Morsa publishes this guide. Morsa is software with an AI agent that works in your ERP, email and Teams; it matches deductions to your shipping records and drafts the disputes. Figures behind supplier logins name who reports them.
Quick answer
What it is: a retailer’s deduction for breaking its compliance or routing guide; not a card-payment chargeback.
Walmart’s goals: 90% of cases on time for prepaid freight, 98% ready at pickup for collect, 95% in full [4]. Windows and a worked fine are in our OTIF guide.
Why deductions jump in a quarter: Walmart bills OTIF fines quarterly, about five weeks after the quarter ends, so three months of misses land at once [6]; a new rule starts, as Target’s $0.75 ASN fee did on May 4, 2025, per SupplyPike [5]; or a post audit, usually run by a third party the retailer hires, collects old deductions it missed [9].
Disputing: some deductions are wrong, or caused by the retailer’s own routing delay. Check each one, biggest dollars first, while it is inside its window.
Where to file: Walmart OTIF fines in HighRadius; other Walmart deductions in the Accounts Payable Disputes Portal (APDP) in Retail Link; Target deductions in Synergy, inside Partners Online [6][11][12].
What Walmart and Target charge
Charge | Amount | Who publishes it |
|---|---|---|
Walmart on-time in-full (OTIF) | In a month below goal, 3% of the cost of goods on every case that missed, billed quarterly [4][6] | Behind Retail Link; reported by SPS Commerce |
Walmart Supplier Quality Excellence Program (SQEP) defects | ASN missing, wrong or late: $25 per PO [10]. Other PO-accuracy defects $200 plus $1 per case; pallet defects $200 plus $4 per pallet; load defects $200 plus $20 per load [3] | Defect list in Walmart’s own Supply Chain Standards, April 3, 2026 [2]; amounts from SPS Commerce, dated September 2025 and June 2023 |
Walmart case re-marking or replacement labels on imports | $1.00 a case [2] | Walmart’s own Supply Chain Standards [2] |
Target in full | Under 95% of PO item quantities delivered: 3% of the cost of goods not received [5] | Behind Partners Online; reported by SupplyPike, 13 March 2025 |
Target on time | Outside the delivery window: 3% of cost [5] | Same |
Target ASN and barcode | ASN missing or wrong, or barcode missing or unscannable: $0.75 a carton since May 4, 2025 [5] | Same |
Target collect freight | PO not released or not picked up in the window: 1.5% of cost [5] | Same |
Match these to your current supplier agreement, which governs. Amazon’s Vendor Central charges in seven categories, from PO on-time accuracy to carton labels; the amounts show only in its Operational Performance report [7].
How to read a Walmart or Target deduction
Find it. At Walmart, AP deductions arrive on the remittance with a numeric code and are researched in Retail Link. Common codes are 10 (price difference), 22 (goods billed but not shipped), 25 (no merchandise received for the invoice) and 30 to 39 (shipping issues) [11]. OTIF fines come separately, as a quarterly invoice in HighRadius [6]. At Target, each deduction carries an AP code, such as A030 for a shipment shortage, and is worked in Synergy [12].
Match it to one PO and one shipment.
Look up the rule in the compliance and routing guide in force on the ship date.
Check the arithmetic: the cartons, units or cost the charge is based on, and any minimum or cap.
Decide: valid (fix the process), invalid (dispute) or unclear (ask for the backup). Some retailers send no backup at all, so your own records are the evidence.
How to dispute, and the windows
Every dispute needs: the deduction, invoice and PO numbers; the code and amount; one sentence of fact on why it is wrong; the evidence; and the credit you want. The evidence depends on the charge:
Late delivery: routing confirmation, appointment confirmation, bill of lading (BOL) with pickup time, carrier tracking.
Shortage: BOL signed with a carton count and no exceptions, proof of delivery (POD), and the ASN carton count.
ASN late or wrong: the EDI provider’s transmission log with the time sent, against the arrival time.
