Tariffs don’t just change costs. They change deductions. Because the moment your costs move, you’re in a race between reality and the retailer’s system.

February is when the holiday glow fades… and the math gets loud. You shipped hard in November and December. Sales looked great. Then the “after” shows up: returns, refunds, disputes, and retailer chargebacks that quietly claw back cash when everyone’s already sprinting into the new year.

Last year, you could win a dispute with a decent note and a screenshot. This year, that same package gets denied because it’s missing the lot code, the timestamp, the condition photo, and the proof of delivery. It feels personal. It’s not.

There are deductions you disagree with. And then there are deductions you shouldn’t even be looking at—because you already dealt with them.

January is when retailers try to get their house back in order. They’ve got seasonal inventory to clear, new sets to build, and demand that usually cools off after December. One study found retail spending drops an average 22.4% between December and January.

Q1 is the quarter where everyone asks the same question: “Did we actually make money on that holiday volume?” Because the truth usually arrives late—through promotional billbacks, pricing deductions, and post-audit debits that land weeks (or months) after the product shipped. NRF’s Retail Monitor data showed 2025 holiday sales (Nov. 1–Dec. 31) grew 4.1% . That’s a lot of invoices, a lot of promotions, and a lot of opportunities for the math to drift. And drift is exactly how

Learn how to tackle defective deductions in Q1 returns. Stop losing money to defective deductions with our expert guidance and boost your margins.

1) Split-shipment confusion Holiday fulfillment is messy. Partial shipments are common. The dispute comes when the customer (or retailer’s system) treats “partial” as “missing.” What to save: shipment IDs, carton tracking, carrier scans by package, and timestamps showing each leg of fulfillment. 2) “Porch claims” and delivery disputes Package says “delivered.” Customer says “never received.” Retailers increasingly push for faster resolutions to protect customer experience—th

Explore the intricacies of Q1 2026 Supply Chain Risk: Freight, AI, and Deductions. Learn how deductions impact your business strategy.

Discover the 2026 Grocery Deduction Hotspots! Learn how shortages and unsaleables impact profits and how to tackle grocery deduction challenges.

Discover how to tackle promo deductions effectively and prevent margin leaks. Learn strategies to manage promo deductions in a tariff-heavy economy.