Decoding Walmart Deductions: Types and Prevention Strategies

Working with Walmart presents great opportunities for business growth, but unexpected deductions can quickly eat away at your profit margins. These deductions range from shortage claims to compliance chargebacks and pricing discrepancies. However, with the right strategies in place, suppliers can mitigate the risks associated with these deductions and safeguard their profits effectively.

Understanding Walmart Deductions Types

Walmart deductions encompass a variety of charges imposed by the retail giant for various reasons. Walmart has provided over 100 deduction reasons, each assigned a numerical identifier known as the Walmart deduction code. These codes can be categorized into pricing discrepancies, shortages, compliances, and miscellaneous.

Shortage Deductions:

Shortage deductions arise from missing or damaged goods unsuitable for sale. Common codes include Code 21: Concealed Shortages, Code 22: Merchandise Billed not Shipped, and  Code 24: Carton Shortage / Freight bill signed short

Compliance Chargebacks:

These deductions are imposed for non-compliance with Walmart's policies, including packaging, labeling, or shipping standards. Common codes include Code 64 - Early Shipment, Code:65 Late Shipment, and Code:31 PO number not on the invoice

Pricing Discrepancies:

Deductions that arise from pricing errors or discrepancies. Common codes include Code 10: Discrepancies allowances between the invoice and the PO and Code 11: Price Difference between PO & Invoice

Shortage Deductions Prevention Strategies

Walmart Shortages occur when the quantity of goods received by Walmart falls short of what was invoiced by the vendor. To mitigate these issues, consider implementing the following best practices:

Quality Control Measures: 

Implement rigorous quality control processes to identify and address potential issues before shipment. This reduces the likelihood of damaged or unsuitable goods.

Accurate Inventory Forecasting and Management: 

Maintain accurate inventory levels and forecasting to ensure sufficient stock is available to fulfill Walmart orders without shortages.

Root Cause Analysis and Corrective Actions: 

Analyze the root causes of shortage deductions and implement corrective measures to address systemic issues within your supply chain processes.

Check Out Our Blog On How To Dispute Target Shortages On Synergy

Compliance Deduction Prevention Practices

Compliance deductions often result from failure to adhere to Walmart's specific requirements for packaging, labeling, and shipping. To minimize these deductions:

Packaging and Labeling Adherence: 

Strictly follow Walmart's guidelines for product labeling and packaging, ensuring compliance with regulatory standards and safe product delivery.

Shipping Compliance: 

Carefully follow Walmart's shipping instructions, including carton requirements, to avoid issues like misdirected shipments or incorrect quantities received.

Timely and Accurate ASN Submission: 

Submit Advance Shipment Notices (ASNs) promptly to ensure accurate tracking and receipt of shipments by Walmart.

Comprehensive Understanding of Requirements: 

Ensure your team thoroughly understands Walmart's specific requirements. This includes staying up-to-date with any changes or updates to Walmart's policies and guidelines.

Walmart Deduction Codes:

Familiarize yourself with Walmart's standardized Deduction Codes to understand the reasons for deductions. This will enable you to prepare effective arguments for dispute resolution.

Pricing Discrepancies Prevention Strategies

Pricing discrepancies can pose significant challenges for Walmart suppliers. To prevent such issues:

Regular Price Validation: 

Create a system to check if the prices on the invoices match the prices agreed upon in the purchase orders. Compare the prices listed on the invoices with the ones written in the purchase orders to make sure they're correct.

Clear Contract Terms:

Ensure that pricing terms are clearly defined and documented in contracts or agreements with Walmart. This includes specifying pricing structures, discounts, and any conditions or exceptions that may apply.

Invoice Accuracy Checks: 

Implement thorough checks of invoices to verify all pricing information. This includes unit prices, quantities, and discounts, and aligns with the terms agreed upon in purchase orders.

Thorough Documentation:

Keep detailed records of pricing agreements, purchase orders, and invoices. These documents serve as proof to support the accounts receivable team’s efforts in resolving disputes if there are any differences in pricing.

Now that we've discussed prevention strategies, let's explore how automation with iNymbus can streamline the deduction management process.

Handling Walmart Deductions With iNymbus

iNymbus is a cloud-based deduction management software that harnesses Robotic Process Automation (RPA) to streamline claims processing workflows, offering tailored RPA solutions that align with your company's SOPs. Moreover, It comes with advanced data and reporting capabilities for root cause analysis and decision-making.

How iNymbus Automates Walmart Deductions

Identifying Walmart Deductions:

iNymbus scans and analyzes new claims using smart algorithms, eliminating manual sifting and saving time. Relevant documents are extracted and verified from various sources for accuracy.

Determining Claim Validity:

Claims undergo a classification process to determine their validity, following standardized procedures to ensure thorough assessment.

Initiating Auto Dispute: 

Once identified and classified, our system automatically initiates and submits disputes on Walmart's APDP.

Reconciliation Payments: 

After a claim has been disputed, users can track the status of disputed claims until the point of payment. This ensures transparency and reconciliation of payments.