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West Coast and California Logistics Blog

Review Your Warehouse Technology to Reduce Chargebacks

Wed, Jan 22, 2014 @ 09:00 AM / by Mimi Ma

It’s a new year, and with it comes a new cycle for chargeback deductions.  Hopefully, if previous errors do not reoccur and the wrongs have been righted, then vendors stand a better chance of warding off chargebacks for 2014. 

If your primary focus in reducing chargebacks has been keeping human errors at bay, you may want to refocus efforts on the errors that can arise from an overlooked system or automated function.

warehouse technologyWe rely enormously on technology to help streamline warehouse processes and create efficiency gains, but often we take these automated processes for granted.  Sure, you may encounter an occasional system bug or glitch that you can’t prevent.  But what happens if there is an oversight in coding an application?  What happens if a retailer updates or makes revisions to their label, paperwork, or EDI requirements and that information fails to pass on to the parties responsible for making the warehouse system changes?  This kind of oversight can lead to hundreds or thousands of dollars in chargeback deductions.

To ensure that your technology continues to deliver and not present you with that surprise chargeback, conduct a periodic review of your automated and pre-programmed solutions for vendor compliance.  UCC-128 label specifications and paperwork requirements may change over time.  If you have these items designed to auto-map data to generate compliant labels or paperwork, it’s essential to have that mapping done correctly.  A retailer can change something as small as a character length requirement of a Store/Unit number present on a label.  A change this small has large consequences, in terms of chargebacks, due to the high impact of printing numerous labels.

Here are 8 technology-linked requirements for vendor compliance that would benefit from a periodic review:

  • Make sure retailer item, GTIN-14, SSCC-14 item setups in your system correspond with what is set up in the retailer’s system
  • Check the character length of store/unit codes on UCC-128 labels
  • Check Quiet Zone data on UCC-128 labels (i.e. dept. number, dept. description, product group, product type)
  • Make sure barcodes on UCC-128 labels are fully scannable and are not getting cut-off
  • Check reference field data on UPS or FedEx labels (i.e. store/unit number or other data appearing in Reference Field 1)
  • Correct format and character length of load authorization or routing confirmation numbers on Bills of Lading and in the 856 (ASN)
  • Check special notes or ancillary information required on Bills Of Lading
  • Correct format and character length of carrier SCAC and PRO numbersCheck required data elements on the packing lists (i.e. freight/payment terms, PO number, consignee sku, UPC)Ensure proper assignment of third party or collect billing account numbers and addresses for small package and LTL shipments

You might have the most aggressive audit procedures for vendor compliance, but if your systems are not programmed correctly, with proper alignment to retailer requirements, you are vulnerable to chargebacks. 

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Topics: Warehouse Rates, Warehouse operations, Chargebacks

Written by Mimi Ma

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