EDI Chargebacks are the “offset of additional expenses” EDI powerhouses use to enforce compliance to their requirements. Basically we are talking about financial penalties they impose when something is wrong, or missing. Usually we are talking about buyers charging their suppliers for anything out of the “normal order”. This normal order would be the strict adhesion to set protocol. Anything that needs human intervention costs additional time (and therefore money) and disrupts the process, buyers want to pass this cost to the supplier.

This started out as a measure to motivate companies to start EDI. However, some have noticed this could generate extra profits at the expense of suppliers. Penalties vary a lot, and can range from EUR 10 per order that cannot be handled via EDI, to EUR 100 for a dispatch advice containing errors. As standard, these penalties are directly subtracted from payment. Since payment can be longer than 45 days later: good luck trying to complain..

Some of the issues we have seen:

  • complexity of the exact issue, and find out why a penalty is demanded

  • non-clarity of the height of the penalty, or penalties change over time

  • frequency of the penalties (as some are applied often, but with a low penalty and high frequency, suppliers tend to “let it skip”)

Most common problems:

  • Despatch advise is not sent within the specified time limits (or not sent at all)

  • Problems with the SSCC label (the label on the pallets)

  • Wrong number of articles is sent

  • Wrong article is sent

  • Invalid product-information (sizes, weights etc.)

Some of these issues are easy to solve, some are very hard. However, you must at least have an idea what it would take to solve these problems.

Neksus can help. Contact us when you run into chargebacks: we can avoid these penalties, and restore your margin!