The issue of deductions in payments to consumer goods companies by retailers – often called chargebacks - is a somewhat controversial subject, especially if you are a vendor being hit with the fines.

Both sides of that debate have some points in their favor, but we’ll leave that discussion for another day. Instead, we’re reacting to a new report from Attain Consulting Group based on a survey of vendors on the topic of deductions that contained some interesting data (see Highlights from the 2018 Retail Deductions Study).

Besides all the detailed survey responses, the report contained a maturity model for the evolution from not very good to leading practices on the part of vendors, as shown in the graphic below from Attain.

If you are a consumer goods company, which level of maturity is your deductions management program?

Which of course reminded us a similar maturity type model for retailers from our friends at Compliance Networks, a provider of compliance and vendor performance management solutions, as shown below.

Interesting to see both sides, is it not?

Any here is something interesting to note: both models end with practices that are a lot more collaborative, with a focus on supply chain improvement between the vendor and the retailer – collaboration that is very difficult on both sides if the focus is on chargeback dollars and with little technology is used to address root causes and automate processes.

An interesting look – only from SCDigest.

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