The Unofficial Guide to Disputing Walmart OTIF Fines

2023-08-28
6 min read

OTIF: What We Know

In the past, OTIF fines used to be disputable only up until an invoice was received. Once suppliers were invoiced, Walmart claimed, suppliers could no longer dispute. Even still, some suppliers had success disputing after receiving an invoice. 

Later on, Walmart started using HighRadius as the primary means of processing supplier disputes for AR charges. 

Cost

A supplier is invoiced through HighRadius and is charged 3% of the cost of goods sold (COGS) on all non-compliant cases.

Walmart claims they will not charge suppliers for any Walmart-accountable, non-compliant cases, but human error on the receiving end means that there is no guarantee that every OTIF fine is valid.

Cadence

OTIF fines recur monthly. The recommended practice is to check the OTIF Scorecard weekly to catch projected fines before Walmart's invoicing.

OTIF fines are generally issued five weeks after the month's end. Month-end is based on Walmart weeks, not the regular calendar. See the Walmart FYE 2024 Calendar for important OTIF dates listed. So, projected fines posted at the beginning of February (i.e., Walmart weeks 1-3) are invoiced in HighRadius and published to the scorecard at the end of March (Walmart weeks 5-8). Invoice copies post to HighRadius within 72 hours of the billing.

The Dispute Process

Historically, there are essentially two channels to dispute OTIF fines: through your buyer or HighRadius. 

  1. Initially, buyers were the only avenue for disputing OTIF fines because HighRadius only functioned as a means of displaying OTIF fines. 

  2. Then Walmart created the capacity for disputing OTIF fines in HighRadius, but disputing with a buyer was still the recommended first step in the process. 

  3. Now, Walmart has emphasized using HighRadius exclusively as a one-stop-shop for reviewing and disputing OTIF fines. 

  4. Depending on the situation, there are still instances in which speaking with a buyer could still be beneficial and relevant for disputing. 

Disputing on HighRadius

HighRadius is the first line of defense against invalid OTIF fines. 

The only drawback of disputing on HighRadius is that your OTIF Scorecard will reflect the issued fine even if your dispute overturns. 

Previously, if an OTIF Fine appeared to be invalid, suppliers were encouraged to reach out to their Walmart buyers before that fine was officially invoiced. It is now recommended by most buyers to wait until the fine is invoiced and dispute through High Radius. The downside of this is that invalid fines will negatively impact your OTIF performance. Even if they are paid back through High Radius, your OTIF score won't change after the fact.  

Some suppliers still have success in communicating with buyers about removing fines before they are invoiced, but, again, Walmart's official policy does not recommend this approach anymore. It's also worth mentioning that buyer/supplier relationships vary from supplier to supplier, and so there can be no one-size-fits-all approach to this. The good thing about disputing through High Radius is that the buyer is not involved in reviewing disputes which should help with turnaround times for getting an answer. 

In a HighRadius dispute, provide any additional information that may support your claim. Our suppliers have noted that HOST PO numbers, item numbers, and charge type amounts have been helpful in HighRadius disputes.

After submitting a dispute, check back in HighRadius for the dispute status. Approved disputes are paid through HighRadius. Compared to Walmart's deduction program, HighRadius's response time is relatively quick.

HighRadius disputes push to dispute associates who determine the ultimate ruling on the dispute. A helpful rule of thumb for re-disputing after an initial rejection from HighRadius is "three strikes and you're out."

General Scenarios for Invalid Fines

OTIF measures the performance of the supplier and Walmart working together.

Suppliers should aim to meet Walmart's 98% OTIF goals to avoid all fines. There are two main buckets of accountability for OTIF fines: the suppliers and Walmart. Any fines received that appear to belong in Walmart's accountability bucket should be disputed too.

Walmart acknowledges that its growth and size create room for error in its internal processes and systems. While the retailer deploys its resources to make required adjustments, suppliers should dispute any fines bucketed into Walmart's accountability. OTIF fines can be incorrect.

A few typical, invalid In Full fines would be when:

  • ASN Shipped Amount > Walmart OTIF App Received Amount

  • DSS Received Amount > Walmart OTIF App Received¬†

  • Receiving error on Walmarts end where they received an overage for an item on one PO and a shortage on another that offset each other

Walmart also allows first-time suppliers a three-month grace period of waived OTIF fines. This grace period allows new suppliers to familiarize themselves with Walmart's systems. However, the OTIF Scorecard will populate so that new suppliers learn to leverage the application and can practice OTIF oversight. 

There are scenarios in which an OTIF fine is sent and responsibility lies with neither the supplier nor the retailer. Unpredictable inclement weather with widespread effect removes penalties from both Walmart and suppliers. Recently, a Walmart distribution center caught on fire, delaying and canceling orders. Rare, unpreventable events should not result in OTIF fines, but suppliers may see them affecting their OTIF scorecards and may even receive a chargeback.

Automated systems manage and execute OTIF fines and will not account for these events. If possible, proactively communicating with a buyer to correct these fines before hitting the OTIF Scorecard would be ideal. Your OTIF scorecard doesn't change despite approved disputes. Never assume your Walmart has the entire story behind fines, invalid or not. The best practice is to communicate early and research often to avoid unnecessary fines.

TL;DR OTIF Tips

  • First-time suppliers have a three-month grace period of waived OTIF fines.

  • Disputing in HighRadius is Walmart's recommended best practice.

  • OTIF fines invoices around five weeks after month-end.

  • When disputing In Full fines, we recommend waiting to dispute between 60-150 days after a fine has been invoiced; this allows more time for POs to be received properly and increase payback.¬†

  • Walmart applications don't always communicate with each other. Make sure to call out these discrepancies with your buyer.

Further Reading and SupplyPike!

Subscribe to SupplierWiki's newsletter to hear more about free content on subjects related to the retail supplier world!

SupplyPike helps suppliers maximize their cash flow and prevent retailer fines by providing oversight and insight into supply chain efficiency. Fight deductions, meet compliance goals, and analyze root causes with our software for Walmart, Amazon, Target, and Kroger.

Sign up for a meeting with the team to see if our solution is right for your retail business.

Related Resources

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.

Read More
The SupplyPike Team

About

SupplyPike

SupplyPike helps you fight deductions, increase in-stocks, and meet OTIF goals in the built-for-you platform, powered by machine learning.

View SupplyPike's Website