Amazon Shortage Claims

Anyone operating as an Amazon Vendor knows the challenge: discrepancies can arise between shipped goods, invoices, and Amazon’s receiving data. The result is what Amazon calls Shortage Claims – financial deductions applied by Amazon when delivered quantities do not match the registered receiving data.

In this article, we explain how Shortage Claims arise, the sources of error behind them, and how you can manage the dispute and re-dispute process in Vendor Central. We also provide recommendations to avoid future claims.

What is a Shortage Claim?

A Shortage Claim (SC) is a financial claim made by Amazon when the quantities stated in an invoice do not match the receiving data recorded at the fulfillment center (FC). In this case, Amazon assumes that less product was received than was billed and deducts the corresponding difference from the outstanding invoice amount.

The most common form is the PQV Shortage Claim (Purchase Quantity Variance). This identifies a discrepancy between the ordered quantity and the quantity actually received by Amazon. Another type, PPV (Purchase Price Variance), plays a much smaller role in comparison.

Origin and Process

A Shortage Claim is created when Amazon books in fewer units than were delivered according to the invoice. A Shortage Claim is typically created around five days before the invoice’s due date.

The Shortage Claim appears in Vendor Central in the Deductions and Credits tab. There, the full invoice amount is displayed under Invoice/Payment, while the Shortage Claim is listed as a negative value under Debit. It is identified by the invoice number with the suffix SC.

Amazon reviews every Shortage Claim within 35 days of its creation. If a booking error is found, an automatic reversal of the claim occurs. If the discrepancy remains, the deduction is considered confirmed. A vendor can only prove that the delivery was correct with evidence such as packing lists, waybills, proofs of delivery, and photos.

Causes of Shortage Claims

Shortage Claims can arise at various points in the supply chain. Often, the cause lies in discrepancies between the quantities actually shipped, received, and invoiced.

Errors can occur during packing, labeling, or shipping itself, for example, if cartons are incorrectly assigned or quantities are not recorded correctly. Likewise, goods-in at the fulfillment center can be booked incorrectly, for instance, due to counting errors or delayed recording. Transport damage or missing scans along the delivery route also lead to goods not being considered received. Incomplete or incorrect invoice data can also trigger Shortage Claims.

Impact on Vendors

Shortage Claims directly affect cash flow. Amazon deducts the disputed amount from the open invoice, which can lead to liquidity bottlenecks. In addition, the subsequent processing complicates financial reconciliation and creates additional administrative overhead.

If Shortage Claims occur regularly, they can indicate structural process problems – such as inaccurate master data, unclear responsibilities, or inadequate shipping controls. In the long term, such weaknesses not only lead to financial losses but also to potential chargebacks or reputational risks with Amazon.

Dispute and Re-Dispute Processes in Vendor Central

Vendors can dispute Shortage Claims in Vendor Central if they believe the goods were delivered correctly. The basis of a successful dispute is clear evidence. This includes packing lists, shipping documents, proofs of delivery, photos of the shipped goods, and delivery notes or waybills.

The dispute is submitted in Vendor Central under the Deductions and Credits tab. There, the vendor selects the relevant Shortage Claim, formulates a justification, and uploads documents. After submission, Amazon reviews the case and informs the vendor of the outcome. Structured documentation and consistent file naming accelerate processing and increase the chances of success.

If the dispute is rejected or only partially approved, a re-dispute can be submitted after a waiting period of up to 40 days. A maximum of ten cases may be combined per re-dispute.

Preventive Measures: How to Avoid Shortage Claims

Since Amazon’s check-in processes at the fulfillment center cannot be verified, the focus is on internal process security. The following measures help to significantly reduce Shortage Claims:

Correct Product Identification

Review the entries in the Vendor Central catalog and ensure that UPC and GTIN are correctly stored. Only one unique, scannable barcode may be present on each sellable unit. If the same barcode is also used on inner or outer packaging, it must be covered or removed. Each packaging level – single product, inner pack, master pack – requires a unique, non-reused barcode if it is sold or stored separately.

GTIN Gold Listing

The GTIN Gold Listing ensures that Amazon employees at goods-in can scan a product using the GTIN, even if the carton label is missing or illegible. This measure reduces the likelihood of goods being incorrectly booked as “not received.”

Clean Labeling

All cartons must be provided with an Amazon Carton Label or an SSCC label. These labels should be applied to a smooth, clean surface – neither over carton edges nor over folds. They must be clearly legible and not faded. Incorrect or missing labels are one of the most common causes of Shortage Claims.

Pallet Ordering Vendor Code

Apply for the Pallet Ordering Vendor Code so that Amazon places orders in full pallet units whenever possible. This reduces the number of carton labels required and lowers the risk of incorrect labeling.

Advance Shipping Notice (ASN)

Always create the ASN before the shipment arrives at the fulfillment center. If the actually delivered quantity differs from the PO, the ASN must correctly reflect this change.

Standardized Packaging

Avoid mixed pallets or cartons (Mixed SKUs). Each packaging unit should contain only one type of item. Standardized packaging significantly facilitates recording at the fulfillment center.

Conclusion

Shortage Claims are among the most common financial disputes in the Amazon vendor business. They usually arise from inconsistencies in the supply chain – from incorrect barcodes and incomplete shipping documents to discrepancies in goods-in at Amazon. Those who are aware of these risks and systematically counteract them can avoid unnecessary deductions.

Crucial is a consistent, documented process management: correct product data, clean labeling, timely ASNs, and complete evidence. A clearly defined internal workflow between logistics, accounting, and vendor management ensures that errors are detected and corrected early. This way, Shortage Claims can not only be reduced but also processed more efficiently if they do occur.

Frequently Asked Questions (FAQ)

How can I identify a Shortage Claim in Vendor Central?

You can find Shortage Claims in Vendor Central under the “Deductions and Credits” tab. They are listed as a debit memo with the suffix “SC” next to the invoice number.

When does Amazon create a Shortage Claim?

Amazon typically creates a Shortage Claim about five days before an invoice’s due date if the number of units received at the fulfillment center is less than the quantity stated on the invoice.

How long does Amazon’s review process take?

Amazon’s review process for a Shortage Claim takes up to 35 days. If their investigation reveals a receiving error, the claim is automatically reversed.

Which documents are needed for a dispute?

To file a dispute, you should prepare key documents such as packing lists, waybills, proofs of delivery (PODs), and photos of the shipment. For the best results, ensure all files are named consistently and clearly reference the relevant invoice number.

What is the best time to submit a dispute?

It is best to wait approximately 30 days after the claim is issued before submitting a dispute. This grace period allows Amazon time to process any late-arriving units, which can often resolve the issue automatically and prevent unnecessary work.

Can I file another dispute if my first one is rejected?

Yes, if your initial dispute is rejected, you can file a re-dispute after a 40-day waiting period. You can bundle up to ten individual cases into a single re-dispute submission.