“If there are situations where the vendor is being charged back for things that are not valid, it may just be an honest mistake on the part of the retailer,” she says.īut don’t let fear of being accused of fraudulent practices prevent you from expecting vendors to pay for what it costs to fix their mistakes, Barry says. In some large retail organizations, Barry says, “they make chargebacks a profit center and look for every opportunity they can to charge back.”Īttain’s Butler believes few retailers are out to defraud vendors via chargebacks. The program itself should be fair and balanced. They absorb these costs, which they shouldn’t.”Įach multichannel merchant has its own system and special requirements for compliance, making it challenging for vendors to keep track of the myriad requirements. “The catalog industry has been slow to embrace this. “In fact, a lot of these concepts for chargebacks came out of large retailers, such as Dillard’s, Federated, the May Co., Wal-Mart, Kohl’s, and Target,” he says. Curtis Barry & Co., a Richmond, VA-based consulting firm specializing in operations. “The retail industry is much more aggressive in this area than the catalog industry in general,” says Curt Barry, president of F. Indeed, one problem that rests with the clients is that not all multichannel merchants have a formal chargeback program in place. Ideally merchants and vendors would work together so that both sides understand the terms and reduce the need for chargebacks. “If vendors simply study the retail manuals and enter the right information into their systems, they can significantly reduce chargebacks.”īut it’s not a one-way street. Most of these chargebacks “are completely controllable by the vendor,” observes Jessica Butler, principal of Ridgewood, NJ-based deduction management consultancy Attain Consulting Group, who worked with the Credit Research Foundation on the survey. errors in advance shipment notification (ASN) or electronic data interchange (EDI).freight and routing issues, such as incorrect carrier, incorrect ship-to location, and multiple same-day shipments.According to these companies, the top five compliance-related chargebacks are The Credit Research Foundation, a Columbia, MD-based organization that conducts research in the area of commercial credit and collections management, recently completed a customer deduction survey to which 424 vendor companies responded.

So to protect their interests and keep incoming inventory snafus to a minimum, merchants levy chargebacks, or fines against their vendors for not complying with agreed-upon requirements.

In a perfect world, merchandise deliveries would never arrive late, be mislabeled, or contain the wrong product or quantity.

Dillards vendor compliance manual