Walmart Deduction Codes Explained: iNymbus

In the intricate world of supply chain management, Walmart relies on a systematic approach to tackle various issues that may arise during procurement and distribution. An essential tool in this process is the use of Walmart Deduction Codes.

These codes serve as a standardized means to identify and manage specific challenges, ensuring the smooth operation of Walmart's supply chain.

In this article, we've outlined a comprehensive list of all Walmart deduction codes, along with detailed explanations and practical examples for the most common ones.

What Are Walmart Deductions, and Why Are They Important?

Walmart deductions are financial adjustments made to supplier invoices when issues arise during the supply chain process. They help Walmart address problems like missing items, damaged goods, pricing discrepancies, or late deliveries. Essentially, deductions act as Walmart's way of ensuring everything runs smoothly and suppliers meet their agreed commitments.

For suppliers, deductions might feel like a nuisance, but they serve a purpose. They flag errors that need fixing, whether it’s a shipment shortage, damaged products, or mismatched pricing. Common deduction scenarios include:

• Shortages: When fewer items are delivered than ordered.
  
  
• Damages: For products that arrive broken or defective.
  
  
• Pricing Errors: When invoice prices don’t match the purchase order.
  
  
• Late or Incomplete Deliveries: Triggering penalties under Walmart's On-Time In-Full (OTIF) policy.

Suppliers can dispute deductions they believe are invalid by providing documentation like invoices, proof of delivery (POD), or purchase orders (PO). Using tools like deduction management software, you can automate disputes, saving time and recovering lost revenue.

By understanding Walmart deductions and addressing them proactively, you can protect your cash flow, improve compliance, and maintain a solid partnership with Walmart.

Here are the most frequently used supplier deduction codes, and a full list is provided at the end.

Code 1: Defective

• Code 1 is used to identify merchandise that is received but found to be defective. This could include products that are damaged, malfunctioning, or not meeting quality standards upon inspection.
  
  
• Example: Walmart receives a shipment of 200 smartphones. Upon inspection, it is found that 20 of the phones have non-functioning screens. These defective items are documented under Code 1.
  
  
• To dispute Code 1,  you will need to provide the following documents: Quality Control Records, Photo Evidence, Proof of Delivery (POD), Bill of Lading (BOL), and Packing Lists.
  

Code 2: Return Recall

• Code 2 is applied when products are recalled by the supplier due to safety, quality, or regulatory issues, or when Walmart returns products for these reasons.
  
  
• Example: A supplier recalls a line of smartwatches because of a battery defect that can cause overheating and potential burns. Walmart removes the smartwatches from shelves and processes a return recall under Code 2.
  
  
• To dispute Code 2,  you will need to provide the following documents: Recall notice, Invoice, and any communication with Walmart.

Code 15: Pallets/Shrink-wrapped Short/Damaged

• Code 15 applies when there are shortages or damages to shrink-wrapped pallets or individual pallets in a shipment.
  
  
• Example: A delivery of furniture arrives at Walmart, and it is found that several shrink-wrapped pallets are damaged, with some items missing or broken. This is documented under Code 15.
  
  
• To dispute Code 15, you will need to provide the following documents:  Proof of Delivery (POD), Bill of Lading (BOL), and packing lists.

Code 21: Concealed Shortages

• Code 21 is used to identify concealed shortages, which refer to situations where the shortage of items in a shipment is not immediately visible when the facility first receives it. These shortages may only become apparent when the vendor pack is opened or when the shipment arrives at the store.
  
  
• To dispute Code 21, you will need to provide the following documents: a Purchase Order (PO), Proof of Delivery (POD), Bill of Lading (BOL), and the corresponding Invoice.
  

Code 22: Merchandise Billed not Shipped

• Code 22 is applied when discrepancies occur between the billed quantity on the invoice and the actual quantity of items received by Walmart.
  
  
• Example: Let's say Walmart places an order for 50 laptops from a supplier. However, when the shipment arrives at their distribution center, they only receive 45 laptops instead of the expected 50. In this case, Code 22 will be issued to record the discrepancy and address the outstanding 5 laptops.
  
  
• To dispute Code 22, you will need to submit the following documents: a Purchase Order (PO), Proof of Delivery (POD), Bill of Lading (BOL), and the relevant Invoice.
  

