Chargebacks and deductions, in our context, are not consumer protection measures against fraud. Instead, they are fees imposed by major retailers like Amazon or Walmart on their vendors. These fees are a response to perceived violations related to shipping, compliance, or other vendor responsibilities.
Common Categories and Areas:
Shortages
Fees for quantity discrepancies between orders and received items
Pricing Claims
Deductions related to disagreements over pricing, discounts, or promotional deals.
Transportation Issues
Delays or problems during transportation that impact delivery times.
Purchase Order Issues
Problems with aligning purchase orders with actual shipments.
Packaging and Labeling Issues
Discrepancies between what was ordered and what was received.
Advanced Ship Notice (ASN) Issues
Failures to provide accurate advance notice of shipments.
Suppliers frequently encounter frustration with chargeback and deduction processes, which seem to change arbitrarily and are guided by complex algorithms. There's a belief among vendors that retailers like Amazon and Walmart intentionally complicate chargeback processing, adding hurdles for vendors to dispute these claims, thus enhancing their profit margins.
Reduced Margins
Large retailers mandate claim and documentation uploads, a meticulous and time-intensive endeavor. This usually involves training personnel to collect, evaluate, and manually upload claims to retailer portals. Each portal varies in terms of navigation, data, documents required, and the sequence for assembling each claim package.
Tight Deadlines
In a study on Warner Brothers, manual claim processing by motivated and trained employees took around 5 to 8 minutes for organization and 5 to 7 minutes for portal uploads. This accumulates to 15 minutes or more per claim, and vendors often deal with hundreds or thousands of claims monthly.
Manhours Wasted
A study on a Walmart apparel distributor revealed that each deduction claim demanded 8 to 15 minutes for manual completion. With nearly 3,000 deductions per quarter, this results in over 400 hours spent solely on attempting to recover losses.
Cashflow Problems
Processing chargebacks from retail giants like Amazon and Walmart becomes a burden, consuming time, pressuring departments, and raising doubts about its worth in terms of required human capital.
As a Supplier's volume grows (a fantastic problem), it is imperative to immediately implement a strategy for managing chargeback disputes that will also grow with this volume. In the beginning, these simple steps will help with simplifying chargeback management:
Seasonal Hiring
Consider hiring staff on temporary basis to meet the seasonal demand.
Effective Organization
Categorize chargebacks based on issue types and associated documentation.
Structured Procedures
Create written standard operating procedures (SOPs) for chargeback processing.
Structured Processing
Utilize standardized spreadsheets for streamlined processing and research.
Guided Support
Offer hands-on guidance to address queries and resolve processing issues.
Threshold Definition
Determine a chargeback threshold, ensuring it justifies team member involvement.
Suppliers frequently encounter frustration with chargeback and deduction processes, which seem to change arbitrarily and are guided by complex algorithms. There's a belief among vendors that retailers like Amazon and Walmart intentionally complicate chargeback processing, adding hurdles for vendors to dispute these claims, thus enhancing their profit margins.
In the current scenario, the most effective and efficient route to address chargebacks and deductions lies in the realm of automated chargeback management. The essential strategy involves automating chargeback responses by harnessing advanced robotic technology akin to that employed by retail giants like Amazon to initiate chargebacks. This approach isn't just a possibility; it's a reality that can be seamlessly integrated into your company's standard operating procedures.
| Advantages of Cloud robotics | Cloud robotics automation | Manual |
|---|---|---|
| Time to organize and file a Claim | 24 Hours | 3 to 6 Months |
| Cash flow | 0 to 1 Month | 3 to 6 Months |
| Retailer upload resource effort per 1000 claims (A Month ) | 0 Hours | 240 FTE Hours |
| Yearly Training / retraining | 0 Hours | 200 Hours (10% Annually ) |
| Cost Per Claim | $1* | $ 5.28 |
By leveraging iNymbus: Vendor Chargeback Management Software, this retail giant streamlined its operations by transforming a 40-person team tasked with managing deductions from over 40+ retailers into a highly efficient handful. This strategic move enabled the company to reallocate resources towards proactive measures, leading to a substantial decrease in valid claims by nearly 60% within a few months.
iNymbus transformed a retail giant's deduction management, reducing resolution time from weeks to minutes, cutting direct costs by 94%, and optimizing staff allocation. The automation streamlined processes, providing visibility across retailers and enabling root cause analysis. The iNymbus dashboard enhanced reporting and eliminated errors, turning a once tedious task into a hands-free, efficient operation. Discover how this organization achieved such remarkable results.
Within a mere 90 days, a book distributor adopted robotic processing, resulting in a remarkable transformation. Their chargebacks dwindled to an astonishing zero, marking the first-ever occurrence of this achievement. The transition to automated chargeback management incurred minimal costs compared to the conventional manual approach. This remarkable success underscores the undeniable potential of automated solutions to effectively counter the challenges of chargeback and ar deductions disputes, regardless of volume.
iNymbus chargeback management software proved essential for the book distributor, offering a quick solution that not only cleared backlogs efficiently but also allowed the team to stay current on Amazon chargebacks. The cost-effective and time-saving nature of the automated tools made it a logical choice for improved efficiency and strategic planning.
These accounts underscore the game-changing potential of automated chargeback management solutions provided by iNymbus. Overcoming Amazon's and Walmart's complexities, these tools offer the necessary efficiency and cost savings, making them an undeniable choice for distributors and suppliers alike. Download our insightful case studies to delve deeper into these successful transformations.
