Retailers have strict compliance policies, and even minor missteps can lead to costly chargebacks. If your team isn’t proactively managing compliance, you’re likely paying for unnecessary deductions.
Here are 10 common compliance mistakes that suppliers make—and how to fix them before they drain your profits.
1. Incorrect Labeling or Barcodes
Retailers have specific barcode and labeling requirements. If labels are placed incorrectly or barcodes are unreadable, shipments can be rejected or misrouted, leading to chargebacks.
Fix: Ensure compliance with retailer guidelines and use quality control measures before shipping.
2. Late Shipments
Retailers operate on strict schedules. If shipments arrive late, it can lead to hefty non-compliance fees.
Fix: Use real-time tracking and demand forecasting to avoid missed delivery windows.
3. Inaccurate Invoice Matching
If your invoices don’t match purchase orders, expect deductions. Pricing discrepancies, missing details, or incorrect quantities trigger automatic chargebacks.
Fix: Implement automated invoice matching to ensure accuracy before submission.
4. Poor Packaging Standards
If products aren’t packaged securely, they may arrive damaged—triggering retailer chargebacks and customer complaints.
Fix: Follow packaging guidelines and perform drop tests to ensure durability.
5. Misrouted Shipments
Shipping to the wrong distribution center or using an unauthorized carrier can result in chargebacks and delays.
Fix: Always verify routing guides and confirm shipment details before pickup.
6. Failure to Meet Fill Rate Requirements
Retailers expect suppliers to meet minimum fill rates (usually 95% or higher). If an order isn't fulfilled as expected, it triggers compliance deductions.
Fix: Optimize inventory management to ensure availability and fulfillment accuracy.
7. Ignoring Retailer-Specific Compliance Rules
Each retailer has unique compliance policies, and failing to follow them leads to deductions.
Fix: Train teams on retailer-specific compliance manuals and stay updated on policy changes.
8. Incomplete ASN (Advanced Shipping Notice) Submissions
Retailers rely on ASN data to track shipments. Missing or inaccurate ASNs can trigger automatic deductions.
Fix: Automate ASN submissions and ensure accuracy before sending.
9. Using the Wrong Freight Carrier
If a retailer mandates a preferred freight provider and you use an alternative, expect a chargeback.
Fix: Always confirm carrier requirements and use approved logistics providers.
10. Failing to Audit Deductions
Many suppliers accept chargebacks without question, assuming they’re valid. This results in lost revenue that could have been recovered. Fix: Regularly audit deductions and dispute invalid chargebacks. HRG specializes in this—let’s recover what’s yours!
Conclusion
Retail compliance mistakes cost suppliers millions every year. The good news? Most of these deductions are preventable. By addressing these 10 mistakes, suppliers can significantly reduce chargebacks and protect their bottom line.
Need help ensuring compliance and disputing unfair chargebacks? HRG has the expertise and tools to recover your lost revenue. Let’s talk.