In this article, learn about:
How chargebacks work at Family Dollar and Dollar Tree
Common operational and compliance issues that trigger fees
Key steps for avoiding chargebacks across departments
How to dispute deductions with the appropriate contacts
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In 2015, Dollar Tree acquired Family Dollar for $8.3 billion. Just this year, it sold the company for $1 billion—marking a major shift in the value retail landscape. Since acquiring Family Dollar, Dollar Tree had operated the two brands under a shared corporate umbrella—yet many backend systems, supplier relationships, and compliance programs remained fragmented which resulted in Dollar Tree selling Family Dollar.
For suppliers, this transition creates an unusual dynamic: Family Dollar and Dollar Tree are still operating together in many ways, but their futures are diverging. Despite the planned sale, chargeback enforcement remains centralized under Family Dollar’s existing documentation and systems. In fact, many suppliers working with Dollar Tree are still expected to follow Family Dollar’s compliance guide and dispute process.
That means it’s essential to understand the chargeback policy—especially if you’re shipping into either company today. From labeling issues and missed appointments to OTIF penalties and shelf-life violations, chargebacks can have a direct impact on profitability if not carefully managed.
In this article, we’ll outline the key types of chargebacks issued across Family Dollar and Dollar Tree, explain where they typically occur, and offer strategies to prevent and dispute them.
Understanding the Chargeback Policy
Chargebacks are financial penalties issued when a supplier does not meet Family Dollar’s operational or contractual standards. These standards are put in place to ensure that product flows smoothly through the supply chain—from the time a purchase order is issued to the moment goods are delivered to a store or distribution center. When something goes wrong, chargebacks are used to offset the cost of fixing the issue.
Common triggers for chargebacks include:
Shipping product that arrives damaged or unfit for sale
Sending mixed SKUs in a single carton or failing to sort floor loads
Labeling errors that prevent efficient receiving at the distribution center
Delivering late or incomplete orders
Failing to follow transportation or scheduling requirements
Each of these issues adds time, labor, or risk to Family Dollar’s supply chain—and in some cases, directly affects store availability and customer satisfaction. Rather than treating chargebacks as arbitrary penalties, they are better understood as cost recovery measures tied to specific operational breakdowns.
The full chargeback policy is outlined in Appendix A of Family Dollar’s compliance documentation. This remains the guiding document for both Family Dollar and Dollar Tree suppliers. Even as the companies move toward separation, Dollar Tree suppliers are still expected to follow these shared standards.
Chargebacks are grouped into three main operational categories:
Distribution Center Operations (DC Ops): Issues that occur when product arrives at the warehouse, such as damaged pallets, mislabeled cartons, or sorting problems.
Transportation: Issues related to freight, including unused trailers, driver delays, or incorrect shipping documentation.
Merchandising and Product Compliance: Issues tied to product quality, shelf-life standards, or special handling requirements.
Each chargeback is assigned a reason code and penalty amount, typically based on the labor or cost involved in correcting the problem. Some chargebacks, such as those for adulterated product or OTIF violations, carry flat-rate fees, while others are time- and materials-based.
Distribution Center (DC) Operations Fees
Most chargebacks occur at the distribution center, where shipments are received, sorted, and prepared for store replenishment.
Common chargeback reasons include:
Reason Code | Charges Explained | Chargeback Amount |
ADLTRD | Product was found to be unsafe, contaminated, or otherwise unfit for sale upon arrival. This could include expired goods, damaged packaging that compromises safety, or exposure to hazardous materials. | $500 per incident |
HNDGLU | Boxes on the pallet were glued together, making them difficult to separate without causing damage. | $75 + $100/hr + cost of supplies |
CTNMIX | More than one product/SKU was packed into a single carton when each carton was expected to contain just one. | $75 + $100/hr + cost of supplies |
DESTRY | DC Ops had to destroy products due to safety, quality, or any other reason. | $75 + $100/hr + freight |
FLRMIX | Floor-loaded shipments were not pre-sorted by SKU or product type. | $75 + $100/hr + cost of supplies |
MISMTC | The information printed on the outside of the carton does not match the actual items inside. | $75 + $100/hr + cost of supplies |
PALLET | Pallets were damaged, broken, too tall, too heavy, or otherwise did not meet requirements. | $75 + $100/hr + cost of supplies |
PALMIX | The same product/SKU was not kept together on a pallet, creating inefficiencies at receiving. | $75 + $100/hr + cost of supplies |
WRNGDC | Product was delivered to a distribution center other than the one listed on the purchase order. | $75 + $100/hr |
CTNMRK | Cartons were missing required labels, such as item numbers, descriptions, PO numbers, or barcodes. | $75 + $100/hr + cost of supplies |
ITMMRK | Product or inner packs were not labeled correctly, or labels were missing altogether. | $75 + $100/hr + cost of supplies |
PCKLBL | Labels meant to remain on the product (e.g., holiday gift tags or branding) detached during transit. | $75 + $100/hr + cost of supplies |
PCKPLY | Required polybags (typically for garments or soft goods) were missing or incorrectly applied. | $75 + $100/hr + cost of supplies |
PPDPOD | For Prepaid Shipping: The shipment arrived without proper proof of delivery documentation. | $200 flat rate |
PRPPDN | For Prepaid shipments, if the DC must unload your truck, build pallets, or perform any stacking or unstacking that should have been completed prior to delivery, a lumper service is used—and the cost is billed back to the supplier. | Lumper fees (if not already prepaid) |
RTRNVN | This fee applies when product must be returned to the supplier. Reasons may include wrong shipments, damaged goods, or non-compliance with specifications. | $75 + $100/hr + freight |
RTRNWT | When the DC is holding product for return to the vendor but the supplier takes more than three days to provide authorization or instructions, a daily storage fee is applied. | $75 flat fee + $25 per day per pallet after 3 days |
SPPRJT | Any work that falls outside normal receiving, sorting, or compliance processes—such as special labeling, reconfiguration, or packaging updates—may be treated as a “special project.” | $75 + $100/hr + supplies (quoted as needed) |
How to avoid these fees:
Ensure pallets are stable, labeled correctly, and meet height and weight requirements.
