How to Dispute Trade Deductions

In this article, learn about: 

• When and why to dispute trade deductions 

• How to dispute trade deductions at major retailers like Walmart, Amazon, and Target 

• What documentation you need to dispute deductions 

Trade deductions can come in a variety of forms when doing trade spend with retailers. However, it’s a common mistake to simply view all trade deductions as a cost of doing business. While many trade deductions are previously agreed upon and legitimate, trade deductions can also be taken in error.  

In this guide, we’ll dive into what to do about invalid trade deductions, disputing at major retailers, and best practices for avoiding deductions in the first place.  

Related Reading: The Difference Between Claims, Deductions, And Allowances 

When to Dispute Trade Deductions 

It’s helpful to think about trade deductions in different buckets, designating whether they’re planned, unplanned, valid, or invalid. In doing so, you can quickly identify which deductions require action and which can processed as part of normal operations. 

Budget: Planned and valid deductions, such as agreed-upon allowances, promotions, or freight credits, typically don’t require dispute. In fact, doing so may hurt your relationship with your retailer, as excessive disputing of valid deductions can reflect poorly on your business. Instead, these deductions should already be documented in your contracts or trade spend agreements. 
 
Prevent: Unplanned but valid deductions often signal inefficiencies or communication gaps. For example, a retailer may apply a valid deduction for a misapplied allowance or missing documentation. While these deductions don’t warrant dispute, they should be used as a lever to strengthen internal processes, double-check documentation, or clarify terms with retail partners to prevent recurring issues. 
 
Dispute: Any deduction that is invalid—whether planned or unplanned—should be disputed. Although it shouldn’t happen frequently, it’s possible for retailers to make a mistake in imposing deductions. Some examples include duplicate deductions or deduction amounts that don’t align with agreed-upon terms. In these cases, prompt disputing with supporting documentation is crucial to protect your profits. 

How to Dispute Trade Deductions 

How to dispute trade deductions will vary widely depending on the retailer you’re dealing with. Each retailer often has their own method of receiving and processing disputes. The below outlines what Walmart, Amazon, and Target’s disputing process looks like. 

Walmart 

Trade promotions with Walmart are often outlined in the Supplier Agreement in the form of allowances. Ideally, Walmart allowances are taken off invoice (OI) by the supplier, meaning they are not taken in the form of a deduction later.  

Walmart Allowance Deduction Codes 

 A common reason to receive an allowance deduction is by not accounting for a previously planned allowance on the invoice before you send it to the Walmart. In which case, the deduction is valid and not worth disputing.  

Related Reading: How Walmart Allowances Can Go Wrong 

Although allowance deductions are typically valid, there can be instances where an error has occurred on Walmart’s side. In these cases, the deduction should be disputed promptly, with as much supporting documentation as possible.   

How to Dispute Walmart Allowance Deductions 

Prevention and correction of the issues leading to allowance deductions is often the best way to address allowance deductions. Technically speaking, allowance deduction disputes can be submitted through Walmart’s APDP. However, Walmart has indicated that it’s not likely to approve such submissions. An alternative route is attempting to be repaid via your Walmart buyer.  

It’s important to weigh whether the deduction is worth bringing to your buyer. If the dollar amount is minimal or the documentation is incomplete, it may not be worth the potential strain on the relationship. However, for significant or clearly invalid deductions, reaching out to your buyer with complete supporting documentation can be an appropriate next step. 

When preparing to dispute an allowance deduction with your buyer: 

1. Consider your buyer’s workload, responsiveness, and your current business standing before escalating. 

2. Only pursue deductions you’re confident are invalid and supported by clear evidence. 

3. Compile all relevant documentation to substantiate your position. 

4. Group similar deductions and present them together, rather than submitting multiple individual requests. 

Important proof documentation to have on hand to dispute a deduction includes: 

• Invoice Number 

• PO Number 

• Allowance Deduction Code 

• Deduction Amount 

• Check Date 

• Check Number 

• Proof that the allowance was taken off invoice and on the correct invoice lines 

Amazon 

Amazon Co-Ops are planned in advance and therefore Co-Op deductions should be expected and budgeted for. Although they are a planned expense, Co-Ops should still be regularly audited to ensure there are no discrepancies.  

Amazon has a heavily automated process for handling Co-Op deductions. For this reason, it’s important for Amazon vendors to be diligent in checking that there are no errors that result in invalid Co-Op deductions.  

Some examples of discrepancies that can occur include: 

• Agreement-based issue: Amazon may apply a Co-Op charge using an expired agreement, an incorrect rate, or inaccurate terms. 

• Off-script negotiations: If a vendor and Amazon buyer negotiated exceptions—such as a grace period or adjusted rate—automation may still generate charges during that timeframe. 

• Duplicates: Rarely, Amazon may charge the same Co-Op amount twice for the same product, agreement, or time period. 

• Accrual mistakes: Accrual-based Co-Ops can be prone to rate or quantity errors.  

If errors do arise on Amazon’s side, it’s crucial to promptly document the issues and dispute any related deductions in Vendor Central. For a deep dive on how to dispute Co-Op deductions, please see How to Dispute Amazon Co-Op Deductions. 

Note: Disputing Co-Op deductions can be a time-consuming process. It’s crucial to verify that the deduction was in fact taken invalidly before proceeding with any disputes.  

Target 

At Target, deductions related to Target Vendor Income agreement are called Contract deductions. These deductions come through on checks and can be identified by document numbers starting with: VCNA, VSUP, VCPN, VONL, and VIAP. 

Target Contract Deductions 

As with other types of Target deductions, contract deductions have 24 months to be disputed. As with trade deductions at Walmart and Amazon, regular tracking is key to ensuring the deductions are taken appropriately. If these deductions are simply viewed as a cost of doing business, it’s possible to lose income you are owed to invalid deductions.  

Contract deductions are disputed through Synergy. Your dispute reason should call out specifically why the deduction is invalid. Be sure to attach proof documents to the dispute to support the reasoning behind why the deduction is invalid. 

How to Pull Backup Documentation in TVI 

It’s important to have the correct documentation to submit disputes. There are two ways to view or download backup documentation for Vendor Income Contracts created in TVI. You can access this information through TVI In-App Reporting by running the Contract Recap Report or through TVI Reporting (Greenfield) by generating the Contract Recap Settlement Detail Recap Report. 

Important documentation to provide includes: 

• Copy of Contract from Target Vendor Income (see above) 

• Email approval from the Target buyer for the payback of the invalid amount disputed 

• Other helpful info:  

  • For disputes with incorrect calculation: Attach sales data and/or calculations showing the correct contract deduction amount. 

  • For disputes when the deduction is a duplicate from another contract: Attach a copy of the duplicative contract from Target Vendor Income (TVI) and include the duplicative chargeback number in the description. 

Related Reading: What is Target Vendor Income (TVI)?