marketplace. In the US, they ship over 66,000 orders every hour and 1.6 million packages every day. On the other hand, automation is behind the billions of dollars in erroneous charges that eat away at vendors’ bottom line.
“Brands that attempt to recover fees often give up without success,” Collins continues. “Most companies do not have the necessary resources to keep tabs on their Amazon accounts. Within months, even small to mid-sized businesses easily accumulate thousands of dollars in Amazon chargebacks. To recover the fees charged in error, they must dispute every single $2 and $3 fee individually. We call that death by a thousand cuts.”
How chargeguard fights for Amazon vendors
By working with chargeguard, businesses gain support to recover historical deductions and fees, leaving them with more time and resources to focus on growing their companies. “Through our proprietary process, our team can recover an average of 70% of fees and chargebacks for each of our clients,” says Collins. “We are able to recover the erroneous fees charged as far back as five years.”
Recovering historical fees is just one part of how chargeguard helps its clients create a better experience on the Amazon marketplace. The team’s forward-facing services include helping brands minimize new deductions before they ever take place.
“We track clients’ Amazon accounts and update them daily with concise emails showing how much Amazon is charging them and the reasons they are incurring these fees,” explains Collins. “We also reveal how those small chargebacks and shortages add up to impact your business.”
Amazon fills a need for online e-commerce businesses. Still, their operational compliance rules and regulations are challenging to keep up with, and their automation is prone to mistakes that cost vendors billions.
“Just imagine the amount of lost revenue that accumulates over five years with Amazon,” Collins remarks. “For the big companies doing millions of dollars of business each month, a lot of money is at stake. Even for smaller companies, years of fees amount to tens of thousands of dollars that are better spent scaling their own companies. When clients partner with our team to recover prior fees and minimize new charges, they see up to 20% increase in their profits.”