Recovering Retailer Chargebacks and hunting for prized truffles have many similarities: They are seemingly rare and only the trained experts know where to hunt. However, once identified they can be worth millions!
With today’s omnichannel complexity and automated ordering systems, most of the supply teams we work with are literally sprinting to deliver cases and don’t have time to root-cause and remedy Retailer chargebacks. As any GM knows, these fees, which are designed to drive maximum efficiency across the channel, can quickly add up to millions of dollars that could be returned to the bottom line or reinvested for growth. They can also cause unnecessary friction in the retailer relationship that distracts energy from focusing on joint opportunities for growth.
Simpactful Success Story: A major CPG brand requested help identifying chargeback causes, over-charges and potential systemic fixes to meaningfully reduce costs that had slowly grown over 3% of gross margin. Using the Simpactful Chargeback Recovery process and a team of experienced Retail and Manufacturer practitioners, Simpactful audited the brand’s chargebacks and end-to-end supply processes to identify $5.0MM in recoverable fines from Target, Walmart and Kroger. The team root caused work process gaps that impacted Retailer compliance and resulted in the fines. These included PO receipt to ship timing, EDI work processes and ASN timeliness. Senior Consultant, Lindsay McShane noted, “Importantly, the team evaluated chargeback rates across retailers and documented the work processes the team should be using to improve their results across the clients on an ongoing basis. In doing so, we armed the client with valuable insight and new capability that will enable them to more effectively challenge chargebacks in the future.”
The client was thrilled with the outcome. “Ultimately, Simpactful helped put solutions in place that are on track to reduce chargebacks by 40% across the client’s Top 3 retailers this year, and we anticipate additional savings across the rest of our retailers,” reports Simpactful Senior Consultant, Neal Dellett.
Interested in learning more? Simpactful is a CPG/Retail consultancy staffed with experienced Brand and Retail practitioners from “both sides of the desk” who are skilled in breaking down complex problems and providing practical solutions that are both simplifying and impactful for our clients. Contact us today at firstname.lastname@example.org or 925-234-6394.