Let’s talk about a problem that’s draining suppliers dry—retail deductions.
You send a shipment, triple-check the paperwork, and think you’re in the clear. Then, weeks later, a chargeback pops up on your invoice. The retailer claims they were shorted, the labels were wrong, or there was some obscure compliance issue.
At first, you shrug it off. Cost of doing business, right? But then it happens again. And again.
Suddenly, thousands of dollars are disappearing from your bottom line every month.
Sound familiar? You’re not alone. Retailers issue billions in deductions each year, and a significant chunk of those are mistakes or unfair charges. The worst part? Most suppliers never fight back.
What’s at Stake? More Than You Think.
For small and mid-sized suppliers, deductions can be devastating. If you’re working on tight margins—say 20-30% gross profit—and a retailer starts clawing back 5-10% through deductions, suddenly, your revenue isn’t what you thought it was.
Let’s put it in real numbers.
Say you land a major retail contract worth $500,000 a year. Exciting, right? But if you lose 7% to deductions, that’s $35,000 gone—money you already earned.
And what if your net margin was only 10%? That deduction just wiped out a third of your profit.
Now, imagine a supplier doing $5 million in revenue. That same 7% loss means $350,000 in deductions. That’s not just frustrating—it’s a potential business killer.
Why Are These Deductions Happening?
The reasons retailers deduct from invoices vary, but these are the biggest culprits:
“Shortages” That Aren’t Shortages Retailers often claim they didn’t receive the full shipment, but in many cases, the inventory is sitting in their warehouse, miscounted or misplaced.
Example: A supplier ships 500 cases of a product. The retailer claims they only received 475. But a month later, the missing cases mysteriously show up in their inventory system. Too bad—the deduction already happened.
Compliance Chargebacks That Make No Sense
Did your barcode print 1/8 of an inch too small? Did the retailer’s own truck arrive late, but you got penalized? These compliance chargebacks can seem arbitrary, yet they add up fast.
Example: A supplier received a $10,000 chargeback for “late delivery” on an order that was actually delayed by the retailer’s own distribution network. Fair? Not in the slightest.
Unauthorized “Program Fees”
Some retailers deduct for marketing programs, shelving fees, or promotional costs without prior agreement. These deductions show up on invoices with vague explanations like “program expense” or “co-op advertising.”
Example: A brand notices a $7,500 deduction labeled “endcap marketing.” They never agreed to any endcap promotion.
Returns & Damages That Weren’t Your Fault
Some retailers pass along return and damage costs to suppliers—even if the damage happened in-store or the product was returned due to customer misuse.
Example: A supplier of high-end kitchen knives sees an uptick in returns. Turns out that customers are returning perfectly fine knives after one-time use. The retailer deducts the cost from the supplier’s invoice.
How to Fight Back and Win
So what can you do? Plenty. Suppliers who challenge deductions recover 30-40% of disputed claims. The key is having a system.
Track Everything
Keep detailed shipping records, invoices, and proof of delivery.
If possible, get signed confirmations from retailers upon receipt.
Audit Every Deduction
Never assume a deduction is valid. Retailers process millions of transactions—errors happen.
Regularly review deductions and categorize them to spot trends.
Dispute with Data
When disputing a deduction, bring receipts—literally.
Attach packing slips, delivery confirmations, and proof of compliance.
The more organized and fact-based your dispute, the higher your chances of getting paid back.
Don’t Let the Clock Run Out
Many retailers have strict timeframes for disputes—sometimes as short as 30-90 days.
If you miss the window, your money is gone.
The Bottom Line: Stop Leaving Money on the Table
Retailers count on suppliers not challenging deductions. It’s a numbers game—if even half of the suppliers accept the charges, that’s millions of dollars retailers don’t have to pay back.
But what about those who fight back? They win back real money.
Take Back What’s Yours
Woodridge Retail Group, we don’t just help suppliers grow sales—we help them protect their revenue.
Woodridge Deductions are powered by HRG, the company that created deduction recovery and perfected it. Their experts dig deep into your deductions, uncover errors, and recover the money retailers owe you.
Want to see how much you could be reclaiming? Let’s talk. You might be surprised at how much money is waiting to be recovered.