Deduction Avalanche: Why Small Errors Turn Into Big Losses Fast
- The HRG Team
- 7 hours ago
- 1 min read
Most margin loss doesn’t start with a six-figure deduction.
It starts with something small. A bad barcode. A dock delay. A missed PO field.
Each one seems harmless. Until they repeat.
The Compounding Effect
A fictional health and wellness brand sees $300 deducted for short shipment. It happens again the next week. Then on two more SKUs. By the end of the quarter, $46,000 has vanished across five retailers.
Why?
The packer didn’t adjust to a new box size
Labels were misaligned on 8% of shipments
Their 3PL misrouted two pallets
None of it is catastrophic. All of it expensive.
Retailers Respond to Patterns
The more frequent the error, the harsher the penalty. You go from occasional fines to:
Escalated enforcement
Delisting risk
Reduced OTIF scores
Tighter audits and longer payment cycles
Break the Cycle
Flag recurring deductions early
Invest in root cause analysis
Escalate issues with suppliers or logistics partners
Leverage HRG to dispute and fix at scale
Avalanches start with snowflakes. Deductions are no different.
Ready to stop the loss before it starts? Book a strategy call with HRG today:
