Change in Shipping and Giftwrap Chargeback process for FBA orders

For Amazon fulfilled units under FBA program, Amazon determines a Shipping fee and Giftwrap fee to be charged to the customer (Clause F.10.2 of the Business Solution Agreement). The Shipping and Giftwrap fees between sellers and customers are tax inclusive and same are reported to the seller by Amazon. Amazon can charge seller a fee equal to the amount charged to the customer.

Currently, Shipping and Giftwrap chargeback amounts are calculated as total amount collected from the customer net of applicable taxes if any charged by the seller for their orders.

Effective September 5, 2018, Shipping chargeback and Giftwrap chargeback will be as below. The chargeback amount will be equal to the lower of:

1. Total Shipping/Giftwrap fee collected from the customer*; OR
2. Shipping/Giftwrap fee collected from the customer net of applicable taxes if any charged on customer order plus GST on Amazon fee

*includes GST on Amazon fee

Refer to the example below for further understanding.

Illustrative example:

• Shipping fee charged to customer inclusive of all taxes (A) = 40
• Product Tax Code (PTC) = 18%
• Current shipping chargeback (B) = Shipping fee net of taxes on customer order (B) = A/ (1+PTC) = 40/ (1+18%) = 33.9
• Shipping charge net of applicable taxes if any charged on customer order plus GST on Amazon fee (C) = 33.9 + 33.9*18% = 40.0
• Proposed Shipping chargeback amount (D) = Lower of A or C = Lower of 40 or 40 = 40

For more information on Shipping and Giftwrap chargeback, refer to order payment details page and Payment Settlement reports.

Order Payment Details page:

Payment Settlement Report showing Shipping Chargeback:

For any questions, contact Seller Support.

To provide feedback, write to in-fee-announce-feedback@amazon.com.

See also:

Tax Methodology