What are Vendor Returns?
Vendor Returns occur when Amazon ships inventory back to the vendor per the vendor's accepted agreement with Amazon.
Why Do Vendor Returns Matter?
Vendor Returns are processed using automation, which means errors can occur without detection. These errors may include returns issued for the wrong reason, with incorrect cost details, or without a full shipment ever actually being received. When a return is inaccurate, you may pay for inventory you never got back or absorb a cost that isn't rightfully yours. Reviewing and disputing invalid returns helps protect your revenue and keeps your reconciliation accurate.
Why Do These Occur?
There are several reasons a vendor return may happen. These include inventory that is:
Damaged: The customer, warehouse, and/or vendor has damaged the product along the inventory sales cycle
Defective: The item has been reported defective due to manufacturing flaws, incorrect descriptions, or other issues
Expired: Products are past the expiry date
Overstock: Amazon has excess inventory, often due to low demand, forecast inaccuracies, or over-shipping
High Return Rate: As part of Amazon's High Return Rate Program Policy & FAQs, these are products that have high return rates for their product category and have been badged as Frequently Returned Items on the product detail page
Vendor Return Best Practices
Prioritize by validity tag: Start with "likely invalid" returns, as these have the clearest path to a successful dispute.
Batching: We encourage batching Vendor Returns together when they share the same return reason.
How Do I Dispute Vendor Returns?
The first step in disputing a vendor return is determining whether the return is valid, and if not, why. There are many reasons a return can be shipped back inaccurately:
Contractual: Products were returned that are not included in agreed-upon return types or definitions in your contract, returns are not authorized in your contract, or your contract is not appropriately set up
Invoicing: The return was processed with incorrect costs, discounts, and/or billing details
Product: The product was not returned in full (e.g., either missing units or pieces of the entire product), declared damaged or defective, but upon inspection is not, or was not sold by the vendor
Shipment: The shipment was either not received or partially received (e.g., Tracking shows 4/5 parcels delivered for a partial receipt)
How Does SPS Commerce Help with Vendor Returns?
There are a lot of different types and discrepancies that come with vendor returns, yet vendors must still be able to determine their validity in order to manage the returns appropriately. SPS Commerce has a solution that allows you to easily gather the information necessary when reviewing a return and dispute two of the most common Vendor Return types!
We support identifying validity for:
Shipment (Not Delivered) types that are either missing tracking information or were not returned to the Vendor
Invoicing (Unit Cost Mismatch) discrepancies between the unit cost price issued in the return and the PO unit cost
Every return is automatically tagged based on our validation checks, with a likely invalid, valid, or unknown validity tag. Vendor Returns can be disputed within 2 years (North America) or 5 years (other regions) of the return date. One Amazon requirement is to wait at least 60 days before disputing a return. This gives Amazon time to complete delivery or self-correct any processing errors, so you're not disputing something that resolves on its own.
To proceed with disputing a Vendor Return:
Go to the Vendor Returns tab, and under the New tab, sort by Invalid Amount.
We recommend disputing only the invalid returns.
Select up to 20 returns to submit in a single dispute, or select the details for the individual return you wish to dispute.
We recommend keeping grouped disputes below $50,000 dollars total dispute amount to avoid delayed resolutions.
The return reason for each return ID you are submitting will be pre-filled based on the suggestions below.
For Shipment, if you received none of the return, we suggest using Shipment - Have not received this return (none of invoiced quantity received).
For Invoicing, if Amazon issued the return at a cost that does not match the accepted order cost, we suggest using Invoice - Incorrect product cost.
If applicable, attach any additional attachments you wish to support your dispute.
Submit your dispute!