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VENDOR RELATIONS-FREIGHT CHARGEBACKS

What actions should be taken when the terms of your Purchase Order are not properly fulfilled by the vendor?  Since it is best to avoid a problems, insist on an acknowledgement of your order from the vendor.  Verify that everything is correct – including all the terms.  If there is a problem, call the vendor immediately and agree on a resolution before the merchandise ships.

If a vendor accepts your order and then does not ship the merchandise until after the cancel date, you have the right to accept it, refuse it or return it. 

If a vendor substitutes merchandise you ordered with other merchandise without your prior permission, you have the right to accept it or return it.  You do not have the right to accept the substitute without paying for it while charging back the vendor for the unshipped item.  That’s stealing.  If a vendor ships you defective merchandise, there is no question concerning your right to return it.  Of course, the cost of freight both in and out should be the vendor’s expense.

If your purchase order states that a lot number of coordinated lot numbers must be shipped in entirety, then a partial shipment would be in violation of your purchase order conditions.  In this case, the cost of freight for subsequent shipments of this lot number or coordinated lot numbers must be borne by the vendor.  You are responsible for the initial shipment’s freight only.

If merchandise is shipped past cancel date, it should be refused at the door.  In this way it remains the vendor’s responsibility.  If you accept it, then return it, the responsibility for its loss or damage in return transit and the cost of shipping is yours.  Another consideration is that if you accept the merchandise and then later return it, the invoice along with the charge back, must both be processed so both appear on the voucher check.  Otherwise, you will have difficulty in documenting the return freight.  To facilitate the refusal of unwanted merchandise shipments, a list of purchase orders whose cancellation dates have passed should be prominently posted in the receiving area to alert personnel that shipments against them are not to be accepted. 

In dealing with the vendor concerning late shipments, be firm and consistent.  If you accept them when it suits your fancy, you can’t expect the vendor to honor your cancellation dates.  Neither is it fair and reasonable to expect the vendor to accept the return of a late shipment after you sell part of it, unless you have his prior approval.


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