Your browser is out of date.

You are currently using Internet Explorer 7/8/9, which is not supported by our site. For the best experience, please use one of the latest browsers.

Three (or Four) Tips On How To Avoid Chargebacks

You know how aggravating receiving chargebacks can be. You send a shipment of products to a retail partner who then imposes an unexpected fee for an inaccurate EDI invoice, sending paperwork too late or for products packaged incorrectly. A chargeback of $100 for a simple mistake is not uncommon. Also called ‘expense-offsets,’ chargebacks are financial penalties for non-compliance with partner requirements. For some retailers, these fees have become profit-centers.

To avoid future chargebacks you need to pay attention to even the smallest details, strictly follow processes, properly train your staff, and maybe get a little outside help. Here are some areas to focus on:

1. Understand and Review the Compliance Requirements of Your Trading Partners

If you want to avoid penalties, you need to know where they’re lurking. Be aware of all the requirements of each of your trading partners and be ready to adapt to them. You never know where you might get tripped up.  For example, many trading partners will issue a chargeback when a purchase order and the invoice don’t match up, or for a product with an incorrect shipping label. Unfortunately, with last second shipment changes, add-ons, product shortages and more, it’s easy to make small mistakes if you don’t have the proper procedures in place. And try not to make the same mistake twice: many retailers penalize repeat offenders especially hard.

Most retailers will provide their EDI Requirements along with a Vendor Manual and a Routing Guide. Read them. Master them.

2. Send and Receive ASNs (Advanced Ship Notices) Immediately

Many trading partners require you to issue them an ASN within a certain window of time. That’s typically 24-hours before the shipment arrives. Hitting that window can be easy when its paired with a long shipping time. But some companies struggle when shipping times are shorter, such as when making a local delivery. For example, many companies batch their ASNs, but this practice puts those companies at risk for incurring late fees with local, faster shipments. A better practice is to send each notice as it occurs.

After your ASN is sent out you should receive an 997, or functional acknowledgement. This document not only is proof of receipt of your Advanced Shipping Notice, but also a reminder that you did, or didn’t, send it out in the first place. Get used to looking for them. Setting automated reminders to look for a receipt can be very helpful.

3. Pre-Stage the Shipment (if you can)

Another strategy you can implement to avoid chargebacks is by pre-staging each shipment. If you have the room, setting up a pre-staging area will not only help ensure that your shipment goes out on time, but that your invoices are correct. For example, if your order is going out on Saturday, pre-stage on Friday. An organized and pre-arranged staging will help keep your ASN accurate, especially during a potentially frenzied loading time, when last second changes may be made. Pre-staging will also alert you to product shortages in a timely manner, and then your EDI ASN can be altered to reflect them.

Train your team so that creating and updating the ASN becomes a habit.

4. Call Effective Data

Depending on the processes you currently have in place, avoiding chargebacks may be simple or challenging. But there’s one way to avoid these charges that is practically foolproof: call Effective Data.

We can help perform contract reviews on trading partner agreements, and then work with you to ensure you are aware of, and can adhere to, their requirements. We assist many companies that work with large big box retailers and automotive companies to improve their processes and to help them meet compliance requirements. We’ll make sure processes are being followed, ensure your ASN documents are being sent at the proper times, acknowledgements are received, and more.

For help avoiding continual chargebacks and other related problems, contact us.


Contact Us

company icon Our Company resourcesicon_resources.png icon Resources