Brace yourself—Walmart suppliers are in for a shake-up in 2025. If you thought deductions were already a headache, get ready for a whole new level of complexity.
Walmart is moving from a quarterly reconciliation of deductions to a monthly cadence. That means deductions will happen faster, more frequently, and automatically, giving suppliers less time to identify errors, dispute invalid claims, and recover lost revenue.
But the real kicker? Damages are now being lumped in with defectives—which could mean suppliers are on the hook for in-store mishandling, not just manufacturer-related issues.
Let’s break down what’s at stake and, more importantly, what you can do about it.
More Frequent Deductions = More Opportunities for Mistakes
Think back to your last quarterly deduction review. You may have noticed a spike in chargebacks from a specific distribution center or discovered an unexpected pattern tied to a seasonal promotion. You had time to investigate, identify the root cause, and dispute errors.
Now imagine dealing with that every month—on top of everything else your team juggles. It’s going to get messy.
Invalid deductions are already a billion-dollar problem for suppliers. In some categories, as many as 15-20% of deductions are invalid—yet many suppliers don’t dispute them because of the time and resources it takes to fight back. Walmart knows this.
The reality? If you don’t have a plan in place, you’ll leave a lot of money on the table in 2025.
The Hidden Cost of “Automatic”
Here’s where things get even trickier.
Let’s say a deduction is invalid. You catch it, dispute it, and win. Great, right?
Not so fast. Walmart isn’t required to pay you back immediately. That money could sit in limbo for months, and you won’t be compensated for the time they held your funds. Meanwhile, you’re dealing with cash flow constraints, operational slowdowns, and potential pricing pressures because of the unexpected losses.
And what happens if your account goes into debit balance? Some suppliers are finding themselves in situations where they’re shipping products to Walmart but not getting paid because deductions have wiped out their receivables.
That’s not just a deduction problem—it’s a business risk.
What You Can Do Now
With 2025 around the corner, the most successful suppliers will be the ones who plan ahead.
Here’s how:
Audit Your Accounts Receivable (AR) Now
Take a hard look at your current deduction trends, cash flow risks, and reconciliation processes. Identify where deductions are coming from and how quickly your team can verify their accuracy.
Develop a Monthly Dispute Strategy
With deductions happening faster, your response time needs to match. That means having a dedicated team (or a partner) to quickly identify and dispute invalid deductions efficiently.
Track Damages vs. Defectives Closely
Suppliers need to be proactive in differentiating in-store damage from actual product defects. If your products are being mishandled at the store level, you shouldn’t be footing the bill.
Get Expert Help If your internal team isn’t equipped to analyze and challenge deductions at scale, it’s time to bring in reinforcements. HRG specializes in digging into the root cause of deductions, recovering lost revenue, and helping suppliers stay ahead of these changes.
Don’t Let Walmart’s New Policy Cut Into Your Profits
The bottom line? Automatic deductions don’t mean accurate deductions.
Walmart is prioritizing its cash flow—so suppliers need to protect theirs.
2025 will bring more complexity, disputes, and financial pressure. But the good news is that the suppliers who take action now will stay profitable and competitive in the face of these changes.
Is your business ready? HRG is. Let’s make sure you are, too. Contact us.
Learn more about Walmart’s changes from Al Frank and Boyd Evert on a special edition of the Saavy Supplier podcast.