Amazon Shortage Claims & Disputes | Simply explained

Shortage Claims

Shortage claims occur when invoiced product quantities fail to align with receipt records at Amazon’s fulfillment centers by the invoice due date. These financial claims are generated when the products shipped do not match Amazon’s receipt records, creating discrepancies between what vendors invoice and what Amazon actually receives.

How Shortage Claims Work

Shortage claims typically arise about five days before the invoice’s due date, allowing time for potential matching of the invoice against Amazon’s records. Accurate alignment between the invoice, purchase order, and receipt records is crucial for the processing of full invoice payments.

In Vendor Central’s Deductions and credits tab, the entire invoice amount is listed under Invoice/Payment, while the shortage claim is represented as a negative value under Debit. Shortage claims are denoted with the invoice number followed by SC (for example, if the original invoice is INV123, the shortage claim would appear as INV123-SC).

Causes and Impact

Discrepancies may arise from operational defects, causing Amazon’s records to reflect different quantities or shipment details than those on the invoice or bill of lading (BOL). These claims are indicated as negative values in the deductions column of the invoice and directly impact vendor payments until resolved.

Resolution Process

An initial automated review process attempts to confirm or reverse shortage claims within 35 days after the invoice due date. During this period, Amazon’s system works to match shipment records with invoice details.

Disputing Shortage Claims

Vendors can dispute shortage claims after the internal review is complete, provided the invoice is not approved, paid, or already disputed. The dispute process can be initiated through the Invoices or Dispute Management sections in Vendor Central.

Submitting a dispute requires:

  • Comprehensive details about the shipment
  • Supporting documents (such as bills of lading, packing lists, or delivery receipts)
  • Clear explanation of the discrepancy

The resolution process can take up to 35 days, after which deductions might be reimbursed if the dispute is successful. If disputes are rejected, vendors have the option to submit a credit memo or cancel the invoice.

Prevention Strategies

To minimize shortage claims, vendors should:

  • Enhance receipt and invoice accuracy
  • Ensure proper documentation of all shipments
  • Utilize tools like the Financial Scorecard and Operational Performance dashboard for insights
  • Maintain accurate records that align with purchase orders and shipment details

This mechanism is crucial for managing discrepancies between shipped and received products while maintaining vendor-Amazon financial relationships.

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