In this article, learn about:
What Walmart Deductions Are and Why They Happen
How to Navigate the Dispute Process
Best Practices to Avoid Future Chargebacks
Smart Strategies with Automation and Analytics
For suppliers, deductions can feel like a black box—unexpected revenue loss that eats into your margins without warning. You ship the goods. You bill the invoice. Then, weeks (or sometimes months) later, a portion of your payment disappears with a cryptic code attached.
The truth? Many of these deductions are invalid and with the right tools and knowledge suppliers can recover lost revenue and prevent future deductions. But first, you need to know how to respond.
What are Walmart Deductions?
Walmart deductions, also called chargebacks, are adjustments that Walmart makes to supplier's payments. They typically happen when Walmart determines an issue—whether real or perceived—has happened in the supply chain. These deductions will come from Walmart’s Accounts Payable (AP) and will be subtracted from the supplier’s invoice total.
During regular account reviews, it is important for suppliers to note how frequently Walmart is issuing AP deductions. If suppliers see one (or two) deductions during each invoicing cycle, it’s likely a one-time, accidental issue. If suppliers find frequent and consistent deductions, it will be imperative to review the supply chain to avoid further deductions and fines.
Compliance Fines, which are different, are charges sent by Walmart to the supplier via AR invoices for violations of compliance rules (for example, the SQEP and OTIF programs). This is on top of what you already owe Walmart and will be charged via Accounts Receivable.
Related Reading: The Unofficial Guide to Disputing Walmart OTIF Fines
There are 75 common Accounts Payable deductions codes at Walmart that fall within five categories:
Shortages/Shipping
Pricing Discrepancies
Allowances
Returns
Miscellaneous
While the intention is to maintain high supply chain standards, these deductions are often issued broadly. Walmart and other large retailers have complex supply chains that may not have the data or context to fully understand the issue. The responsibility of the supplier is to provide proof to the issue.
The financial impact ranges greatly from single digit percentage points to over 30% of invoice totals. Which means suppliers could see a loss of tens of thousands of dollars.
Most Common Deduction Codes
Understanding the most common deduction codes is key to effectively disputing them.
Code 10 - Price Difference as Documented: Triggered when Walmart Systems find there is a pricing discrepancy between the PO and Invoice.
Code 22 - Goods Billed not Shipped: Walmart expects ASN to be sent before the shipment is received. If they are missing or submitted after delivery, suppliers will be hit with a deduction.
Code 25 - No Merchandise Received for Invoice: Walmart requires accurate Proof of Delivery documentation. If this is missing, unclear or late, the chargeback comes fast.
Code 30s – Shipping Errors: Codes 30-39 include various shipping related issues, like missed appointments, incorrect carriers, or noncompliance with routing.
Each of these deductions comes with its own documentation requirements and response constraints. Historically, the most challenging codes that suppliers dispute are related to invoicing errors. While these types of AP deductions are vast amongst the codes Walmart typically generate, the true challenge comes down to documentation and discrepancies between purchase orders, invoices, and actual goods received.
For a complete list of Walmart Deduction Codes, download Walmart Deduction Codes Explained eBook.
Fortunately, there is a clear path forward for suppliers to manage their deductions instead of being managed by them.
How to Navigate the Dispute Process
While Walmart's invoice deduction dispute process is convoluted, the steps below outline how suppliers can navigate the process effectively. Here is your step-by-step guide:
Step 1. Access Retail Link
Start by logging into Walmart’s Retail Link portal – this is where all deduction activity is housed.
Step 2. Open APDP (Accounts Payable Disputes Portal)
This is where the deduction data is located, inside APDP, suppliers will find:
Deduction Codes
Charge amounts
Associated documentation
Dispute history
Step 3. Locate the Deduction
Use the reference number from the remittance report to track down the specific deduction. Check the reason code and add any notes provided.
Step 4. Review All the Details
Is the deduction valid? Look for signs of error:
Price on PO vs. Invoice (should match 1 for 1)
Confirm Delivery and Shipping documents
Compare ASN timestamps to required deadlines
Even one inconsistency within Walmart systems can give suppliers grounds for disputes.
