Code 59: Defective Merchandise Allowance (DM)
What is Deduction Code 59?
A defective merchandise allowance is a credit directly offset against returns (merchandise cost) from the store. A code 59 occurs when this allowance is listed on the supplier agreement but not included on an invoice.
How to Prevent Valid Code 59s
- Code 59s 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.
Can Code 59s be Disputed?
Yes, Walmart allows disputes for invalid Code 59s through 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 59s, they can be difficult to win.
The common scenario for invalid code 59s 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 59s
You can attempt a dispute in the Accounts Payable Dispute Portal (APDP). If that fails then send documentation to your buyer to request payback.
**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.
Written by The SupplyPike Team
About The SupplyPike Team
SupplyPike builds software to help retail suppliers fight deductions, meet compliance standards, and dig down to root cause issues in their supply chain.
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