Chargebacks Part 2 – Understanding Your Customer’s Motivation for Chargebacks

Sometimes customers are accused of using chargebacks as a profit center. However, most customers would much rather have the supplier follow their business rules than assess chargebacks. Here is why:

Efficient Receiving

Imagine your product arrives at your customer’s cross-dock facility but the labels on the cartons can not be scanned. Rather than quickly proceeding through the automated conveyer belt system for placement on trucks and subsequent store delivery, each carton has to be pulled off the conveyer. Then every carton has to be examined and handled by hand to correctly label the cartons. This slows down the delivery process and incurs extra labor cost.

Or imagine that your product is not packaged correctly for retail sale. Every carton has be opened, the contents repackaged, and then re-packed. Again this slows down delivery and incurs labor costs for the customer.

Many Departments

The two situations above illustrate potential issues when your product first comes in contact with your customer. But many departments are involved in the interaction of your products with the supply chain and final purchase by the consumer.

All of the departments need to function efficiently for your customer to be competitive. These departments include merchandising, marketing, warehouse and cross dock operations, transportation and logistics, and accounting. All of them want to contribute to great service for their customers and to minimize costs. Their objectives include:

  • Speeding up order processing
  • Reducing the time to market
  • Minimizing inventory costs while having the product the consumer wants, when they want it
  • Reducing freight costs
  • Reducing warehouse costs

In order to meet their objectives, many of your customers will have business metrics that give them an objective means to evaluate their supply chain. These depend on your performance and may include:

  • On-time deliveries
  • Accurate shipments
  • Lead times
  • Inventory carrying cost
  • Shelf space utilization
  • Warehouse labor costs
  • Store labor costs

Wowing the Consumer

Additionally, your retail customers must have accurate information to meet the needs of today’s hyper-competitive market place. Consumers expect an omni-channel shopping experience. That is, consumers expect a seamless view of the retailer regardless of whether they are in the physical store, using a mobile device, using the web site from a PC or tablet, viewing ads on television or in print, or perusing a catalog delivered in the mail.

In order to provide an omni-channel experience, your customer has to have all of their departments working in concert and all of them using up-to-date and accurate information about your products. Accurate visibility across the enterprise is needed for inventory, catalog, pricing and promotions. For example, in-store associates can reduce showrooming by being able to use an app to perform inventory lookup and compare pricing. The result is a win for the consumer, a win for your customer and a win for you.

Chargebacks Part 2 - Understanding Your Customer’s Motivation for Chargebacks by

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