Macy's, one of the most iconic American department store chains, has been a cornerstone of retail culture since its founding in 1858, celebrated for its flagship events and enduring legacy.
For suppliers, however, partnering with Macy’s comes with its challenges—chief among them is managing chargebacks, which can significantly impact profit margins.
If you’re a supplier striving to reduce chargebacks and optimize your operations, this guide will provide the insights and strategies you need to succeed.
Chargebacks are deductions made by Macy's for non-compliance with their vendor requirements. They may relate to packaging, labeling, shipping, or documentation issues. Each chargeback is identified by a Reason Code and Violation Code, and resolving them requires understanding the specific violation and submitting the correct dispute documentation.
| Category | Violation | Reason Code | Violation Code | Issue | Resolution |
|---|---|---|---|---|---|
| Quantity Discrepancies: | Unordered Merchandise/Overages | 14 | 848-849 | Merchandise shipped exceeds or does not match PO quantities | Verify shipment quantities against the PO before dispatch |
| Unordered Merchandise/Substitutions | 14 | 851-852 | Unauthorized substitutions shipped that differ from PO specifications | Secure approval for any substitutions and confirm they are updated in the PO | |
| Invoice Errors: | Cost Discrepancies | 501 | - | Invoice cost is higher than PO cost | Provide buyer approval documentation confirming invoice cost |
| Duplicate Invoices | 504 | - | Resubmitting an already paid invoice leads to deductions | Maintain organized records to avoid duplicate submissions | |
| Multiple Invoice Errors | 503 | - | Includes duplicate submissions or invoices for unshipped items | Ensure invoices match actual shipments and contain no duplicates | |
| ASN Issues: | Late ASN/EDI 856 | 61 | 953 | ASNs must be submitted before the shipment arrives at the distribution center | Submit ASNs on time. Provide signed bill of lading to resolve |
| Unusable ASN | 88 | 954 | ASNs with inaccurate or incomplete UPC numbers and quantities will incur penalties | Ensure all ASN data is accurate and complete before submission | |
| No/Late ASN – Direct-to-Store | 89 | 958 | ASNs must be received before deliveries arrive at stores | Submit ASNs prior to store delivery deadlines to avoid deductions | |
| Non-Consolidated ASN | 60 | 957 | Shipments must be consolidated under a single ASN | Consolidate all shipments into one ASN to prevent multiple submissions | |
| Packaging Issues: | Merchandise not folded in polybag | 5 | 870 | Items not properly folded and secured in polybags cause penalties | Use properly sized polybags that hold the item's form and seal securely |
| Merchandise not securely sealed | 5 | 871 | Polybags must be heat-sealed or taped securely without holes | Use clear tape or heat seals, and avoid air holes unless required | |
| Merchandise not packaged as selling unit | 5 | 880 | Items sold as sets must be packed together in a single unit | Pack sets (e.g., 2-piece ensembles) in the same polybag | |
| Hangers and Size Indicators: | Missing GS1-approved hangers | 79 | 513 | Merchandise must include GS1-approved hangers for display readiness | Use only GS1-approved hangers for all applicable items |
| Incorrect or missing size strips | 68 | 562, 563 | Merchandise must display correct size strips visibly on the package | Ensure accurate and properly placed size strips on packaging | |
| UPC and Labeling Requirements: | Poor-quality UPC barcodes | 51 | 905-906 | UPC barcodes that cannot be scanned will incur deductions | Use high-quality, scannable barcodes meeting GS1 standards |
| Missing UPC tickets | 50 | 900-901 | Items without UPC tickets are not floor-ready | Affix GS1-compliant UPC tickets to all merchandise | |
| Freight Issues: | Failure to consolidate shipments | 26 | 226 | Multiple same-day shipments from one warehouse must be consolidated | Group all shipments into a single master ASN and bill of lading |
| Unauthorized air carrier | 30 | 230 | Using an unauthorized air carrier results in penalties | Coordinate with Macy's Transportation Office to ensure compliance | |
| Detention at vendor location | 42 | 242 | Carriers detained longer than allotted time will result in deductions | Minimize carrier wait times to avoid penalties | |
| Freight on backordered shipment | 27 | 227 | Vendors are responsible for freight costs of subsequent shipments after initial delivery | Consolidate shipments or cover costs as required |
Check out Comprehensive List of Target's Deduction Codes.
The documentation needed depends on the violation type:
1. Invoice and Cost Discrepancies:
2. ASN and Shipping Violations:
3. Packaging or Labeling Issues:
iNymbus simplifies Macy’s deduction management by automating complex processes using Robotic Process Automation (RPA). The platform accelerates dispute resolution, eliminates manual errors, and ensures compliance with Macy’s unique requirements. From automated document retrieval to fast and error-free dispute filing, iNymbus empowers businesses to recover deductions more efficiently while reducing operational costs.
Key Benefits of iNymbus: