What Are Home Depot Chargebacks?
Each retailer refers to AP deductions differently. In Home Depot's case, these AP deductions are generally called chargebacks. Home Depot keeps its supplier accounting information in the Merch Payables Self-Service Portal (MP-SSP), This portal can be found in the Supplier Hub (supplierhub.homedepot.com) > Your Tools > Finance and Accounting > Merch Payables Self-Service Portal (MP-SSP).
Kinds of Chargebacks
There are only three chargebacks that Home Depot regularly turns over to their suppliers: Shortages, Pricing Discrepancies, and Trade Discounts.
Chargeback disputes are broken down into three categories (their statuses) in the MP-SSP: Draft, Open, Closed. Drafts are disputes that have been started and saved but not submitted yet. Open disputes are either pending Home Depot or vendor review. Closed disputes are disputes that Home Depot has already made a final decision on.
Shortages are the same everywhere, and they are almost always the most devastating form of revenue loss for suppliers across all retailers and varieties of supplier size from SMB to enterprise.
The reason code for shortages at Home Depot is simply *SHORTAGES.
The DOC Type for shortages in Home Depot's remittance download is Z0.
Pricing discrepancy chargebacks are when the supplier invoiced amount exceeds what Home Depot thinks the product should cost.
A "531 SKU Detail" report should be requested of the merchant in order to properly confirm the pricing (pack size and cost) via SKU-related data. Home Depot recommends requesting a 531 SKU Detail report once a quarter or whenever a cost change is executed in order to "synchronize cost, SKU, part number, UPC, and pack size" between the supplier and Home Depot.
The reason code for pricing discrepancies is similarly intuitive: *PRICING DISCREPANCY.
Trade Discounts are contractual and attached to individual M-Vendor numbers. At Home Depot this information can be found in the Supplier Buying Agreement (SBA): Vendor Account Management > Supplier Buying Agreement > Request a copy of your SBA agreement.
Trade Discount chargebacks can be found by mapping invoices with the correct trade discount amount. If you need assistance with invoice mapping, Home Depot provides the [B2B Production Support system] (B2B_Production_support@homedepot.com) (B2B_Production_support@homedepot.com).
Ideally, Trade Discounts should be taken from the total invoice amount when suppliers invoice Home Depot. The percentages should be mapped via their EDI when transmitting the invoice. If this number is incorrect, not taken from the invoice, or Home Depot believes that it wasn't correctly taken from the invoice, then Home Depot will create a chargeback.
Although these are negotiated in the SBA, they are taken out of the supplier invoice, which is why they qualify as chargebacks.
The reason code for trade discounts is also intuitive: *TRADE DISCOUNT.
DOC Type: Z0
At Home Depot, any shortage, price discrepancy, or trade discount over $25 can be disputed.
Step 1: To dispute a chargeback, go to Supplier Hub > Tools > Merch Payables -- Self-Service Portal (MS-SSP) > Activity Center > Dispute Chargeback Invoice.
Step 2: After clicking Dispute Chargeback Invoice, the last 12 months based on deduction date, sorted by invoice date, will be displayed along with the # Invoices and Total Chargeback Amount in separate columns:
Within a month is visible all of the individual chargebacks which are sortable by:
Dispute PKG #
Net Invoice Amount
Payment Number/Clearing Document
Approved Dispute Amount
Step 3: Before a dispute has been submitted on an invoice, most of these columns will remain blank. Once one has been selected the following fields required in order to submit a dispute:
Disputed Amount: amount that you want to dispute
There are more fields that are optional:
Freight Carrier: this consists of a dropdown list of Home Depot's "Core" carriers; if prepaid, the generic option is "Vendor Truck"
Tracking/BOL #: if the shipment changed carriers during its route, there is a checkbox here to add an additional tracking/BOL # (only one additional number is allowed)
Attachments: as many attachments (PDF only) as you want can be attached; there is a file size limit of 20MB/attachment; user and timestamp are tracked
Drafts can be saved and revisited, deleted, or submitted.
Step 4: After the dispute is submitted, you have to await a Home Depot response.
On Home Depot's site, they say that responses can take 10-14 days, but some edge cases have lasted up to 18.
Step 5: If the dispute is approved, it will be repaid on remit or open items within 5-7 days.
Whether the dispute is approved or denied, the Dispute Package Status will be moved to "Closed."
Step 6: If the dispute is denied, you can redispute (re-open) the dispute by creating an Open Dialog on the package in question.
Click on the "Send to Home Depot" check box if you want the message to go to The Home Depot.
Enter the message subject line.
Enter the message text in the blank text field below the subject line.
Click on |send| below the text field, or click on |clear| to clear the fields.
You can reply to the dialog message by replying to the message.
Suppliers can open a dialogue on a re-dispute as many times as they like. If after repeated denials for a dispute that you believe genuinely proves that the deduction is invalid, there is the option of using the Contact Us page for further escalation.
Useful Attachments to Add to Shortage Disputes
Along with the above, it may be helpful to consider the possibilities of dispute documentation in three categories (Good, Better, and Best, depending on the supplier's capacity).
In official Home Depot documentation, the following documents are required for best attempt at disputing a SHORTAGE:
In the case of Core carriers (Home Depot's pre-approved list), all that you need is the Carrier (selected from the drop-down) and one of the following:
This basic threshold for a dispute is only really applicable to shortages in instances in which the carrier belongs to Home Depot's "Core" list.
In situations extending beyond the above scenario, the following additional documents are preferred for a better attempt at disputing a SHORTAGE:
Additionally, suppliers have seen success when including these additional documents as well:
Photos of pallets
When possible, including all of the above suggestions should have the best results for winning back shortages.
In general, Home Depot has a shorter list of possible chargebacks (AP deductions) relative to other major retailers. However, as is also the case elsewhere, winning back invalid deductions can be tedious.
Establishing a tried and true method of dealing with chargebacks and prioritizing disputing can go a long way to retaining revenue for retailer sales.
Further Reading and SupplyPike's Solution
Did you find this helpful? Stay tuned for more content on Home Depot and other major retailers by subscribing to SupplierWiki's newsletter.
If you are interested in automating the dispute process for Home Depot or other major retailers, schedule a meeting to talk with a team member. SupplyPike offers a software solution to deductions, compliance, and root cause issues faced by suppliers across a variety of sizes and categories.
Written by Annalee Foley
About Annalee Foley
Annalee is a Product Manager at SupplyPike. She helps our team build quality products for our customers by driving efficiency and optimizing processes.Read More