List of Walmart Deduction Codes Defined (2024)

“Why is Walmart refusing to pay the full amount of this invoice?”

Walmart suppliers are researching that question every month. As the company initiates more programs to improve supplier accountability (On Time In Full, Supplier Quality Excellence Program, etc.), deductions and fines are becoming more prevalent.

When Walmart feels a supplier has not met the terms of a purchase order or invoice, it deducts a portion of the payment based on the circ*mstance. Walmart notifies suppliers of why they are being penalized by deduction codes.

Most Common Walmart Deductions

While there are many deductions that can be issued from Walmart, most suppliers will only see a few over and over again. Some of the most common ones include:

Code 13: Substitution Overcharge

Walmart will issue a Code 13 when a supplier invoices for one item number but Walmart receives a different item number. If the item billed on the invoice is at a higher cost than the merchandise received, the supplier will be issued a Code 13 for the difference in cost.

Can it be disputed? Yes, but not easily. To dispute the deduction, go to Retail Link^® and enter the supporting documentation in the Accounts Payable Disputes Portal (APDP). This includes the bill of lading, invoice, and proof of delivery.

Code 22: Merchandise Billed not Shipped

As its name suggests, Code 22 is issued when Walmart does not receive all the items it is billed for on the invoice. For example, if a store or distribution center receives 40 cases but the invoice is for 45 cases, a Code 22 will be issued for the 5 outstanding cases.

Can it be disputed? Yes. To dispute the deduction, the supplier needs to show that all invoiced items were shipped by going to Retail Link^® and entering the information in the Accounts Payable Disputes Portal (APDP).

Code 24: Carton Shortage/Freight Bill Signed Short

A Code 24 is issued when an order is signed short by the store or distribution center. In other words, a bill of lading shows there is more merchandise than actually arrived in the shipment. Therefore, the POD is stamped as short.

Can it be disputed? Yes. To dispute the deduction, go back to the Accounts Payable Disputes Portal (APDP) in Retail Link^®.

Code 25: No Merchandise Received for Invoice

If suppliers receive a Code 25, Walmart is claiming it received absolutely no merchandise on the invoice. This code is commonly issued when the invoice is sent too early and arrived before the shipment of merchandise.

Can it be disputed? Yes. To dispute the deduction, enter the supporting documentation in Accounts Payable Disputes Portal (APDP) in Retail Link^® (invoice, bill of lading, purchase order number, proof of delivery, etc.). However, do not issue a second invoice! This will be considered duplicate billing and a Code 30 will be issued.

Code 47: Excessive Freight on Invoice Description

A Code 47 is issued if Walmart believes they have been billed too much for the freight charge.

Can it be disputed? Yes. Provide Walmart with a carrier bill showing the exact amount paid to the carrier.

Complete List of Walmart Deduction Codes

The following is a list of Walmart deduction codes, definitions, and corresponding EDI:

Deductions vs. Allowances

The chart above outlines reason codes for when Walmart is not paying the full amount of an invoice. While deductions may be unexpected to the supplier, allowances should be discussed well in advance.

An allowance is an agreement between Walmart and the supplier to meet specific terms for a cost discount. For example, the supplier may give Walmart a lower price for large bulk purchases of product. This would show up as an allowance and not a penalty.

It is very important to review your agreement with Walmart and anticipate allowances during the billing cycle. Many times suppliers forget Walmart is holding out an allowance and try to dispute. The suppliers’ accounting departments need to be aware of all allowance terms to save time in processing.

Can Walmart Deductions Be Disputed?

If a supplier feels they have received a Walmart deduction or penalty in error, most can be disputed (examples above). Any dispute needs to be thoroughly researched and backed with appropriate documentation before submitting to Walmart.

The hardest Walmart fines to dispute relate to On Time In Full (OTIF). Walmart takes a no-tolerance approach to merchandise arriving at its facilities late, early, and short on quantity. In rare instances, Walmart has waived OTIF penalties due to extreme weather, national catastrophes, and other large-scale impacts.

Conclusion

Receiving a deduction or penalty from Walmart does not have to be viewed as a negative. These Walmart fines can be indicators of where a supplier needs to make improvements in the supply chain to grow their business.

Researching documentation for disputing a deduction can be overwhelming. The accounting team at 8th & Walton can help. If you have questions about deductions, invoices, and other accounting procedures, request a free consultation with our experts.