How Merchants Can Avoid Disputes on Amazon’s Biggest Shopping Day

Yes... it’s that time of year Prime Day 2024

We’re talking about Prime Day, of course. The shopping holiday runs from July 16-17 this year, with thousands of special deals coming in the days dealing up to primetime.

The annual Amazon shopping bonanza is one of the most anticipated online events of the year. Millions of shoppers will be on the hunt for deals; according to Amazon, the first day of the sales event in 2023 was the single biggest sales day ever for the company. Prime members purchased more than 375 million items just in that 24-hour period.

For their part, shoppers saved more than $2.5 billion on discounted items. When polled last year, 68% said they already planned to come back to shop on Prime Day 2024 as well, according to JungleScout’s Consumer Trends Report.

For sellers on the Amazon Marketplace platform, Prime Day is a golden opportunity. According to projections from Emarketer, total retail spend during the event will reach $13.8 billion; a 5.9% increase over last year. And, while shoppers may choose to spend a considerable amount with the mega-retailer directly, suggest that consumers will spend roughly $5.62 billion with Marketplace sellers during the Prime Day sales event.

Prime Day presents an incredible chance to boost sales and acquire new customers. But, as we’ll see, there could be some negative ramifications here, too, that merchants will need to watch for.

Primetime for Fraud & Chargebacks

The high volume of purchases during Prime Day means that operations could be stretched thin, especially for small- and medium-sized businesses, who probably have fewer resources. This means the risk of transaction disputes and chargebacks will be high in the weeks after the event.

First, there’s customer service. Sellers are probably going to see an increase in inquiries and complaints during a major sales event like Prime Day. According to the JungleScout report cited above, 51% of customers will try to contact a seller directly about an issue they experience, rather than going through Amazon’s official customer service channels. If merchants aren’t prepared to meet the surge in calls and emails, they could be in trouble.

There’s also the potential for shipping delays, out-of-stock items, or other logistical issues. Problems like these could result in negative customer experiences, which would be especially problematic when customers expect fast and reliable delivery, as Amazon shoppers tend to do. The result could be serious damage to a seller's reputation on the platform, in addition to the resulting chargebacks.

Finally, there’s the big elephant in the room: fraud detection. As sales volume increases, so does the potential for fraudulent activity. While Amazon has robust fraud detection mechanisms in place, it’s still possible that some fraudulent orders could slip through undetected. This would lead to more chargebacks and disputes, further damaging sellers’ relationships with customers.

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Best Practices for Prime Day Perfection

If you’re a merchant on the Marketplace platform, I’m sure you’re already taking steps to prepare for the influx of orders. You might be inventorying items, running speed tests to ensure your servers can handle the load, or conducting any one of hundreds of pre-Prime Day prep tasks.

But, I want to drive this point home: it's crucial that you incorporate strategies to maximize customer satisfaction. This is going to be the key to maintain a healthy relationship with shoppers and avoid reputational and financial damages.

Some best practices that I’d recommend include:

Clearly Stating Terms & Conditions

You’ve got to provide clear, thorough, and precise product listings, along with detailed terms and conditions.

Make sure that all product descriptions and images are current and accurately reflect what the customer is buying. That way, you can defend yourself if a customer raises a dispute about a product being “not as described.” Also, make a point of emphasizing key features, supplying exact measurements of the product’s size, and including high-quality images from multiple angles. Accurate listings help set customer expectations and avoid misunderstandings.

Providing Excellent Customer Service

You want to nip potential problems in the bud before they turn into disputes. Attentive and supportive customer service is the key here.

Make sure your customer support team is staffed and ready to handle the surge in inquiries during Prime Day. Provide multiple contact methods for customers; we’re talking email, phone, live chat, chatbots, etc. And, critically, be sure to respond to customer inquiries in a fast, courteous way to foster trust and loyalty.

Putting Fraud Prevention Measures In Place

Like I mentioned above, the spike in transactions on Prime Day is going to attract fraudsters. They know you’re preoccupied on high-volume shopping days like Prime Day. They also know that every merchant has key vulnerabilities and weaknesses they can exploit.

I’d suggest a strategic approach to fraud detection. We’re talking about tools to track and identify suspicious activities, along with best practices aimed at identifying and fixing those vulnerabilities I mentioned.

It’s important for these fraud detection measures to be clear-cut, but adaptable. Fraud detection parameters that are too stringent can lead to false declines, meaning you lose legitimate sales. Train your staff to recognize typical fraud signs and ensure they adhere to best practices for validating buyers.

Communicate Clearly with Customers

We already touched on the need to provide good customer service, and to communicate your terms to your buyers. But, you really can’t overlook the importance of clarity as a way to stop disputes and chargebacks.

I’m talking about informing customers about shipping schedules and return procedures. Sending confirmation emails, including tracking details, as soon as a purchase is completed. Providing regular updates about the status of buyers’ orders. Keeping customers appraised of any possible delays.

All of these practices play a part in stopping chargebacks. Transparent communication helps manage customer expectations.

Make this Prime Day a big success.

Prepare for Post-Prime Day Returns

It’s not unlike your seventh-grade science class: “for every action, there is an equal and opposite reaction.” When you see a surge in sales, expect a corresponding surge in returns and exchange requests to follow.

Ensure you have a transparent and customer-centric return policy. Also, prepare your staff to manage the increased volume, so they can process returns and refunds as quick as possible. Customer happiness is your north star if you’re trying to reduce the likelihood of chargebacks.

Monitor & Manage Chargebacks

You might consider using chargeback prevention and management solutions to keep an eye on your transactions. For example, chargeback alerts.

Alerts can let you know about pending disputes before they escalate into chargebacks, helping avoid associated fees and penalties on your Amazon account. Additionally, implementing a system to collect and scrutinize chargeback data can help identify both chargeback abuse and friendly fraud; issues that, according to Visa, make up as much as 75% of all chargebacks.

Track Customer Reviews & Feedback

Get this: 95% of customers read online reviews before buying a product. Not only that, but negative reviews can also impact your seller rating on Amazon, which can influence your ability to win the Buy Box and ultimately drive sales.

You need to keep tabs on what your customers are saying about you, as well as your products and services. Address any issues promptly to avoid penalties or suspension. Keep an eye on customer feedback and reviews, and take corrective actions to resolve any negative experiences. Remember that happy customers are less likely to initiate chargebacks.

A Prime Opportunity

Prime Day is a golden opportunity for sellers. But, it’s important to be prepared for potential returns and chargebacks.

By implementing transparent communication practices, having a solid return policy in place, and utilizing chargeback prevention solutions, you can minimize these risks and ensure a successful Prime Day. With proper preparation and management, you can take advantage of Prime Day's potential to boost your sales and grow your business on Amazon. Happy selling!