Amazon Vendor Economics · Glossary

Amazon Vendor Deduction

Updated October 25, 2026

An Amazon vendor deduction is money Amazon subtracts from a first-party (1P) vendor's invoice before paying it. The master reconciliation is one line: invoice total minus remittance equals deductions. Buyers call the unexplained lines "ghost deductions", but each genuine deduction belongs to a stream with its own rules:

• compliance chargebacks, penalties for process defects;
• shortage claims and price claims, underpayments against the invoice;
• co-op and contra-COGS (cost of goods sold) overbilling, contractual allowances charged above what the agreement supports.

Not every unexplained line on a remittance is a deduction. Provision for Receivables, as practitioners describe it, is a payment hold, not a deduction, and it is not recoverable. It appears on the remittance with no invoice or PO (purchase order) reference, and no Amazon page names it.

How does a vendor work through its deductions?

Sort each line by type, then follow that type's window and route.

1. Reconcile. Subtract the remittance from the invoice total.
2. Set aside the holds. Lines with no invoice or PO reference may be Provision for Receivables, which practitioners describe as a hold rather than a deduction.
3. Sort the rest by stream. Compliance chargebacks sit under Reports, then Operational Performance. Shortage and price claims are disputed through Payments, then Dispute Management. Co-op sits under Payments, then Co-op.
4. Check the window for the type you are holding. There is no all-deduction window, and missing a window generally closes the case.

The Amazon vendor deductions explained article walks through each type in turn. The margin recovery audit runs this same sort across every deduction still inside its window.