Label error: photos of the labels at loading, the label spec version used, a scan test record.
Retailer and charge | Window | Where it goes |
|---|---|---|
Walmart OTIF fines | Not published outside Retail Link; check your supplier agreement. SPS Commerce advises waiting 60 to 150 days after the invoice on in-full fines, so late receipts can post [6] | HighRadius, Walmart’s supplier billing portal [6] |
Walmart AP deductions | Not published; missed deadlines are a common reason disputes are denied [11] | APDP in Retail Link [11] |
Target compliance fines | Ask for an exemption in the two weeks before the fine is deducted [13]; after that, 90 days to dispute [12] | Synergy, in Partners Online [12] |
Target other deductions | Up to 18 months [12] | Synergy [12] |
Foot Locker | Receipts up to 6 months old | Late-shipment (code 606) disputes to vendor.compliance.606@footlocker.com; others to the service center that sent the violation letter [1] |
Nordstrom | 60 days for compliance fees; 12 months for other chargebacks | Nordstrom’s AP vendor inquiry site [8] |
Target’s own windows are in its Compliance Policy in Partners Online; the figures above are SupplyPike’s and SPS Commerce’s. Log each dispute’s filing date and follow up on the response date.
A published schedule as a worked example: Foot Locker
Foot Locker is one of the few large retailers that posts its full chargeback schedule, so it shows the method clearly [1].
Code | Violation | Charge |
|---|---|---|
606 | Late shipment | 5% (0 to 7 days late), 10% (8 to 14) or 15% (over 14) of PO cost |
607, 608, 609 | Missing, incorrect or late ASN | $7.50 a carton, minimum $500 |
401 to 405 | Carton (UCC 128) label missing, wrong or unscannable | $7.50 a carton plus $250 |
100 to 204 | Unit ticket or UPC errors | $1.25 a unit, minimum $250 |
On most codes, per-unit charges may not exceed 25% of the unit’s cost, and “5% of receipt” charges stop at $1,250 [1]. Check that a deduction respects both.
A supplier ships a $40,000 PO at cost: 160 cartons, 3,200 units.
What happened | Code and rule | Charge |
|---|---|---|
Shipped 10 days late | 606: 8 to 14 days, 10% of PO cost | $4,000 |
ASN sent after the truck arrived | 609: $7.50 x 160 cartons, above the $500 minimum | $1,200 |
40 cartons with labels that would not scan | 404: $7.50 x 40 + $250 | $550 |
Total deducted | $5,750, 14.4% of the PO |
Now test each line. Foot Locker measures lateness against the “made available and expected dates” on the PO [1]. If its routing desk set a pickup after your ready date, the routing confirmation and signed BOL win back the $4,000. If your EDI log shows the ASN went out before the truck arrived, that log wins back the $1,200. The $550 stays: the one charge your own process caused.
The chargebacks to prevent first
Chargeback | Prevention |
|---|---|
Late or early delivery | Book the appointment and file the routing request the day the PO arrives |
Late materials behind a late order | Get a confirmed ship date on every supplier PO behind a retail order (how) |
Short shipment | Check stock before accepting the PO; agree partials in writing |
ASN missing, late or wrong | Build the 856 ship notice from scans at loading and send it as the truck leaves; check it was accepted |
Carton label wrong or unscannable | Check print quality and placement; our SSCC label generator shows the fields |
If a 3PL ships for you, put these rules and who pays for its errors in the contract (3PL pricing); EDI setup and testing costs are in EDI cost.
Turning a deduction into a dispute packet
The slow part of a dispute is finding the records: the ASN log in the EDI portal, the BOL in a scan folder, the appointment in someone’s email.
Morsa reads each remittance and deduction notice as it lands in the AP inbox or portal export, and matches it to the PO, ASN log, BOL, POD and carrier tracking in your ERP and email.
It marks the ones your records contradict, with the fact (“ASN sent 2:02 PM, truck arrived 4:40 PM”), and drafts the dispute with the evidence attached.
