How to Eliminate Chargebacks from Big Box Stores

By: Mike Frank, Senior Director of Business Development

When you think of a bully, what comes to mind? I think of the stereotypical movie scene where elementary school children are playing outside during recess without a care in the world. An older boy with a scowl on his face disrupts the fun and pushes one of the kids. The older boy demands money to buy lunch for himself, and the younger child sheepishly complies. After the incident, the younger boy’s friends try to make him feel better and start thinking of ways they can stand up to the bully. Bullies come in all shapes and sizes, but most of the time they are bigger than the person they are picking on. Although we often think of bullies on a personal level, they are certainly present on a more professional level as well. A common bully in the Consumer-Packaged Goods (CPG) industry can be big box stores. Consumer Packaged Goods (CPG) manufacturers and distributors have been bullied by big box stores in the form of lower margin sales and chargebacks for many years. Jarrett Logistics Systems (JLS) acts as that “friend”, giving CPG manufactures a hand in standing up to the bully to eliminate these chargebacks.

Chargebacks are fees customers bill to their suppliers when they fall short on customer requirements. Large retailers have been accused of using chargebacks to increase their own profits, but they are intended to keep suppliers focused on minimizing preventable errors, reducing labor and maintaining peak performance in the supply chain.

While chargebacks benefit retailers, they are often issued erroneously and can easily consume supplier profits, which means strict compliance is key. Instituting a few best practices can help suppliers keep chargebacks to a minimum.

CPG manufacturers incur chargebacks for a number of reasons, including improper labeling, late or early deliveries, shortages, damaged merchandise, improper packing, incorrect carrier usage, or shipping to the wrong location. JLS has a mature process in place to help CPG manufacturers fight back when it comes to erroneous chargebacks.

Correct carrier usage is an important part of the process to avoid unnecessary chargebacks. JLS works with carriers that service all of North America in all modes of freight transportation. As it relates to LTL, we work directly with most national and regional carriers in the continental United States and Mexico.  We have also built out an extensive Intra-Canada LTL network, which is unique to the industry. The most important aspect of our carrier base relates to our operational expertise. We know that not all carriers or shippers are created equal. As a trusted partner, prior to operational startup of any new client, the JLS operational team collects a very detailed understanding of the current business requirements and preferences for the client and each site location. It is vital to understand these requirements in order to ensure that service levels exceed expectations when working with JLS. 

Once a formal carrier bid is completed and implementation of services commence, the JLS routing center is the core of our customer service platform. Through a thorough evaluation process, executive leadership selects a Customer Account Team (CAT) to support the logistics network of our clients by evaluating the size and scope of the company and the freight in which it transports. The CAT consists of logistics professionals who execute complex supply chain and logistics processes by becoming an extension of our clients’ business. They are trained and tasked with executing all modes of transportation, daily routing activities, data reporting, and continuous improvement initiatives for our clients.

Managing delivery appointments is another way JLS helps to prevent unnecessary chargebacks.  Traditionally, CPG shipments going to big box stores or their warehouses require a delivery appointment to be scheduled. When an appointment is required, the retailer must be contacted to schedule one as soon as possible. This does not mean an appointment must be secured, but it means the consignee must be called, emailed, or their website must be utilized to request a delivery appointment. Carriers are encouraged by JLS to schedule appointments within a time frame set by the retailer.

The JLS Routing Center helps our clients become more cost efficient by understanding our customer’s individual requirements and preferences. We’ve all seen the classic film where the bully is confronted by the victim and his friends to prevent their lunch money from being taken in the future. Working with us will resemble that familiar movie scene; the comical ending where the “good guy” gets the upper hand. If you are experiencing similar challenges, don’t let the big box stores bully you! Contact Jarrett Logistics Systems and let us develop a strategic plan to help you take control and eliminate chargebacks.