Do not mix SKUs in cartons unless explicitly allowed by the PO.
Follow Family Dollar’s labeling guidelines exactly—this includes item numbers, descriptions, and inner pack details.
If floor-loading is necessary, SKUs must be pre-sorted before arrival.
Transportation Fees
Transportation deductions often apply to Collect shipments but can also affect Prepaid suppliers in specific cases. These charges are assessed when issues cause disruptions in the shipping process.
Common chargeback reasons include:
Reason Code | Charges Explained | Chargeback Amount |
TRLOAD | For collect shipments, if the carrier arrives and is required to load the trailer—rather than the supplier having the freight ready and staged—Family Dollar or Dollar Tree will pass the labor cost back to the supplier. | $75 + carrier charge |
TRDTL | If a driver is made to wait more than two hours at the supplier’s dock during loading, the supplier is charged for the delay. | $75 flat fee + $60/hour after 2 hours |
TRLABR | If the shipment is not properly blocked and braced—meaning secured for safe transit—the carrier may need to correct it before transportation. The associated costs are charged back to the supplier. | $75 + carrier or third-party charge |
TRTONU | A trailer was requested and dispatched but never used for loading. | $75 + $300 per unused trailer; after two instances in the same month, $200 + $300 each |
TRINFO | The shipment’s details (e.g., weight, class, volume, or destination) did not match what was submitted. This required freight to be re-rated, often at a higher cost. | $75 + difference in freight cost |
How to avoid these fees:
Cancel trailer bookings promptly if they are no longer needed.
Ensure all shipping documentation, including BOLs and weights, is accurate.
Use proper loading materials and secure items to prevent movement during transit.
Communicate with carriers to coordinate pickup times and avoid delays.
Merchandise Fees
Products arriving with insufficient shelf life can trigger significant penalties. These chargebacks apply primarily to food, beverage, and health or beauty categories.
Reason Code: FR
Chargeback amount: 20% of invoice value + handling or destruction costs
Family Dollar requires that products meet specific Guaranteed Shelf Life (GSL) thresholds at the time of delivery. For example, items with a 12-month shelf life must have at least nine months remaining upon receipt.
How to avoid:
Track expiration dates across all inventory locations.
Implement FIFO (first in, first out) inventory rotation practices.
Confirm GSL compliance before scheduling delivery appointments.
Notify your buyer if a shipment may fall short of freshness requirements.
On-Time and In-Full (OTIF) Program
Family Dollar’s OTIF program evaluates two metrics: whether a shipment arrives on time and whether it contains the full quantity of items listed on the purchase order.
Reason Code: VCOTIFOTIF
Chargeback amount: $375 per non-compliant purchase order
What triggers OTIF chargebacks:
Late arrival or missed delivery appointment (Prepaid shipping)
Shipment not ready for pickup within the expected window (Collect shipping)
Short shipments below the required 90% fill rate
Prepaid suppliers are responsible for scheduling and meeting delivery appointments. Collect suppliers must release inventory in OTM (Oracle Transportation Management - a transportation logistics system used by Family Dollar) at least seven days before the earliest ship date and ensure product is ready at pickup.
How to avoid these fees:
Track POs closely and schedule delivery appointments as soon as possible.
Build in lead time for transit delays and internal processing.
Monitor fill rates by PO and work with internal teams to avoid stockouts.
Confirm inventory readiness before the pickup window opens.
Disputing Dollar General / Family Dollar Chargebacks
Suppliers can dispute chargebacks by submitting documentation to the appropriate contact listed in Family Dollar’s Contacts Matrix. Each chargeback type is handled by a different team.
To dispute a chargeback:
Collect all relevant documents (POs, BOLs, photos, emails, OTM logs).
Determine the correct team (DC Operations, Transportation, or Merchandising).
Submit a formal dispute with a clear explanation of the issue and supporting evidence.
Monitor follow-up and maintain a record of all communications.
Key contacts:
Department | Emails |
Distribution Center Operations |
|
Merchandise - Guaranteed Shelf Life (GSL) | |
Transportation | |
Vendor Compliance (OTIF) |
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