Reference

Retail deduction terms, in plain English.

Every acronym, code, and process name CPG operators run into when working retailer deductions. Self-contained definitions written so you can paste one into a Slack message and it makes sense.

A

APDP (Accounts Payable Disputes Portal): Walmart's portal for suppliers to dispute deductions taken against their remittance. APDP handles most non-OTIF Walmart deductions including shortages, pricing differences, and post-audit claims. Disputes generally must be filed within 30–60 days of the deduction depending on reason code.
ASN (Advanced Shipping Notice): An EDI 856 transmission a supplier sends a retailer before a shipment arrives, listing the contents at the carton or pallet level. ASN inaccuracy is one of the most common chargeback triggers at Amazon Vendor Central, Walmart, and Target.

C

Chargeback: A fee a retailer assesses against a supplier for failing to meet a compliance requirement (e.g., late ship, missing label, ASN error). Distinct from a shortage deduction, which is a price reduction for goods the retailer claims it didn't receive.
Code 22 (Walmart): Walmart deduction reason code for merchandise billed but not shipped. Generally disputable with proof-of-delivery and signed BOL.
Code 24 (Walmart): Walmart deduction reason code for carton shortage on a received PO. Disputable with packing list, BOL, and shipment weight reconciliation.
Code 25 (Walmart): Walmart deduction reason code for no-merchandise-received against an invoice. Often resolved by re-presenting POD with retailer DC stamp.
Co-op: Cooperative marketing or promotional allowances negotiated between a brand and a retailer. Often deducted from remittance and frequently miscalculated, making co-op a common post-audit recovery target.
CRaP (Can't Realize a Profit): Amazon's internal flag for SKUs that lose Amazon money to sell. CRaP'd SKUs face price changes, removal from Vendor Central ordering, or forced concessions. Not a deduction itself, but the underlying cause of many chargeback and pricing disputes on Amazon.

D

Deduction: Any amount a retailer subtracts from a supplier's invoice before remitting payment. Includes shortages, chargebacks, fines, post-audit claims, co-op, and trade allowances. The umbrella term for retailer-side deductions is often used interchangeably with chargeback, though they are technically different.
Dispute window: The period during which a supplier may formally challenge a retailer deduction. Typical windows: 30–60 days at Walmart APDP, 90 days at Amazon Vendor Central, 60 days at Target. Past the window, the deduction is generally forfeited unless a post-audit appeal is allowed.

E

EDI 810 / 850 / 856 / 870: Standard EDI transactions: 810 invoice, 850 purchase order, 856 ASN, 870 order status. EDI document errors and timing failures are the most common source of compliance chargebacks at every major US retailer.

M

MCB (Merchandising Charge Back): Kroger's category of supplier chargebacks covering compliance failures, shortages, and promotional/scan-down disputes. Issued via the supplier portal and disputed within Kroger's defined window.

O

OS&D (Over, Short & Damaged): Logistics term for shipments that don't match the BOL: overage, shortage, or damaged units. OS&D reports from the receiving DC are the underlying evidence for both shortage deductions and shortage disputes.
OTIF (On-Time, In-Full): Retailer compliance program (most prominently Walmart) measuring whether a shipment arrives in the booked delivery window with the full ordered quantity. Walmart fines 3% of cost on missed OTIF events. Targets and thresholds vary by retailer and supplier tier.

P

Post-audit: Retroactive deductions, typically issued months or years after the original transaction, where the retailer claims it overpaid for past activity (pricing, allowances, co-op, freight). Often outsourced by retailers to third-party post-audit firms working on contingency. Frequently disputable with original deal documentation.
POD (Proof of Delivery): Signed delivery receipt from the retailer's DC confirming receipt of the shipment. Primary evidence used to dispute shortage and no-merchandise deductions.

R

Retail Link: Walmart's supplier portal — used for sales data, EDI status, scorecards, and OTIF visibility. Distinct from APDP, which handles deduction disputes.

S

Shortage claim: A retailer deduction for units invoiced but not received at the DC. Disputable with POD, BOL, weighed shipment records, and DC OS&D reports.
Scorecard: Retailer-published supplier performance report (OTIF rate, fill rate, ASN accuracy, defect rate). Poor scorecards trigger fines, line reviews, and in extreme cases delisting.

T

Trade allowance: Negotiated price reduction or credit a brand provides a retailer for promotion, slotting, or volume. Frequently appears on remittances as a deduction and is one of the most common post-audit dispute categories when miscalculated.

V

Vendor Central: Amazon's portal for first-party (1P) suppliers. Issues automated chargebacks for ASN accuracy, PO on-time, prep, and packaging compliance. Distinct from Seller Central (3P).
VMG (Vendor Management Guide): Target's published compliance manual for suppliers. Defines chargeback fees for routing, label, EDI, and shipping non-compliance. Updated periodically; suppliers are responsible for staying current.

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