True or false: when a retailer issues a chargeback penalty to you, the fine is permanent and indisputable. 

In our experience as a 3PL provider, we find that chargebacks can be based on incorrect or incomplete information and are often worthy candidates for dispute. 

In this article, we’ll provide tips to help you fight these chargebacks and reverse unwarranted penalties. 

How to fight chargebacks

Here at Weber, every day we prepare and deliver orders for just about every mass retailer and grocery chain in the West Region.  We pay special attention to compliance with routing guides and other retailer-specific requirements (e.g., Walmart’s OTIF program).  As such, we become intimately involved when a customer is notified that they are not in compliance and a chargeback is issued. 

Through our experience, we recommend the following actions to successfully dispute your chargeback fines:

Document everything. 

Most of our ability to successfully fight chargebacks comes down to documentation.  Our systems track everything we do and allow us to retrieve information whenever there’s a dispute.  Here are a few examples:

• When a retailer says that an ASN was received late, we can find the time-stamped EDI records in our system and see that it was sent in time and without error, and that EDI acknowledgement from the retailer was received.
• When a retailer says there is a discrepancy between what was ordered and what was picked up by its carrier, we are able to provide a signed and dated bill of lading which shows the full order that was signed for.
• When a retailer’s carrier arrives to pick up 16 pallets and only has 4 feet of available space in the truck, we will take photos and share them with both retailer and customer. These photos and related documentation show that the issue was out of the customer’s control, which should prevent the retailer from issuing a chargeback and instead prompt scheduling of an additional pickup so that the customer doesn’t lose sales. 
• When a retailer or retail carrier says that its driver was detained at our facility for a long period, we can present the full day’s log and show the actual time that the driver signed in (every driver must sign in at our facilities).

In each of these instances, we typically provide the documentation to the customer, who can then work with the retailer to have the penalty reversed (we sometimes deal with the retailer directly, as well).  The data doesn’t lie.  And, by having the data on our side, we are often able to prove that a chargeback penalty is incorrect or based on incomplete information.  Without that proof, there is little-to-no chance of having chargebacks reversed. 

Proactively share information.  

In line with documentation is the proactive sharing of that information with retailers.  Issues need to be flagged and reported as they occur – not addressed retroactively when a chargeback hits.   This flagging and reporting can take several forms including emails to retailers, retail facilities and retail carriers, as well as submission of “tickets” on a retailer’s online portal. 

Let’s say that an order is scheduled to ship tomorrow, and we’ve tried to contact the retailer’s carrier to coordinate details for days but receive no response.  We will submit a ticket within the retailer’s portal and notify them of the situation as it unfolds.  So, if and when a problem arises with the carrier tomorrow, we will have a record – along with a ticket number from the retailer’s own system – of our advance notifications regarding the issue. 

While this proactive approach should prevent a chargeback from being issued, it likely won’t because the retailer’s system is automated.  A missed pickup automatically triggers a chargeback despite the documentation provided.  It is typically only when the chargeback is challenged that the logged information will be considered.    

Dedicate resources to chargebacks. 

Chargeback costs can add up to substantial amounts over time.  Because of this, some companies have in-house personnel solely committed to fighting these costs.  For other companies, this trade-off of costs may not be feasible.  The bottom line is that you’ll need resources – whether internal or external – to manage your retailer accounts and fight chargebacks. 

We’re a bit biased, of course, but 3PL providers can be invaluable assets in this regard.  At Weber, for example, we have a dedicated vendor compliance team that keeps abreast of retailer routing changes and updates stakeholders accordingly.  Our customer service and shipping & receiving teams also work in tandem to manage and monitor orders, log issues with retailers, and support customers when chargebacks are issued.  In short, many 3PLs have the staff and systems in place to manage orders and perform the legwork for fighting chargebacks on your behalf. 

The likelihood of reversing chargebacks

In our experience, chargebacks related to labeling are often the most difficult to reverse.  The labels either conform to the routing guide or they don’t.  And, when they don’t, the retailer will likely send photographic proof as part of the chargeback notification – leaving you with little room for dispute.  But there are exceptions of course.  For instance, there have been times where a retailer issued a chargeback because a label could not be scanned.  We simply printed the photo of the offending label from a regular office printer, scanned the label in the photo with an RF gun and, VOILA, it worked and the chargeback was reversed (NOTE: the chargeback won’t always be reversed in this instance, but it does happen). 

The bottom line is that chargebacks can be reversed if you have proof that warrants the reversal.  This requires systems to document key information and staff to act on it.  If you find that your operation is struggling to effectively fight chargebacks, contact Weber today to learn how we can help.