The Idea of The Retail Chargeback | Approach to D365 for Commerce with Adv WH Mgmt

Hi Guys, In our previous blog we have seen, how you could improve the efficiency and the service levels of the various people that work within a Retail Warehouse by modifying the mobile device screens. In this blog, we will take a little bit of a different track and talk about how the Warehouse Management module can actually make a retailer money. And we will introduce the idea of a RETAIL CHARGEBACK.

Here you have this picture of this case. And you can see that, if you look carefully, this case is kind of unusual because it has two labels on it.

That means there are two SKUs inside it. Somebody’s going to have to break this case open and split the one SKU into a separate box from the other SKU, because you can’t have a box on a shelf that has two SKUs in it. You can’t replenish it if you do that. So that’s going to cost extra labor. And many retailers don’t really want to be correcting some manufacturer’s mistake, because the margins are thin. So they will actually charge the manufacturer for these kinds of problems or fixing these kinds of problems. You can imagine, sometimes the box might show up and it doesn’t even have any label. Well, here’s an example what they call a chargeback sheet for a major retailer in North America.

And if something shows up that doesn’t have a label on it, they will charge $7.50 per carton that’s missing a label, or the bar code is there but it’s unscannable. This also means, for example, if they’re expecting the label to be on the side of the box but the vendor puts the label on the top of the box, they’re still going to charge them $7.50.

So if you have hundreds of these every week, this can add up to a lot of money. There’s 2,000 cartons typically in a trailer. If you’ve got 10 or 15 of these every trailer, that’s a sizable amount of cash that could pay for the whole labor of doing the receipt to begin with. Then there are some retailers that, especially if they have even more leverage with their supply base, they’ll charge even more. Here’s another one and you can see for the same in fraction, if they were to just not mark the carton accurately, they’re going to charge you $5 a carton, plus a minimum of $500.

So on one trailer, if you make a mistake on one carton like this, you have to pay $505. So this is, for some retailers, a mechanism to generate hundreds of thousands of dollars annually, if they collect it. Now, the challenge is always getting it collected. Because the receiving people, unless it’s easy for them to collect, it tends not to be collected. And so some of these fees never go back to the vendor. So we need to discuss a little bit about how to collect this sort of information because it’s not really in the base D365 FO but it would be easy for a partner to kind of enhance this and offer this as some additional partner-supplied functionality that augments the base.

How Can We Implement Retail Chargeback?

So let’s see how you can get this chargeback information. Well, obviously one way it’s done but it’s not that successful is, just to capture this stuff on paper, and that doesn’t require any kind of functionality whatsoever. You can see that this chargeback form is filled out. But it doesn’t always get filled out at a lot of sites.

And consequently what most retailers want is the ability to do this inside of the receiving screen. But that’s going to require some type of partner functionality to do that. You’ll need to have some way of capturing the chargeback. You can try to do this, but you can only capture receiving exceptions at the header level. You really need to be able to do this at the order line level, if not the actual license plate level, where you would be able to record what type of chargeback.

Also what would be neat is if you could take pictures of the problem using the Mobile device, because a lot of the mobile device terminals now have cameras built into them. You need some functionality that would let you calculate the charges for different kinds of infractions that you could develop an invoice be sent to the vendor, or credit memo or debit, or something for those kinds of problems. You need to have some way of communicating these things to a supplier via e-mail quickly so they can assess their validity.

And then, another nice feature of something like this, would be to produce vendor scorecards that will show you, for every vendor what type of mistakes they have had and offers an overall scoring for each vendor so you can classify them as a good vendor or bad vendor or somebody that needs to improve. That would be the features that we would want to wrap into this.

But the core piece would be some type of extension at the receiving screen or a separate screen altogether that could be easily launched from the mobile device terminal by a receiving associate to capture some sort of infraction at the order, PO order line, or the inbound license plate level. But you can see how something like this could be easily paid for just in the added revenue it would generate for a Retail Warehouse.

In our next blog we will see Classic ways to save labor in Retail for lots of things that are fairly common but not everybody has implemented them.

Feel free to reach out for any clarifications. If you like my blog posts then comment and subscribe to the blogs.

#RetailDAXing #D365Commerce

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