For retail suppliers, deductions can have a drastic impact on their bottom line. Deductions (also known as chargebacks) are the fines that suppliers receive from their retailers when a perceived issue has happened in the supplier’s supply chain. Anything from shortages in shipping to a price difference between a purchase order and invoice can trigger one of these costly charges.
Typically, these fines are in the single-digit percentage points of what a supplier invoices (amounting to potentially thousands if not millions of dollars lost). However, if there are deep-rooted issues with a supplier’s supply chain, such as not meeting the requirements for Walmart’s On-Time and In-Full (OTIF) program, deductions have no limit, and some suppliers have seen a 30% loss of what they invoiced.
The good news is that most retailers have programs where you can dispute the invalid charges that you have received. This process can be time-consuming, manual, and it can take months to resolve a single dispute; however, with proper preparation submitting a dispute is worth the effort.
Walmart allows for their suppliers to dispute, in some form or fashion, all of their deductions, but some fees are less likely to be approved than others.
Categorically, the deductions that have the highest approval rate are shipping related (For example, Code 22: Goods Billed not Shipped, Code 24: Carton Shortage/Freight Bill Signed Short, Code 25: No Merchandise Received for Invoice.
Walmart allows suppliers to dispute chargebacks based on the type of code. There are three main places that supplier can dispute a Walmart deduction:
Direct Commerce handles the bulk of disputing for Walmart’s deductions. Most codes (such as shipping, returns, and pricing) can be disputed on Direct Commerce. These codes are associated with Walmart’s Accounts Payable (AP) department; because of this, the owed amount is taken out of the supplier’s next check.
To view your deductions and begin the dispute process for Direct Commerce, visit: https://my.directcommerce.com/Login.jsp.
High Radius is a portal where you can dispute codes such as issues with OTIF: Code 99. These deductions are typically related to Walmart’s Accounts Receivable (AR) and are invoiced for the supplier to pay back.
For some deduction codes, suppliers need to reach out to their buyers in order to have the deduction redacted rather than disputed (for example, Code 11: Pricing Overcharge. These deductions are a result of a clause on your Supplier Agreement.
If a supplier believes that they have received one of these chargebacks in error, they should email their buyer with an explanation of why the fine is invalid.
To dispute a chargeback in Direct Commerce, some information needs to be collected from the deduction in Retail Link (listed in Retail Link under Claims in the Accounts Payable Inquiry System), and some additional information must be researched and provided by the supplier.
Note: The description is the supplier’s chance to explain to the auditor why the deduction is invalid, describe the documentation that is attached, and make a case for the dispute. Markdown with link: [![Alt Text](Image URL)](Link URL)
Documentation is essential when you go to dispute any deduction. It is important to gather any documentation that proves that the deduction is invalid. Almost all deductions need the original Purchase Order and Invoice (from your EDI service or Retail Link) and the Claim (directly from Retail Link).
The Claim from Retail Link shows suppliers reiterate on the amount, code, and quantity of deductions that they are disputing on.
For shipping-related deductions having a signed Proof of Delivery (POD) showing the correct items and quantities that were received from the supplier’s carrier will expedite the approval process. In regards to shipping related deductions, having the Purchase Order shows that the amount ordered matches the amount received on the POD.
Using the manual process described above can take up to 45 minutes per deduction:
When a company is dealing with deductions that equal 5% of their business, that can add up to hours a week.
SupplyPike has taken the manual processes of disputing a deduction and automated it. It is saving users, on average, 95% of the time it previously took to dispute a deduction with Walmart.
SupplyPike provides all of the required dispute information on hand. It’s no longer needed to go to Retail Link, pull reports from Decision Support and Accounts Payable Inquiry System, and stitch that information together.
Documentation is now a breeze with SupplyPike, where claim & shipping documentation (such as Bills of Lading and Proofs of Delivery), are collected and provided alongside your deduction information. This means suppliers can save time by not digging for the correct PDF inside of the carrier’s website (or worse still, their inbox).
With all of a supplier’s information and documentation ready for use, SupplyPike enables companies to clear charges quickly with one click disputing. Allowing for companies to no longer transpose the information from one website to another and attach documents, it all happens, like magic, with the click of a button.
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SupplyPike builds software to help retail suppliers fight deductions, meet compliance standards, and dig down to root cause issues in their supply chain.Visit their Website ➝