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.
Whether it’s your first time outsourcing or you’re changing providers, partnering with a new third-party logistics (3PL) provider is an exciting time for your logistics operation. It is a time for your weaknesses to be turned into strengths and for vital elements of your supply chain to be optimized. As part of this, your 3PL will be focused on enhancing your performance in the eyes of your retailer partners, and meeting – and exceeding – your retail compliance requirements. And it all begins during the onboarding process.
Walmart’s relationship with its suppliers has made headlines recently as the retail giant implements its new On Time In Full (OTIF) policy that will dole out fines for late, early, and incorrect deliveries.
Are you receiving chargeback after chargeback after chargeback? Well, you are not the only one my friend. Companies can lose hundreds of thousands in profit if they do not resolve inadequacies in compliance.
Over the past few decades retailers have amped up their vendor compliance with a view to speeding their order-to-cash cycle times and making their distribution centers maximally efficient. When goods are not received before or after the expected date or contain errors in labeling the vendor is subject to a chargeback based on the percentage of the value of the shipment.
Seven of the most frequent chargebacks by category include:
Retailer chargeback fines for non-compliant shipments are a profit-draining reality for many consumer goods manufacturers.
Literally trillions of dollars in CPG merchandise is sold and shipped to retailers around the globe annually. The cost of research and development is enormous and you have successfully brought your quality products to market. Your brand is a household name and well recognized by consumers at the retail level. The margins are good but it seems that a percentage of your profit is left on the table. What can you do about it?
Chargeback penalties from large retailers continue to be a profit-draining problem, particularly for mid-sized companies that don’t have staff dedicated to vendor compliance management. But you can avoid chargebacks, or at least reduce them, by following some basic, technology-aided disciplines in the distribution warehouse.
Retail chargeback penalties for non-compliant shipments are a profit-draining reality for many CPG companies. But retail suppliers with the will and the right strategy can avoid hundreds of thousands, even millions, in penalties. Success requires creating a vendor compliance program, either internally or through a partnership with a third party logistics provider experienced in vendor compliance.
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