Amazon Vendor Economics · Glossary

Compliance Chargeback

Updated October 12, 2026

A compliance chargeback is a penalty Amazon deducts from a 1P vendor's payment for a supply-chain compliance defect: wrong or unscannable labels, late or inaccurate shipments, missing or bad Advance Shipment Notifications (ASNs), non-compliant packaging, or routing failures. It is not a consumer credit-card chargeback. Same word, unrelated mechanism, and the confusion is common enough to state outright. It is also not a shortage claim. A shortage claim is an invoice underpayment for goods Amazon says it did not receive; a chargeback is a fine for how the goods arrived.

A shortage claim can be disputed for two years. A chargeback gives about 30 days for the first dispute, counted from the date on the chargeback record in Vendor Central, then one re-dispute within 30 days of a refusal, with the second clock running from the refusal. The evidence has to be ready before the charge lands, not assembled afterwards.

What does a compliance chargeback cost?

Amazon groups defects into categories that follow the fulfillment lifecycle: purchase order, ASN, preparation, packaging, transportation and receive process. The full fee schedule sits behind the Vendor Central login, and most per-type figures circulating publicly are recovery-vendor content. Several published rates hold up across multiple sources, including these; verify anything else in Vendor Central:

1. Ships in Product Packaging (SIPP) non-compliance: $1.80 to $4.40 per unit by shipping weight, effective January 2025, in Vendor Central. This is separate from the Seller Central FBA SIPP fee.
2. In Full Delivery, fully enforced in the US and Canada from July 2025: Not Filled at 5% of cost of goods sold (COGS) on the shortfall, waived when the trailing 12-week fill rate is above 95%; Down Confirmed at 3% of COGS with no waiver; Overage at 100% of COGS on the excess with no waiver. No public Amazon primary document confirms these, so treat them as medium confidence.
3. Not on Time: 3% of product cost, historically waived when the trailing four-week on-time rate is above 90%, a line secondary sources report Amazon raised to 95% for North American vendors from February 2026, so confirm the current threshold and measurement window in Vendor Central. Amazon's metric here is PO On-Time Accuracy.

Chargebacks are viewed and disputed under Reports, then Operational Performance. A related deduction, Frequently Returned Items, is triggered on a category-relative return rate that Amazon does not publish, unlike the Returns Processing Fee program, which does. A margin recovery audit treats chargebacks as a 30-day queue and shortage claims as a two-year backlog, because the evidence and the filing surface differ for each.