Annual Defective Allowance Reset FAQs
Below are answers to frequently asked questions about the annual defective/swell/soft goods allowance reset.
1. Why are my defective allowance rates resetting?
Defective/swell/soft goods allowance rate will be reset annually consistent with the terms of your Supplier Agreement to ensure your allowance accurately reflects actual defective rates over time. This may impact the defective/swell/soft goods allowance rate for supplier agreements where the actual defective rate for the prior period differs from the current defective/swell/soft goods allowance rate.
2. For which agreements will these rates apply?
The date and terms of each agreement determines which agreements will be updated. If the agreement was effective on or after 2/1/2024 and before 10/1/2025, and it includes point 2 under the Returns section of the Business Terms Agreement (BTA) referring to "Annual Allowance Adjustment" then it will be updated.
3. Where can I see my agreements?
Agreements are located at Supplier One > Account > Supplier Profile > Agreements.
Once your rate is reset on February 1, 2026, you can view the updated rate by clicking on Review Business Terms in your agreement record and as an addendum at the end of the BTA by clicking on Review Agreement.
4. Where can I find my new rate in the Claims & Return Scorecard (CARS) dashboard?
To view your new rate for impacted 9-digit Agreements for FY26, go to Supplier One> Performance > Return Trends, click the Trend tab, and look under L52W allowance rate ending Sept FYE26.
5. How was my rate determined?
- Defective Allowance rates are determined by comparing claims to purchases for the annual period ending September 30, 2025.
- Formula: Defective allowance rate = Total Claims Amount ($) / Total Invoice Amount ($).
The rate is calculated at the eight-digit level but only includes invoices and claims from nine-digit agreements that are effective on or after 2/1/2024 and before 10/1/2025, and point 2 under the Returns section of the Business Terms Agreement (BTA) refers to "Annual Allowance Adjustment".
6. When does this go into effect?
The rate goes into effect on 2/1/2026 and only applies to agreements that are effective on or after 2/1/2024 and before 10/1/2025, and which include point 2 under the Returns section of the Business Terms Agreement (BTA) refers to "Annual Allowance Adjustment".
7. Why doesn’t this match my customer returns rate?
Claims include several unsaleable circumstances that occur across Walmart’s retail operations. Customer returns can influence claim rates but are not the only factor.
8. Where can I find item level detail?
On the Claims tab of the Claims and Returns Scorecard (CARS) in Supplier One (Performance > Return Trends), select the timeframe and scroll down to the “Item detail” card.
9. Who do I reach out to if I have additional questions?
- To submit questions or report issues with the Claims and Returns Scorecard in Supplier One, suppliers should click Help > Manage tickets.
- If you still have questions after you have thoroughly reviewed the communication, the FAQs and the Claims and Returns Scorecard (CARS), you can send additional questions to carssupport@walmart.com.