Retailers have found a way to make their problems your problem.
Chargebacks—those frustrating deductions retailers take for shipping errors, compliance issues, pricing discrepancies, and more—are quietly eroding profit margins. Many suppliers assume these are just the cost of doing business, but that mindset could be costing them hundreds of thousands, even millions, of dollars every year.
The worst part? Most chargebacks are avoidable. If you’re proactive, you can stop the bleeding before it starts.
What’s Really Behind Retail Chargebacks?
Chargebacks come in many forms, but they all share one thing: they take money straight from your bottom line. Here are the most common offenders:
1. Shipping & Delivery Errors
Late or early deliveries: Retailers operate on tight schedules. If your shipment arrives outside the expected delivery window, they’ll charge you for the inconvenience.
Missing or incorrect paperwork: A packing slip that doesn’t match the invoice? Expect a chargeback.
Shortages: Even if you shipped the correct amount, you could be responsible for the missing units if the retailer claims they didn’t receive it.
2. Compliance Issues
Labeling errors: Wrong barcodes, incorrect labeling, or missing GS1-128 labels can trigger chargebacks.
Packaging violations: Fees can result from too much or too little protective packaging, improper palletization, or non-compliant case packs.
Retailer-specific requirements: Every retailer has different compliance standards, and failing to meet them can be costly.
3. Pricing & Promotion Discrepancies
Invoice mismatches: If your invoice doesn’t match what’s in the retailer’s system, they’ll adjust the payment (and not in your favor).
Incorrectly applied promotions: Retailers expect promotional discounts to be applied exactly as agreed, and any variation can lead to deductions.
Unapproved pricing changes: If the price at the register doesn’t match the agreed-upon terms, expect a chargeback.
The Cost of Doing Business… Or a Preventable Drain?
Many brands write off chargebacks as just another cost of doing business. But let’s put this into perspective:
A supplier with $10 million in annual sales could easily lose 2-5% of revenue to chargebacks. That’s $200,000 to $500,000 per year—vanishing into thin air.
Some suppliers pay even more—up to 10% of revenue—without realizing it.
Now imagine what you could do with that money back in your business. More inventory. More marketing. More growth.
How to Stop the Bleeding
It’s time to go on offense. Here’s how:
Get Ahead of Compliance Rules – Every retailer has different compliance requirements. Create a retailer compliance cheat sheet for your team so they know exactly what’s expected.
Audit Every Shipment – Triple-check orders before they go out. Confirm correct labeling, accurate paperwork, and retailer-specific shipping rules.
Use Data to Identify Patterns – Are most of your chargebacks coming from the same issue? (e.g., barcode errors, late deliveries). Fix the root cause instead of just reacting.
Negotiate Chargeback Terms – Some retailers are more flexible than others. If you can show a history of compliance, you may be able to negotiate softer penalties.
Partner with an Expert – HRG helps brands prevent chargebacks before they happen and recover money from unfair deductions. If your team is stretched thin, bringing in a specialist is a no-brainer.
Retailers Will Keep Taking—Unless You Push Back
Chargebacks aren’t going away. But that doesn’t mean you have to accept them as a cost of doing business.
The smartest brands take control. They track chargebacks, dispute invalid claims, and optimize their operations to reduce preventable losses.
If you’re tired of watching your margins shrink, HRG can help. We specialize in chargeback prevention and recovery—so you can focus on growing your business.
Let’s stop the bleeding.