Understanding UNFI Deductions: Common Chargeback Types and How to Manage Them
Introduction
For many CPG brands, one of the most challenging aspects of working with any distributor is managing the various deductions (or “chargebacks”) that appear on your invoices. UNFI deductions are amounts that UNFI subtracts from what they owe you, usually to cover specific costs, fees, or allowances related to your products. These can range from a simple early payment discount to fees for delivery issues or marketing programs. If not monitored, deductions can eat into your margins and create cash flow headaches. The good news is that most deductions are predictable and manageable – once you know what they are for and how to address them. In this article, we’ll break down the most common types of UNFI deductions and provide guidance on how to dispute invalid chargebacks or avoid them in the first place. By understanding UNFI’s deduction codes and processes, you can keep more of your hard-earned revenue and maintain a healthier partnership with the distributor.
Deductions are not unique to UNFI – virtually all large retailers and distributors have mechanisms to charge suppliers for various reasons. From UNFI’s perspective, deductions help cover operational costs (like handling missing products or promoting your items) and enforce compliance with their policies. As a supplier, it’s important to differentiate between valid, agreed-upon deductions (e.g. an advertising fee you set up) versus incorrect or invalid chargebacks (e.g. a fee for something that wasn’t your fault). The key is to understand the common categories of deductions upfront. This knowledge will help you plan for predictable deductions as part of the cost of doing business, and quickly spot any invalid charges that warrant a dispute.
