In this article, learn about:
Kohl’s compliance expectations for vendors
Compliance best practices with Kohl’s
Disputing Kohl’s compliance deductions
For vendors working with Kohl’s there is a lot to keep track of, from navigating two separate portals, to deciphering compliance expectations. This article provides vendors with an overview of the primary compliance categories that Kohl’s tracks through its scorecard system, how to read the scorecard, some general compliance best practices, and ultimately how to dispute invalid chargebacks though Kohl’s Traverse portal.
Kohl’s Compliance Program
Kohl’s compliance program is tracked through the Kohl’s vendor scorecard. Kohl’s tracks and calculates a supplier’s compliance through its Vendor Scorecard on the K-Link portal.
On the homepage, vendors can find their scorecard under the Analysis option on the lefthand menu. Under Analysis, suppliers can find both the scorecard itself, as well as scorecard reports.
The main areas Kohl’s tracks for compliance are Fill Rate and Shipping Performance.
Fill Rate is defined as Kohl’s expectation that shipments are 100% complete and shipped within the expected timeframe.
Shipping Performance encompasses shipment creation, Purchase Order compliance, and routing:
All shipments are expected to be consolidated and shipped once per week to one Distribution Center (DC).
All shipments should be created 5 days before the ship date listed on the PO
All shipments must be ready to pick-up at the earliest possible option within the allowable time window.
Kohl’s has scores associated with each category they lay out in its scorecard. Meeting these scores gets vendors to Certification, which is the highest achievable score through Kohl’s compliance program and is achieved through a score of at least an A or B. Total optimal scores in each category, laid out under the next section, equal a total score of 100.
There are two main reasons for vendors to try to achieve certification:
Priority from Kohl's in getting their products on the retail floor.
Vendors who reach Certification can be confident that they will not be subject to post-audits.
Kohl’s Vendor Scorecard
The scorecard has 5 different tabs to indicate various functions of tracking compliance. The Main tab shows an overview of the vendor’s scores per month as well as a list of each individual score per category:
Fill Rate Received as Ordered
As long as vendors ensure, to the best of their ability, that all shipments are shipped on time and in full, then they will score well in this category.
The score goal for this category is 15, and the Main tab on the scorecard will list this under Optimal Score next to the score for the vendor under This Year YTD.
Compliance Dollars: Percent to Cost Receipts
This section refers to the most common type of compliance infraction: shipping, packaging, and preparation. The score for this category is calculated by taking the total in compliance charges and dividing it by the total costs associated with this category.
Vendors should make sure that their compliance in this area falls at or under 0.7% to get the highest possible score. The optimal score for this category is 20.
Audit Failure Rate: Percent Total
For this category, vendors must ensure that the Advanced Shipping Notice matches the physical contents of the associated shipment. Kohl’s audits this regularly, and shipments are considered a “failure” if they do not match within a specific threshold.
For vendors to score well in this area, and achieve Certification, their “failed audit” percentage must be at or less than 1%. A perfect score in this area is 20.
Shipping Performance: Average Days Routing Per Week
Shipping performance encompasses on-time and in-full expectations and PO requirements. This includes adherence to pick up window expectations. In order to reach certification status, vendors must achieve a score of 30 (between shipment creation and shipment pick up) and have zero errors.
The next tab listed on the scorecard is Cost Receipt. This section lays out the following:
Total amount paid to the vendor per year
How each year ranks in regard to compliance
The percentage of receipt change per year
The number of units ordered per year
The number of units verified by Kohl’s each year
The other tabs on the scorecard are titled PO, Audit, and Shipping, and lay out further details for the vendor to review regularly to ensure that they are compliant in relation to PO and shipping expectations, and how they hold up to Kohl’s compliance auditing.
For additional resources, vendors should review the scorecard reports listed under Scorecard Reports on the K-Link portal.
Related Reading: Kohl’s Vendor Portal: Navigating Orders During Seasonal Events
Compliance Best Practices and Common Mistakes
Kohl’s vendors might be spending valuable time tracking their compliance scores, at the expense of time spent ensuring that their processes are not costing them in the long run with compliance deductions.
As with any retailer, there are some best practices vendors can focus on with Kohl’s to help keep their supply chain running smoothly and ultimately prevent profit loss from noncompliance.
Compliance Best Practices with Kohl’s
Understand EDI: Kohl’s uses Electronic Data Interchange for documentation, so it is important for vendors to understand the language of EDI and ensure that all documentation adheres to EDI standards.
Keep documentation organized: Ensuring that all documentation is well organized and easily accessible is imperative for smooth operations, and also for disputing invalid deductions. There are systems available to suppliers to ensure that documents do not get lost in the shuffle.
Scour Kohl’s Routing Guide: Suppliers should spend time reviewing Kohl’s policies and procedures, primarily their Routing Guide, to ensure that they are meeting standards on the front end to prevent issues later on.
Automate where possible: Investing in automation to streamline processes can help prevent issues caused by human error.
Run a scorecard audit: Kohl’s vendors may find it helpful to have consistent and regular check-ins with their compliance scores via their Kohl’s scorecard. By running regular audits, vendors can ensure they know their weaknesses and can adjust accordingly.
Common Compliance Mistakes with Kohl’s
Beyond the common mistakes vendors may make with any retailer—namely, packaging issues, late delivery, and shortages—Kohl’s vendors may face additional frustrations when it comes to documentation.
While EDI does assist vendors in maintaining document consistency between themselves and Kohl’s, occasionally incorrect documentation may be pulled as proof for an invoice deduction or chargeback. In the same vein, vendors may mistakenly attach incorrect documentation to dispute a chargeback.
When it comes disputing chargebacks, it is important to ensure that the proof documentation is correct. This way, the vendor can review the compliance chargeback and determine if it is valid or invalid, without the added frustration of the dispute being immediately denied due to incorrect documentation.
Should the documentation error fall on the Kohl’s side, as can be unfortunately common, vendors should communicate early and regularly with their contact at Kohl’s to get this corrected as soon as possible.
Compliance Deductions and How to Dispute Them
Some of the most common reasons for Kohl’s vendors to get hit with compliance chargebacks are due to:
Mismatched shipment with ASN
Late shipments
Late pick up
Late PO
Related Reading: Kohl’s Invoicing and AP Deductions Guide
Disputing Kohl’s Compliance Deductions
Should Kohl’s take invalid deductions when paying the invoice, vendors have 6 months from the date the invoice was paid to dispute the deduction. Kohl’s vendors can dispute deductions via Kohl’s Traverse portal. Keep in mind that this is a different portal than K-Link, where vendors can find helpful documentation and reports.
On the lefthand menu on the Traverse homepage, under Vendor Tools, select Create Disputes. The first step once there is to search for the specific charge number. Once found, the vendor must fill in the section titled Dispute Details with the following information:
Any relevant dispute details
Supporting documentation (Bill of Lading (BOL), Proof of Delivery (POD), copy of invoice, etc.)
Comments as needed (this is not an optional field)
Once everything is filled in and all necessary documents are attached, the vendor will hit submit and await a response to the dispute.
In the past, when disputes were done through email, Kohl’s vendors could expect to receive a response to the dispute within 10 days. While this may not still be true, it is important for vendors to check in on the status of their disputes regularly and reach out to their contacts, as needed, for updates.
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