New Resolution for Retailers in 2016: Take Charge of Your Chargebacks

How many errors and chargebacks are going through your distribution centers or system unchecked during this holiday season? There’s a significant chance it’s more than you expect. Consider the cost incurred when shipments arrive on incorrectly stacked palets, ASNs arrive invalid or late, and cartons have unscannable barcodes.

All of this can be costing you millions. Based on our insight into the retail industry and speaking with our customers, on average 2% of your retail sales revenue is offset by chargebacks. Say, for example, your annual sales revenue is $5 billion and 50% of that revenue is earned during the holidays. That means you are experiencing $50 million in errors and chargebacks every year.

What’s your estimated total?

If you don’t have a complete deduction management process then it’s likely to be much higher than your actual amounts. Some retailers have in-house or legacy processes to identify and assess their chargebacks while others don’t have an established process at all. In both cases, it’s extremely likely that errors are slipping through your distribution centers or systems. Not only are the errors unaccounted for but there are missed opportunities to notify vendors and avoid similar errors for future shipments.

The benefits of a complete deduction management solution go far beyond the cost offsets. Better communication with vendors means a better working relationship and avoidance of similar errors down the road. By combining communication with more timely and accurate data, retailers can achieve better transparency with their vendors. This can further strengthen the retailer-vendor relationship and ensure that products arrive on floors without any cause for delay.

Improve your vendor compliance program in 2016. See how Stage Stores achieved both compliance and collaboration with its vendors in a recent OpenText Success Story.


OpenText is the leader in Enterprise Information Management (EIM). Our EIM products enable businesses to grow faster, lower operational costs, and reduce information governance and security risks by improving business insight, impact and process speed.

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