Navigating Amazon’s compliance requirements remains as critical as ever for sellers. With evolving policies and increased automation in their supply chain, maintaining accurate and timely purchase order confirmation rates is crucial to avoid costly Amazon chargebacks. Let’s explore what this means for your business and how to stay compliant.
What Is Amazon’s Purchase Order Confirmation Rate?
Your purchase order confirmation rate is the rate at which you accept or backorder the units ordered. Amazon expects vendors to acknowledge (via POA or EDI 855) at least 80% of the ordered quantity for each item. Failure to do so will result in a chargeback of 3% of the cost of goods sold for each item you are not accepting or back-ordering.
The Role of POA Codes: Acceptances, Backorders, and Cancellations
To comply with Amazon’s standards, vendors use specific EDI POA codes to communicate item status. These codes fall into three categories: accepted, backordered, and canceled.
Key EDI POA Codes
Here’s how the codes translate to Vendor Central acknowledgment terms, including whether they result in a soft reject (chargeback applicable) or a hard reject (no chargeback but it may adversely impact Amazon’s ability to order the item in the future).
| EDI POA Codes | Vendor Central Acknowledgment Codes | Hard/Soft Reject | |
| AC | Accepted: In Stock | N/A | |
| IB | Backordered | N/A | |
| BA | Backordered: Not yet available | N/A | |
| BX | Backordered: Not yet published | N/A | |
| BR | Backordered: To be printed | N/A | |
| IR | Cancelled: Temporarily out of stock | Soft reject | |
| CA | Cancelled: Not yet available | Soft reject | |
| CQ | Cancelled: Does not meet minimum | Soft reject | |
| OS | Cancelled: Out of stock | Soft reject | |
| IR | Cancelled: Temporarily out of stock | Soft reject | |
| CK | Cancelled: Permanently out of stock | Hard reject | |
| CX | Cancelled: Never published | Hard reject | |
| CG | Cancelled: No geographic rights | Hard reject | |
| CB | Cancelled: Not our publication | Hard reject | |
| OP | Cancelled: Out of print | Hard reject | |
| CP | Discontinued: Obsolete | Hard reject | |
| KC | Cancelled: Considering reprint | Hard reject | |
| R2 | Cancelled: Invalid product information | Soft reject (but no chargeback) | |
| R3 | Cancelled: Temporarily suspend orders | Hard reject |
Understanding Amazon’s Chargeback Types
Amazon enforces various chargebacks for non-compliance. Here’s what to watch for:
1. Excessive Backorder Chargebacks
An Excessive Backorder chargeback occurs if you POA backorder more than 10% of the units on Amazon POs in any given week. They will also assess the volume of products placed on backorder if you regularly enter a backorder code instead of fulfilling a purchase order.
2. Unconfirmed and Late PO Units
Skipping or issuing late POAs is not an option either due to other chargebacks like Unconfirmed PO Units or Late PO Acknowledgements. Fortunately, while Amazon is not famous for suppliers being able to discuss matters with actual Amazon personnel, with Vendor Central they do now have a much stronger platform in place for testing and self-monitoring, as well as many experienced and capable implementation partners like us.
Leveraging Vendor Central to Monitor and Prevent Chargebacks
Amazon provides tools within Vendor Central to help vendors monitor performance and avoid chargebacks.
How to Access the Chargeback Tool
- Sign in to Vendor Central.
- Navigate to Help > Vendor Operational Performance (Chargebacks).
- Select Chargeback – Problem with PO > About Purchase Order Confirmation Rate.
Amazon has made it easier for vendors to test and self-monitor compliance. This proactive approach is critical to avoiding costly penalties.
MOST IMPORTANTLY, for doing business with Amazon or any truly customer-centric trading partner, continue to prepare your business for real-time, lights out trading, specifically:
- Integrate EDI or other B2B transactions directly with your systems for Order Entry / Inventory / Fulfillment
- Adhere to DWIAD “A Day’s Work In A Day” for realizing all other aspects of transactional activity in your systems
- Implement daily, accurate Inventory Advice Feeds like EDI 846s while incorporating reasonable calculations for safety stock
- Involve operations and sales to relentlessly incorporate processes and policies that support eliminating Chargebacks
- Leverage your hard-won learnings and hard-spent initial investments across the organization with as many partners as possible
Future-Proof Your Amazon Operations
Staying compliant with Amazon’s purchase order requirements isn’t just about avoiding chargebacks—it’s about creating a scalable, efficient operation that sets your business up for long-term success.
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