AP reviews each draft and sends it from its own mailbox; Morsa tracks the window until the credit posts.
To see it on last quarter’s deductions, book a 30-minute walkthrough.
What to do this week
Export the last 90 days of deductions: Walmart remittances and HighRadius invoices, and Target’s from Synergy.
Total them by reason code, in dollars.
Dispute the largest ones your records contradict, starting with Target compliance fines closest to 90 days.
Fix the process behind the largest valid code.
List each retailer’s dispute window and portal from your supplier agreements, in one sheet.
A late shipment also lands in the wrong month of the retailer’s open-to-buy plan, which is why buyers cancel late POs.
Sources
Foot Locker, Vendor Standards Manual, Section 9: Vendor Compliance Program, Chargebacks and Policies (US and Canada, July 2026): https://www.footlocker-inc.com/content/dam/flincfoundation/footlockerinc_documents/vms/europe/2022/2026%20VSM%20Section%2009%20-%20Vendor%20Compliance%20Program%20Chargebacks%20and%20Policies%20-%20606.pdf, linked from https://www.footlocker-inc.com/content/flinc-aem-site/en/vendor-standards-manual.html (read 8 November 2026)
Walmart, Secondary Packaging Supply Chain Standards (April 3, 2026), SQEP section and case marking fees: https://corporate.walmart.com/content/dam/corporate/documents/suppliers/requirements/supply-chain-packaging-guide.pdf (read 8 November 2026)
SPS Commerce, Calculating SQEP Fines by Defect (updated 21 June 2023): https://www.spscommerce.com/community/articles/calculating-sqep-fines-by-defect (read 8 November 2026)
SPS Commerce, Walmart’s OTIF Performance Metrics: https://www.spscommerce.com/community/articles/walmart-otif-metrics (read 8 November 2026)
SPS Commerce Help Center (SupplyPike), Understanding Target’s Compliance Program (13 March 2025): https://help.supplypike.com/en/articles/8300994-understanding-target-s-compliance-program (read 8 November 2026)
SPS Commerce, The Unofficial Guide to Disputing Walmart OTIF Fines: https://www.spscommerce.com/community/articles/walmart-otif-dispute-process (read 8 November 2026)
SPS Commerce, What Are Amazon’s Compliance Chargebacks? (updated 31 January 2024): https://www.spscommerce.com/community/articles/what-are-amazons-compliance-chargebacks (read 8 November 2026)
SPS Commerce, Nordstrom’s Accounts Payable Codes: https://www.spscommerce.com/community/articles/nordstroms-accounts-payable-codes (read 8 November 2026)
SPS Commerce, Understanding Retailer Deductions, Chargebacks, and Fines (updated 3 November 2025): https://www.spscommerce.com/community/articles/understanding-retailer-deductions-chargebacks-and-fines (read 8 November 2026)
SPS Commerce, ASNs and PO Accuracy in the Supplier Quality Excellence Program (SQEP) (updated 23 September 2025; “All of the ASN related defects are a flat fee of $25/PO”): https://www.spscommerce.com/community/articles/asns-and-po-accuracy-in-the-supplier-quality-excellence-program-sqep (read 8 November 2026)
SPS Commerce, How To Dispute A Walmart Deduction (updated 2 June 2025; deductions in Retail Link, disputes through APDP, codes 10, 22, 25 and 30 to 39): https://www.spscommerce.com/community/articles/how-to-dispute-a-walmart-deduction (read 8 November 2026)
SupplyPike Help Center, Target Deductions Overview (updated 6 February 2026; “Deductions for compliance fines have a 90-day dispute window”): https://help.supplypike.com/en/articles/6630073-target-deductions-overview (read 8 November 2026)
SPS Commerce, Compliance Deductions At Target (updated 5 October 2022; exemption requests in the two weeks before the deduction): https://www.spscommerce.com/community/articles/target-compliance-deductions (read 8 November 2026)
