Retailer Chargebacks and How to Avoid Them


Retailer Chargebacks and How to Avoid Them

As an emerging CPG company, the last thing you want to deal with are retailer chargebacks. They eat into your profit margins and are a symptom of larger issues.

But, what are retailer chargebacks, why do they exist, and how can you plan to avoid them?

Read on to learn the ins and outs of retailer chargebacks and get some tips on the ways you can avoid running into them.

What is a Retailer Chargeback?

Retailer chargebacks, sometimes called vendor chargebacks, are fees incurred when a retailer deems a shipment to be substandard. Essentially, a retailer chargeback is a fine levied by a retailer against the supplier for failure to adhere to predetermined terms. Each retailer has their own set of terms, so understanding what they require is key to avoiding chargebacks.

Why do Retailer Chargebacks Happen?

Many retailers have a set of metrics that they use to evaluate incoming shipments. Failure to meet these metrics mean you may be charged upward of 20% of an invoice when products don’t meet their standards. Often, these standards include quality control, shipment size, improper CPG packaging, late delivery, or even incorrect paperwork.

How to Avoid Retailer Chargebacks

Retailer chargebacks are an unfortunate, but necessary part of any retailer’s supply chain. But, retail chargebacks can really hurt a CPG brand’s bottom line. It’s important to do everything you can to avoid them.

Here are a few ways to avoid retailer chargebacks:

Avoid Retail Chargebacks with Byzzer

No matter which retailer you’re working with, staying on top of retail sales data will make you more prepared to meet their needs and ensure you have a winning product assortment that you aren’t paying chargebacks for. Whether that’s tracking inventory levels, forecasting demand, or picking out the best retailers to partner with.

Luckily, with Byzzer, powered by NielsenIQ, you can have all the data you need at your fingertips. Byzzer provides breakdowns of product and category attributes in easy-to-digest reports. Best of all, we’ll show you how to leverage this information for your action plan.