Chargebacks is an ugly 11 letter word

Join B2BGateway and DSI on February 16^th for a webinar to learn how your organization can be better prepared to avoid the dreaded chargeback!

In the 1970’s there was a huge rise in the large retail chain marketplace. Retailers like Walmart, Target, Best Buy and others recognized that their future success would depend largely on moving large volumes of inventory through their supply chains with maximum efficiency. So, these box-store groups began to invest heavily in automated warehouse and sophisticated systems that allowed the product flow from supplier to store to consumer with minimal human intervention.

When a non-compliant shipment comes in from a supplier, let’s say boxes with labels that cannot be scanned correctly, it becomes an exception that requires the manual intervention of the retailers staff and naturally added cost to the retailer to sort out.

Chargebacks became the retailers answer to controlling these exceptions and keeping their supply chains running as efficiently and smoothly as possible. When a supplier does not meet the terms of a retailer’s contract and the correct procedures are not followed, retailers can issue a charge back to cover the cost of the inefficiencies caused by an out-of-compliance-shipment. These chargebacks can be as much as 15% to 20% of an invoice.

To learn how you can put best business practice in place and avoid costly chargebacks which could be detrimental to your business join B2BGateway and DSI for a webinar on February 16^th at 1pm EST. Full details and registration here

What are chargebacks and how can I avoid them?

A chargeback is a fee that a customer (usually a retailer) places on a supplier for errors in not following the retailer’s business requirements. The chargeback was introduced to offset the extra cost the retailer incurs as a result of the supplier’s non-compliance.

 
Chargeback schemes began in the 1980’s as a way for retailers to recoup costs incurred due to supply chain errors. At the time, many suppliers objected to them as unfair profit centers for large, powerful retailers. Although purely punitive fines are not legal, cost recovery is—so chargebacks quickly became adopted by most retailers. It’s easy to understand how mislabeled, mis-packed, late, and wrong-quantity shipments add up to real labor costs and out of stock difficulties for retailers. Distasteful as they may be for suppliers, chargebacks make business sense for retailers in trying to recover costs and are here to stay for the foreseeable future.
 
What can lead to a chargeback being applied to my organization?

·         Early, late, or non-authorized partial delivery of goods or services.

·         Missing, incorrect, non-readable or wrongly placed shipping labels.

·         Substituting products without prior agreement.

·         Ship to incorrect location.

·         Product packaged wrongly according to retailers agreement.

·         Damages that did not occur during transit.

·         EDI 810 invoice not matching original purchase order and/or with wrong terms and details

·         EDI 856 ASN (Advance Ship Notice) does not arrive on time or does not match items in carton.

 
How can my organization eliminate chargebacks or at least reduce greatly the potential of receiving them from my customers?

·         Comply fully with customers EDI requirements.

·         Make sure labels are correct and can be read or scanned easily.

·         Do not substitute products without prior approval.

·         Ship to the correct location.

·         Pack items correctly according to retailer’s requirements.

·         Try to make sure goods arrive in perfect order.

·         Deliver the correct products, quantities and cartons

·         Send accurate and complete EDI 810 invoices.

·         Make sure EDI 856 ASN (Advance Ship Notice) arrives on time and details are correct.

 
To comply fully with your customers EDI requirements and business rules, I would recommend that you enlist the help of a good 3^rd party EDI provider. 3^RD Party EDI providers immediately know retailers requirements, what is expected and how they must be delivered. If you would like to know more about outsourcing your EDI needs to B2BGateway and how we can help you eliminate or greatly reduce potential chargebacks please call +1 (401) 491 9595 or email Sales@B2BGateway.Net

Label Gateway

Next time you find yourself wandering around your local Best Buy, stop for a moment and think about how all those products got to the store. They had to be packed by a warehouse, loaded into a truck, and driven to their destination. And you know that each one of those boxes have a shiny new UCC-128 Label slapped on there.

And it’s entirely possible, that the label that was on the box that got those products to the store was printed off of our Warehouse Site as part of B2BGateway.Net www.b2bgateway.net. We specialize each label to match the specifications required by the Trading Partner so our clients can be sure they have the information necessary go get that product off the loading dock and onto store shelves. Our labels have passed countless tests by the actual Trading Partners as well as third party testing services. Formatted to fit any normal 4”x6” label printer, they’re ready to go at any time off of our easy to use website.

So before you hit the checkout counter with your Die Hard box set or your phone case, take a moment to think about where those items came from before it made it into your hands.