Retail is tough, but here’s a hard truth: it’s not always your sales numbers that determine success—it’s your cash flow.
Suppliers spend countless hours chasing new distribution, fine-tuning pricing, and optimizing supply chains. Yet, many don’t realize that one of the biggest threats to their financial health is hiding in plain sight: retail deductions.
Slow, unresolved deductions choke cash flow. They quietly drain working capital, limit your ability to invest in growth, and create a financial bottleneck that keeps you playing defense instead of offense.
And in 2025, with rising costs, unpredictable supply chains, and increased retailer scrutiny, getting your money back has never been more critical.
Here’s why deduction recovery should be your top priority—and how ignoring it could be your most expensive mistake this year.
The Silent Drain on Your Business
Imagine this:
You’ve landed a major retail contract. Your products are flying off shelves. Revenue should be strong—but something isn’t adding up.
Your books show millions in sales, but your cash balance tells another story.
Why? Because retail deductions—unresolved chargebacks, compliance fees, promotional costs, and logistical claims—are quietly eating away at your profits.
A staggering 5-20% of a supplier’s revenue can be tied up in deductions at any given time.
Some suppliers wait months—or even years—to recover what’s owed.
Cash flow delays force brands to borrow, cut budgets, or miss out on growth opportunities.
Sound familiar? You’re not alone.
How Slow Deduction Recovery Hurts Cash Flow
Deductions aren’t just annoying line items on an invoice. They create serious financial pain when left unchecked:
1. You Lose Working Capital (and It Adds Up Fast)
Retailers are quick to deduct, but slow to reimburse. This means your cash is tied up outside of your control, making it harder to pay suppliers, fund marketing, or invest in inventory.
Example: A beverage supplier had $400,000 in deductions outstanding for nearly a year—forcing them to delay launching a new product line. When they finally recovered their money, it was too late to meet retailer resets, costing them even more in lost revenue.
2. You’re Forced to Borrow (and Pay the Price)
When cash flow slows, many businesses turn to credit lines or loans just to stay afloat. But with rising interest rates, borrowing to cover operational costs is more expensive than ever.
Example: A food brand took out a $500,000 short-term loan at 12% interest to cover production costs after retailers withheld payments due to deductions. The cost of that loan? $60,000—money that could have gone to actual business growth.
3. Your Growth Slows (While Competitors Move Ahead)
Retailers don’t wait. You risk falling behind if you can’t afford to invest in innovation, marketing, or expansion.
Example: A home goods supplier was set to expand into a major retailer’s new stores but had over $2 million in unresolved deductions. Without access to that capital, they had to pause expansion—and their competitor grabbed the opportunity instead.
Why Deduction Recovery Should Be Your #1 Focus in 2025
With inflation, economic uncertainty, and increasing retailer demands, protecting your cash flow is mission-critical. Here’s how you can take back control:
Audit Your Deductions Regularly – Track every chargeback, compliance fee, and short payment to ensure they’re valid.
Act Fast – The longer deductions sit unresolved, the harder they are to recover.
Automate & Monitor – Leverage technology to track deductions in real-time and flag issues immediately.
Partner with Experts – Professional deduction recovery teams (like HRG) specialize in getting suppliers their money back—quickly.
Suppliers who take a proactive approach to deduction recovery recover up to 90% of invalid deductions.
Don’t Let Retail Deductions Hold You Back in 2025
The difference between thriving and struggling in retail isn’t just about sales—it’s about keeping the cash you’ve earned.
If unresolved deductions are draining your business, it’s time to make recovery a priority.
How much of your money is still on the table?
Need help to recover lost revenue?
Let’s talk. HRG specializes in deduction recovery so you can focus on growing your business.