Annual Defective Allowance Reset FAQs

Updated 1 week ago ​by Merch Transformation Change Management

Below are answers to frequently asked questions about the annual defective/swell/soft goods allowance reset.

1. Why are my defective/swell/soft goods allowance rates resetting?

Per the terms of your recently negotiated supplier agreements, defective/swell/soft goods allowance rates will be reset annually to ensure your allowance accurately reflects actual defective/swell/soft goods allowance rates over time.

2. For which agreements will these rates apply?

The reset applies to 9-digit agreements that are effective on or after 2/1/2024. For additional information, please review the Returns Policy section of your Business Terms Agreement (BTA).

3. Where can I find my new rates?

The rates listed in the effected 9-digit agreements and corresponding Business Terms Agreements (BTA) will not change. To view the new rates for impacted 9-digit agreements for FY26, go to the Claims and Returns Scorecard (link below), click the Trend tab, and look under L52W allowance rate ending Q3 FYE25.  

  • Impacted suppliers: Supplier One > Performance > Return Trends 

4. How was this determined to be my rate?

  • Defective/swell/soft goods allowance rates are determined by comparing claims to purchases for the 52-week period ending Q3 of Walmart’s fiscal year.
  • Formula: Defective/swell/soft goods allowance rate = Eight-digit Total Defectives x (1 + Handling Fee %)/Eight-digit Total Invoice Amount ($).
“Eight Digit” is the 6-digit vendor number + 2-digit department number.
The calculation is executed at the 8-digit level, but only includes Invoice Amount ($) and claims from 9-digit agreements that are effective on or after 2/1/2024.

5. When does this go into effect?

The new rates go into effect on 2/1/2025 and only apply to agreements that are effective on or after 2/1/2024.

6. What is Invoice Amount ($)?

Invoice Amount ($) is the amount invoiced to Walmart after line-item discounts (e.g., trade discounts, cost discounts) and allowances, but before any cash discounts from the supplier payment terms.

7. How can I validate Invoice Amount ($)?

  • Option 1 (simplest): All invoice data/remittance details are sent to suppliers via EDI. Simply download your EDI-820 to get the invoice data used in the Claims and Returns Scorecard (CARS).
  • Option 2: Go to APIS (Retail Link > Apps > APIS > Checks) and pull the check details for a given invoice. Note: Using APIS requires you to click on each check number and download details individually.
  • For both options: Refer to the “Invoice Amount ($)” column in the exported file and apply the below filters to match what is in the Claims and Returns Scorecard (CARS):
    • Division: Exclude divisions 7 (DC chargebacks), 13 (return center), and 18 (Sam’s).
    • Store: Exclude stores 9000 (Home Office activity or payments unrelated to purchases) and 9462 (Dotcom return center, also unrelated to purchases).
    • Deduction Code: Filter to only show deduction code 0.
    • Invoice Amount: Filter to show only amounts greater than $0.

8. What is the timing for when an Invoice Amount ($) is shown in the Claims and Returns Scorecard (CARS)?

The date Walmart issues payment (sometimes referred to as the “check date”) is used to determine the timeframe for which an Invoice Amount ($) will show in the Claims and Returns Scorecard (CARS).

9. What about claims that I do not agree with from the Returns process?

All activity is assessed per the terms of the supplier agreement. For additional information, please review the Returns Policy section of your Business Terms Agreement (BTA). Suppliers may dispute returns claims using Walmart’s dispute resolution process in the Accounts Payable Disputes Portal (APDP), accessible through Retail Link.

10. Some sequences were not updated while others were. Will my rates for those also change?

That will be determined by the date of your agreements for those corresponding sequences. The sequences changing now are from agreements that are effective on or after 2/1/2024.

11. Why doesn’t this match my customer returns rate?

Customer returns can influence claim rates but are not the only factor. Claims include several unsaleable circumstances that occur across Walmart’s retail operations. For additional information, please review the Returns Policy section of your Business Terms Agreement (BTA).

12. Where can I find item-level detail?

To view item-level detail, go to the Claims and Returns Scorecard (link below), click the Claims tab, select the timeframe, and scroll down to the “Item detail” card. 

  • Impacted suppliers: Supplier One > Performance > Return Trends 

Have additional questions?

  • For help with the Claims and Returns Scorecard (CARS), click Help > Manage tickets in Supplier One.
  • For help with disputes, reach out to carssupport@walmart.com.

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