Code 55: New Location Allowance (SA or OL)

What is Deduction Code 55?

The new location allowance is defined by its placement on the purchase order and the supplier agreement.

Off Item Level of Purchase Order: (Defined as SA on Supplier Agreement)

1. Warehouse Merchandise: Allowance covering the initial stocking of a new warehouse

2. Store Level (even those routed through a warehouse): Offered only on orders placed prior to the grand opening date for a new store. Also applied to merchandise pulled by the new store from the warehouse prior to the grand opening date. (Typically between 5% and 10%)

Off Summary Level of Purchase Order: (Defined as OL on Supplier Agreement)

1. Designed to collect a percentage of every order in total and not only merchandise planned for new stores (typically between .1% and .5% or 1% and 5% based on supplier volume)

A code 55 occurs when this allowance is listed on the supplier agreement but not included on an invoice. 

How to Prevent Valid Code 55s

• Code 55s would only be triggered when there is an allowance listed on your PO and it is not listed on the invoice. Because these are only triggered when an allowance is given on your PO, Walmart tends to be difficult about disputing them except for a specific scenario. You should review your allowances before shipping your PO.
• Check with your EDI provider to make sure applicable allowances are being included on invoices, and in the correct place on the invoice.

Can Code 55s be Disputed?

Yes, Walmart allows disputes for invalid Code 55s though the Accounts Payable Dispute Portal (APDP) if you can prove that the allowance was actually given on the invoice. Otherwise, you will need to reach out to your buyer for assistance with a payback. While APDP technically allows disputes for code 55s, they can be difficult to win.

The common scenario for invalid code 55s is that your Supplier Agreement states that an allowance is supposed to be given off-invoice, but your EDI provider is actually giving the allowance off-line-item. In this scenario, the correct dollar amount is being withheld from the invoice, just from the wrong place. Disputing with your buyer and showing that the correct amount was already withheld can often overturn the deduction.

How to Dispute Invalid Code 55s

You can attempt a dispute in the Accounts Payable Dispute Portal (APDP). If that fails then send documentation to your buyer to request payback.

***Note
**Allowances are negotiated terms included in the supplier agreement or purchase order and will not be reviewed for repayment through the dispute portal. These deductions must be initiated with supporting documentation and approved by your buyer.