Deduction guides, indexed by the question they answer
What is here
These are the long-form guides behind our deduction work, indexed by the question each one answers rather than by title. Find your question in the table below and go straight to the guide that settles it.
What the guides answer, and where
The headline question each one settles
What is retailer deduction recovery?
It is the process of disputing and reclaiming money a retailer withheld from a supplier's invoice. The retailer short-pays and cites a reason code alleging a compliance failure, such as a shortage, a late or incomplete shipment, a packing or labeling error, or a pricing discrepancy. Some of those claims are valid and some are not. Recovery means identifying the invalid ones and disputing them with documentary evidence, inside the retailer's dispute window and in the retailer's required format.
Written for: Someone at a wholesaler, manufacturer, or distributor who ships physical goods to retailers and watches money disappear off their remittances.
Is a recovery agency or software better for retailer deductions?
Neither is better in general. There are four ways to handle retailer deductions, and each is the right answer for some suppliers: absorb them, hire in-house, engage a recovery agency, or run software or an agent. The real difference is not price. It is where the evidence comes from, and how much of your own operation you are willing to own.
Written for: A finance leader choosing an approach, including one for whom an agency is the better answer. The guide argues the agency case honestly and names the situations where ROIAI One is the wrong choice.
Read: Retailer Deductions: Software, Agency, In-House, or Absorb
Is Roy replacing my deduction analyst?
No. Roy does the working half of a deduction case: opening it, reading and normalizing the retailer's reason code, pulling the evidence, testing the claim against that evidence, working out the root cause, and assembling the dispute packet. Your analyst keeps the judgment half: whether a deduction is genuinely valid, what the retailer relationship can bear, which upstream process to fix, and which reason codes are trusted enough to submit without a look. This is a division of labour, not a replacement.
Written for: A team evaluating the working arrangement rather than the decision: who does which step of a case, and what stays with the analyst you already employ.
Read: A Digital Employee for Retailer Deductions, and What Your Analyst Still Owns
When is pursuing a deduction not worth the cost?
Write off a deduction when the fully loaded cost of pursuing it exceeds the value at stake, when the deduction is valid, when the evidence that would settle it cannot be obtained at a reasonable cost, or when the retailer's dispute window has closed. Keep pursuing it when you can reach the document that contradicts the claim, when the window is open, and above all when the same claim keeps recurring. The decision that matters most is not whether to close the AR line. It is whether closing it means you have also agreed to keep paying the same claim next month.
Written for: A deductions or AR manager who needs written criteria rather than a case-by-case judgement call, and a finance leader who has to make the resulting policy defensible.
Read: When to Write Off a Deduction and When to Keep Pursuing It
What happens to a retailer deduction when you have factored the receivable?
When you factor a receivable and the retailer then short-pays that invoice, the invoice does not settle as expected, and the shortfall has to land somewhere. Where your agreement gives the factor recourse for that shortfall, it lands back on the vendor. Recourse and non-recourse settle less of this than vendors expect, because non-recourse protection is written around the customer's credit risk, and a deduction is not a credit event, it is a dispute about the amount owed. The vendor holds the evidence and owns the operational root cause either way, while the cash now moves through the factor.
Written for: A vendor who has sold the receivable and needs to know who absorbs the shortfall, who can still dispute it, and which provisions of their own factoring agreement decide both.
Which retailer chargebacks are hardest to prove?
A retailer chargeback is hard to prove not because the retailer's claim is strong, but because of where the decisive evidence sits and who controls it. Sort your deduction book by custody of evidence, not by claim type, and the difficulty ranking falls out immediately: claims you can settle from documents you already hold are easy, claims whose decisive document is held by a carrier, a warehouse, a broker, or the retailer itself are hard, and claims whose decisive document was never created at all are the hardest of the three. Each of these is winnable. What makes it winnable is almost never cleverness at dispute time. It is whether the document existed, and whether you held it, before there was a dispute.
Written for: Someone deciding which of the claims in front of them are actually contestable, and what to start capturing now so the next one is.
Read: Which Retailer Chargebacks Are Hardest to Prove, and Why
How do you dispute a shortage deduction?
To dispute a shortage deduction, match the retailer's claimed quantity against the documents that show what you shipped and what was delivered: the bill of lading carton count, the proof of delivery, your invoice, and your ship notice. Then file using the form, channel, and deadline the retailer sets in its own vendor manual.
Written for: The deduction analyst or AR lead holding a shortage deduction on a remittance.
How can I tell a retailer chargeback from a credit card chargeback?
A retailer chargeback is a deduction from what a retailer owes its supplier; a card chargeback reverses a consumer payment. How they differ, side by side.
Written for: A supplier holding a retailer deduction, not a credit card dispute.
What should a deduction dispute letter include?
