Imagine this: You’re a CPG supplier, and things seem to be going well. Your products are moving, orders are coming in, and you’re tracking your invoices. Sure, there are some deductions here and there, but your team is on it—or so you think.
Then one day, your finance team does a deep dive and discovers something unsettling. Over the past year, hundreds of small deductions—some as little as $200, others creeping into the thousands—have added up to a staggering six-figure loss.
That’s money you thought you had. Money that should’ve gone into product innovation, marketing, or hiring. Instead, it’s sitting in the retailer’s pocket, quietly written off as “just part of doing business.”
But here’s the real kicker: 70-80% of suppliers don’t recover everything they’re owed.
Let that sink in.
Retailers Count on You Not Fighting Back
The truth is, retailers have built-in systems designed to take money back automatically. They flag shortages, pricing discrepancies, compliance issues—sometimes rightly, but often incorrectly—and deduct those amounts from what they owe you.
They’re betting you won’t dispute them all.
And they’re often right.
Most suppliers don’t push back on every charge. Why? Because deduction management is tedious. It’s time-consuming. Your team is already stretched thin handling sales, logistics, and product development. Filing disputes for what seem like minor deductions feels like a hassle.
So those “small” losses keep stacking up.
The Cost of Doing Business? Or a Preventable Leak?
Let’s break it down with a real-life scenario.
Sarah, a supply chain manager at a mid-sized food brand, was reviewing the company’s deductions. They were recovering about 65% of their disputed claims, which she thought was pretty good. But then she took a closer look at the deductions they weren’t even disputing.
She found:
Shipping deductions labeled as “shortages” even when delivery confirmations proved otherwise
Promotional discounts applied incorrectly, eating into margins
Chargebacks for non-compliance, even when all retailer requirements were met
At the end of the review, the total amount they’d let slide? $780,000 in one year.
Now, what could Sarah’s company have done with that money? Launch a new product? Expand into a new retailer? Hire more staff? Instead, it was just... gone.
Where Most Suppliers Go Wrong
Many brands think they have deduction recovery under control, but here’s where they get tripped up:
Only Fighting the Big Deductions – A missing $500 here, a $1,200 discrepancy there—it doesn’t seem worth the effort. But these add up. Fast.
Assuming the Retailer’s Data Is Correct – Retailers make mistakes. A lot of them. If you’re not double-checking every claim, you’re leaving money on the table.
Lack of a Systematic Approach – Tracking deductions manually? Using spreadsheets? That’s like using a bucket to bail water out of a sinking ship.
Not Looking for Patterns – If the same issue keeps popping up (say, “shortages” at one particular warehouse), it’s a sign that something deeper needs fixing.
How to Stop Leaving Money on the Table
So, what’s the fix? It starts with a mindset shift: Retail deductions aren’t a cost of doing business. They’re a problem that can be solved.
Here’s what the smartest suppliers do:
They Track EVERYTHING – Every deduction. Every claim. Every chargeback. It’s all logged and analyzed.
They Audit Their Own Data – Just because a retailer says you short-shipped doesn’t mean it’s true. They compare invoices, BOLs, and delivery confirmations.
They Fight for Their Money – No deduction is “too small” to dispute. If it’s invalid, it’s worth recovering.
They Use Experts Who Do This All Day, Every Day – Because, let’s be honest, your internal team has way too much on their plate.
The Bottom Line
Deductions might seem like a minor annoyance, but over time, they can choke your margins. And the longer you let them go unchallenged, the harder it is to get that money back.
HRG sees firsthand how brands unknowingly bleed revenue through overlooked deductions. We’ve also seen how the right strategy can turn things around fast.
So, the real question is: How much money are you leaving on the table?
Maybe it’s time to find out. Contact us.