Code 24: Carton Shortage/Freight Bill Signed Short

• Code 24 is used when the store or distribution center signs for a shipment that appears to have more items on the bill of lading (shipping document) than what was actually received in the delivery.
  
  
• Example: Suppose a delivery truck arrives at a Walmart store with a shipment of televisions, and the bill of lading indicates there are 30 televisions in the shipment. However, upon inspecting the delivery, it becomes apparent that only 25 televisions were actually delivered. In such a scenario, a Code 24 will be assigned to acknowledge the shortage and mark the Proof of Delivery (POD) as "short."
  
  
• To dispute Code 24, you will need to submit the following documents: a Drop Trailer Stamp or Shortage Stamp, Purchase Order (PO), Proof of Delivery (POD), Bill of Lading (BOL), and the relevant Invoice.
  

Code 10: Price Difference as Documented

• Code 10 is triggered when inconsistencies arise in the allowances, encompassing discounts, rebates, or other modifications, between the invoice and the purchase order (PO).
  
  
• Example: Let's say Walmart places a purchase order for 100 units of a particular product from a supplier. The supplier agrees to provide a discount of 5% on the total order. However, when Walmart receives the invoice, the discount applied is only 3% instead of the agreed-upon 5%. In this case, a Code 10 will be generated to address the discrepancy in the allowance amount and ensure proper adjustments are made in the accounting records.
  
  
• To dispute Code 10, you will need to submit the following documents: Supplier Agreement and Invoice.
  

Code 11: Price Difference between PO & Invoice

• Code 11 is generated when there are cost differences for specific items between the invoice and the purchase order. This occurs when the actual cost of items ordered and received differ from what was initially quoted in the purchase order.
  
  
• Example: Suppose Walmart places a purchase order for 50 laptops, with each laptop's cost specified as $800 in the purchase order. However, when the supplier's invoice arrives, the cost listed for each laptop is $850. This cost difference between the PO and the invoice triggers a Code 11 to indicate that the item cost doesn't match, and further investigation or adjustments are needed to reconcile the discrepancy.
  
  
• To dispute Code 11, you will need to submit the following documents: an Invoice, a Purchase Order, and any Custom Documentation (if any).

Code 51: Promotional Allowance Display/Fixture Allowance 

• Code 51 is used when there are discrepancies or allowances related to promotional displays or fixtures not properly documented or executed.
  
  
• Example:  Walmart agrees with a supplier on a promotional display for a new product launch. However, the display delivered does not match the agreed specifications, leading to Code 51 being issued.
  
  
• To Dispute Code 51: you will need to provide the following documents: Agreement and Invoice.

Code 61: Incorrect Color/Size Allowance

• Code 61 applies when products received do not match the color or size specifications outlined in the purchase order.
  
  
• Example: Walmart orders a batch of blue T-shirts in size medium, but the shipment contains red T-shirts in size large. This discrepancy is recorded under Code 61.
  
  
• To Dispute Code 61: you will need to provide the following documents: Purchase Order (PO), and packing lists.

Code 99: OTIF

• Code 99 documents issues related to on-time and in-full delivery requirements not being met, such as late deliveries or incomplete shipments.
  
  
• Example: A supplier is expected to deliver 500 units of a product by a specific date. The delivery arrives three days late and only includes 450 units. This situation triggers a Code 99.
  
  
• To Dispute Code 99: you will need to provide the following documents: Proof of Delivery (POD) And Bill of Lading (BOL).

How to Dispute Walmart Deduction Codes On APDP

Walmart APDP > Create Dispute > Enter Required Details (Vendor Code| Claim Code) > Click Search

You will a similar screen.

Check our blog on “Walmart Deduction Recovery: Disputing Claims On APDP”

Complete Walmart Deduction Codes List

To help you navigate Walmart deduction codes effectively, we've compiled a comprehensive table, along with their descriptions and typical reasons for application. Please refer to this table as a quick reference guide:

Troubled by Walmart Deductions?

Understanding and managing Walmart Chargeback codes is crucial for vendors. While this article has provided valuable insights on Codes, managing deductions is a different game altogether. That's where iNymbus comes in. Our solution streamlines deduction management, identifies trends, and empowers you to proactively address issues, saving time and money. Don't let deductions erode your profits, learn how to automate Walmart deduction management with iNymbus.