Home Depot Deductions Overview
Annalee Foley avatar
Written by Annalee Foley
Updated over a week ago

Home Depot, unlike other retailers, has a rather condensed list of possible deduction codes. Home Depot refers to individual deductions as "chargebacks". Chargebacks are distributed against an invoice and are rolled up into one "Dispute Package".

Types of Chargebacks at Home Depot

Below is a list of the chargeback codes:

  • Shortage

  • Pricing discrepancy

  • Trade discount

  • Pallet

  • Freight

  • Other charges & fees

Trade discounts are contractual, however, are treated as a chargeback at Home Depot. The one exception here is that, as of May 2024, Home Depot has disabled the ability to dispute these trade discount chargebacks. It is important to make sure your EDI mapping is accurate and up to date to avoid excessive trade discount chargebacks and improve cash application efficiency.

There are few reasons a supplier would get pallet or freight chargebacks at Home Depot. Additionally, "Other Charges & Fees" chargebacks are a new addition as of 2024, and likely will be sparingly used.

It is important to note that since chargebacks are made against a single invoice, all chargebacks for that invoice must be disputed at the same time. This is a key difference compared to other retailers, and is important to understand in order to have the best chance when disputing at Home Depot.

Disputing Home Depot Chargebacks

Home Depot allows suppliers to dispute back 12 months based on the chargeback date. Since it is often the case that chargebacks are not dispersed until 1-2 months after the invoice is sent it is common to see invoices from 14 months back when disputing.

As a result of Home Depot's ordering process, suppliers could be sending a large volume of invoices to the retailer, which can lead to a high volume of Dispute Packages. To avoid a backlog of Dispute Packages it is recommended to dispute as they are distributed or once a month to keep up with volume.

Home Depot often requires a Proof of Delivery document as proof documentation for disputing, even if you are a collect supplier. Disputing in a timely manner can help increase the likelihood of being able to receive a POD from the carrier.

Basics of the Dispute Process

Suppliers will often find that Shortage chargebacks are the most common deduction at Home Depot. Once a Dispute Package has been disputed, Home Depot generally responds within a few weeks. Compared to other retailers, they are generally fast in their response time.

It is also important to be checking on submitted Dispute Packages as Home Depot may come back and request further proof documentation or context. As a supplier, it is critical to respond to these requests promptly, as you only have 30 days to respond before Home Depot closes the dispute. At this point, the only action would be to open a dialog, and this could drag out the process considerably.

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