The identifiers the retailer uses to locate the deduction, a one-sentence statement of what's being disputed, evidence matched to the deduction type, a clearly requested action, and a named contact for follow-up.
Written for: A supplier drafting a dispute for a retailer deduction.
What is the difference between the deduction rate and the dispute rate?
The deduction rate expresses total deductions taken as a percentage of sales; it says nothing about what happens to those deductions afterward. The dispute rate expresses how much of the deductions received actually get formally challenged. A business can carry a low deduction rate and a low dispute rate at the same time, or a high deduction rate paired with a high dispute rate. The two just measure different things.
Written for: Finance and credit teams measuring a deduction workload.
What is an allowance, co-op, or markdown deduction?
A trade promotion, allowance, co-op, or markdown deduction is money a retailer withholds under a deal the vendor already agreed to. It's not a penalty for a shipping or paperwork error. It funds a promotion, an ad program, a margin shortfall, or a new-store or new-item rebate negotiated in advance by both sides.
Written for: The deduction analyst or AR lead holding a trade promotion, co-op, or markdown allowance deduction on a remittance.
How do you identify a retailer deduction before you can dispute it?
Start with the remittance line: read the deduction code and amount, then match it to the invoice it was taken against and the purchase order behind that invoice. The code names the deduction type. The invoice and PO show whether the retailer's claim matches what you actually shipped and billed.
Written for: The deduction analyst or AR lead who needs the cross-retailer process, start to finish, for identifying, classifying, and filing a deduction dispute.
What does OTIF actually measure?
OTIF stands for on-time and in-full: whether a purchase order arrived when the retailer required it, and whether it arrived with the full quantity ordered. Each retailer defines both halves on its own window, so the same term produces different fees and deadlines depending on who's charging it.
Written for: The deduction analyst or AR lead holding an OTIF fine who needs to know what CVS and Kroger actually check, and how to test the fine against their own ship and delivery records.
What counts as a freight or routing-guide violation?
A miss against a retailer's own rulebook for getting freight to it, such as shipping without a placed routing request, using an unassigned carrier or facility, or shipping on the wrong freight terms, rather than a miss on quantity.
Written for: The deduction analyst or AR lead holding a freight, routing, detention, or demurrage charge who needs to check it against their own routing, freight-terms, and appointment records.
What is a return-to-vendor (RTV) deduction?
A deduction a retailer takes when it physically ships merchandise back to you and bills the cost, freight, or a handling fee against your account, rather than paying for it. It's distinct from a shortage (goods never arrived) or a compliance fine (a process miss).
Written for: The deduction analyst or AR lead holding a return-to-vendor deduction, a defective merchandise charge, or an unauthorized return who needs to check it against their own receiving, carrier, and return records.
What is an EDI compliance chargeback?
A charge a retailer takes from the vendor when a purchase order, an ASN, an invoice, or a functional acknowledgment transmitted electronically is missing, late, or doesn't match the shipment.
Written for: The deduction analyst or AR lead holding an EDI compliance chargeback who needs to check the purchase order, ASN, invoice, or acknowledgment against their own EDI log.
Does one document answer every deduction type?
No. A bill of lading answers a shortage or a freight and routing dispute, but it doesn't answer an EDI compliance dispute (that turns on your own transmission log) or an allowance dispute (that turns on a signed agreement). Match your deduction type to its row in the table above before you start pulling documents.
Written for: The deduction analyst or AR lead who needs to identify which documents answer a shortage, OTIF, freight, returns, EDI compliance, allowance, or pricing deduction before filing.
Who files a freight claim, and who is it filed with?
The claimant is the person entitled to recover under the receipt or bill of lading. You file the claim with a carrier the Carmack Amendment makes liable: the receiving carrier, the delivering carrier, or another carrier over whose line the property moved.
Written for: The deduction analyst or AR lead who needs to file a freight claim with the carrier rather than dispute a retailer deduction, and needs to know who may file, what the claim must contain, and the filing and response deadlines that apply.
What is a pricing or cost-difference deduction?
A deduction taken when the cost a retailer pays doesn't match what you invoiced. The retailer pays and deducts; you're the one who sent the invoice.
Written for: The deduction analyst or AR lead who needs to check a pricing or cost-difference deduction against the purchase order and invoice, and confirm whether it holds up to dispute before filing.
The guides argue. The libraries look things up.
A guide answers a question you have to think about. If instead you need a specific fact, the reference libraries are the faster route: the deduction code library for what an individual reason code means and whether it is disputable, and the retailer intelligence library for the submission channel, required evidence, and reason-code taxonomy at a specific retailer.
If the question is about us rather than about deductions, the platform pages describe what Roy is and how it connects to your systems, the solutions pages route by the problem you are seeing, and the deduction knowledge hub collects all of it in one place.
Or skip the reading and use your own numbers
Every one of these guides ends in the same place: what your own deduction history actually says. You can start there instead.