Step 5. Gather Documentation
Suppliers need solid evidence:
Invoice and Purchase Order Copies
Shipping and Receiving documents (BOL, POD)
ASN Confirmations
Email or ticket threads with Walmart reps and carriers
Keep the documentation organized and dated. Walmart systems recognize clarity.
Step 6. Draft a strong explanation as to why this deduction is invalid
Disputes are submitted through APDP with an attached explanation. Suppliers' response should:
Be brief, clear, and professional
Use bullet points if helpful
Point directly to the evidence uploaded
Avoid emotion – use facts
Step 7. Submit the Dispute
Once the documentation is ready and the case is outlined, Suppliers should submit the dispute directly in APDP. It is best practice for suppliers to keep a record of submission dates and details if there is follow-up needed.
Step 8. Monitor the Status
Disputes often take time. Track the status in APDP and be ready to respond if more information is requested. Suppliers should stay consistent in tone and detail if there is a follow-up.
Step 9: Escalate if Needed
Some deductions may require escalation:
Suppliers can reach out to Walmart's Supplier Help Portal
Suppliers can loop in their buyer if the deduction seems invalid
Suppliers should document all contact for records
Deduction Disputes may be Denied
Even with proper documentation and evidence, some claims are still denied. This can stem from several issues, but the most common dispute denials are due to one of the following reasons.
Time Constraints (Missed Deadlines)
Incomplete Documentation
Dispute Filed Against the Wrong Code
Misunderstanding the Root Cause of Deduction
If a supplier's dispute has been denied, they are able to resubmit more detailed documentation. Persistence often pays off.
Best Practices to Avoid Future Chargebacks
While disputing AP deductions can recover lost revenue, prevention is even more powerful. At SPS Commerce, we know the proven tactics to reduce the number of deductions from the start:
Align Internal Team: Ensure logistics, sales, forecasting, and invoices are working from the same data. Triple check everything.
Automate Shipping and Delivery Process: Manual errors are one of the top causes of deduction issues. Automating submission and validation can cut down on late or missing notices.
Use Deduction Dashboards: Monitoring analytics and trends by deduction code, customer, and time period helps spot recurring issues.
Audit Routinely: Setup weekly or biweekly audits of invoices and reports. Catch errors early- before they turn into deductions.
Manual vs. Automated Disputes
Disputing deductions manually has proven to work; however, it is time consuming and error prone. Suppliers will need to pull reports from Retail Link, organize backup documentation, build cases one by one all while simultaneously tracking responses.
Automated Deduction Software streamlines the process from start to finish. SPS Commerce, for example, pulls in your data, matches deductions to documents and flags which ones are worth disputing- all automatically.
Smart Strategies With Automation and Analytics
Nine steps, one deduction. Multiply that by a few hundred codes a month and the math stops working. For most suppliers, AP bandwidth, not dispute validity, is what caps how much revenue actually gets recovered.
SPS Revenue Recovery was built for suppliers dealing with exactly that. It pulls your deduction data automatically, matches each one to the documentation Walmart requires, pre-qualifies which claims are worth pursuing, and submits compliant disputes through workflows built around Walmart's own codes and dispute processes. Those workflows are designed to preserve the retailer relationship rather than strain it, which is what keeps win rates up over time.
The part most tools skip is what happens after recovery. Root-cause insights show which upstream breakdowns keep producing the same codes, so a recurring ASN timing problem gets fixed once instead of disputed every cycle. That's the difference between recovering revenue and stopping the leak.
Get Paid. Get Better.
Brands lose 5 to 7% of annual revenue to deductions, chargebacks, and compliance fines, and roughly 70% of disputable deductions are never challenged. Most teams start with a complimentary, no-obligation recovery audit that shows the real dollar amount available for recovery. Average time to data import is 4 days, and first recovered revenue typically lands within 14 days.
Schedule a meeting with an SPS team member to see what Walmart owes you.