Shortage deductions and freight claims look like the same problem. Missing product, missing money. But you will be surprised to know they are two entirely different processes - filed against different parties, through different portals, with different documentation requirements and timelines. Mixing them up is one of the most common ways suppliers absorb losses they should have recovered.
This article breaks down exactly how each works, when to pursue each path, and how to handle both at once.
A shortage deduction occurs when a retailer's DC (Distribution Center) records fewer units than your invoice or ASN (Advanced Shipping Notice) states. The retailer deducts a percentage from the invoiced amount, and it shows up on your remittance. You can dispute the shortage through the retailer’s portal, and the ability to recover depends on the validity of the claim.
Here's how it works at each retailer:
Walmart - Accounts Payable Dispute Portal (APDP)
Walmart uses specific codes that determine the dispute path and required documentation.:
Code 21 - Concealed Shortage: product was missing from inside an intact carton, with no damage noted at delivery.
Code 22 - Merchandise Billed Not Shipped: Walmart's system shows the item was invoiced but not received at all.
Code 24 - Carton Shortage / Freight Bill Signed Short: the BOL or delivery receipt was signed for fewer cartons than invoiced.
Code 25 - No Merchandise Received for Invoice: No receiving record exists for the shipment at all.
Unlike Walmart, Amazon doesn’t designate codes, hence they appear as quantity variances on the invoice. The strongest disputes combine ASN data with carton-level packing records. Usually, Amazon’s window lasts 30 days and their default position is that their receiving count is accurate, which places the burden on the supplier.
Target shortage disputes are filed through Synergy, within the Partners Online portal. The two most common shortage codes are:
Code A030 - Carton Shortage: fewer cartons received than the BOL indicated.
Code A034 - Unit / Internal Shortage: correct number of cartons received, but fewer units inside than expected.
Target offers one of the more supplier-friendly dispute windows in retail lasting up to 18 months from the deduction date. That said, older deductions are harder to win on documentation grounds, so filing early is still strongly recommended.
Home Depot - Merchandise Payables Self-Service Portal (MP-SSP)
Home Depot disputes are filed through the MP-SSP, accessible through the Supplier Hub. Shortage deductions use the reason code "SHORTAGES," and any shortage claim over $25 is eligible for dispute. The portal is straightforward, but documentation requirements are strict (ASN, BOL, and a signed POD are some documents used).
Costco - Vendor Dispute Management Dashboard (VDMD)
Disputes are managed through the Vendor Dispute Management Dashboard (VDMD) in the Costco Vendor Portal. Suppliers submit a Standard Supplier Claim Form with all relevant supporting documentation. The standards are higher, expecting clean sets of supporting documentation for claims.
A freight claim is a formal demand for compensation filed directly against the carrier when the product is lost, damaged, or short-delivered while in the carrier’s custody. This is not a retailer dispute; it's a separate legal process governed in the U.S. by the Carmack Amendment.
What the Carmack Amendment Actually Means For Suppliers?
The Carmack Amendment is the federal statute that establishes carrier liability for loss or damage during shipment. In practical terms, this means if your product was short delivered and you can prove the carrier received the full quantity at pickup (through a signed BOL) you have a legally enforceable basis for a freight claim. But here’s the kicker: the freight claim process depends on one action that has to happen at the time of delivery: noting the shortage on the BOL/POD before the driver leaves.
Filling Timelines:
Initial claim filing: Claims must be filed within 9 months of the delivery date. Review your carrier agreement, as some carriers shorten this standard window.
Carrier acknowledgement: A high-rated carrier acknowledges the claim in 30 days, whereas a less organized carrier may take up to 120 days to acknowledge the receipt of the claim.
Resolution: They may take anywhere from 60 days to over a year to fully resolve.
Yes, and in fact you should. If a visible shortage happens in transit, the right move is to dispute the retailer deduction through their portal and simultaneously file a freight claim against the carrier.
Here’s why this matters more than most suppliers realize. Most retailer dispute windows close in 30 to 60 days. On the other hand, freight claim resolution can take anywhere between 60 days to almost a year. If you wait for the freight claim to resolve before filing the retailer deduction, you will almost certainly miss the window and lose revenue.
Here’s an example of how this plays out:
You ship 500 units to a Walmart Distribution Center. The carrier delivers 480 units. The receiving team notes the shortage on the BOL at delivery. Two things happen simultaneously:
Walmart issues a Code 24 deduction for the 20 missing cartons on your next remittance.
You have a documented, carrier-acknowledged shortage that forms the basis of a freight claim against your carrier.
What should you do here? File the Walmart APDP dispute within 30 days using the signed BOL and POD. At the same time, file a formal freight claim with the carrier for the value of the 20 missing units, citing the noted shortage on the delivery receipt.
If Walmart denies the deduction dispute, the freight claim may still recover the value. If the carrier pays the freight claim, that doesn't change your obligation to dispute the Walmart deduction separately. Remember, both of them are independent financial recoveries.
Not every shortage situation supports both filings. Here's how to determine which path applies:
Concealed shortage (intact carton, missing units inside) - Retailer deduction dispute only. No carrier notation exists, so freight claim liability is very difficult to establish.
Product damaged but not shorted - Freight claim only (unless the retailer also deducts for the damage).
Shortage not noted at delivery, clean BOL - Retailer deduction dispute only. Carrier liability is nearly impossible to establish without a noted discrepancy.
Mistake 1: Treating Both Processes as One
The most prevalent error is filing a retailer deduction dispute and assuming the freight claim is either unnecessary or somehow covered. The processes are separate, the timelines are different, and both recoveries require independent action.
Mistake 2: Following strict documentation habits
Most suppliers know they should note shortages at delivery, but the breakdown happens operationally. Usually, drivers are in a hurry and the receiving teams are under pressure unload the supply. The fix is procedural: make BOL notation a required step in your carrier handoff process, not a best practice that gets skipped when things are busy. A clean BOL signed lays a strong foundation for any dispute. Photographing carton contents before sealing, weighing pallets at pickup aren't just best practices; they are the difference between a winnable dispute and a written-off loss.
Mistake 4: Manual Dispute Management at Scale
Disputing a single shortage claim manually - pulling the documentation, logging into the retailer portal, building the dispute package, and filing takes approximately 15 to 20 minutes per claim. For a supplier managing hundreds or thousands of deductions across multiple retail accounts every month, that adds up to an unsustainable workload. The result is prioritization by size, where AR teams dispute only large dollar value deductions and write off the smaller ones. These smaller deductions aggregate into significant annual losses. Adding automation to this layer will change the calculation entirely.
Both processes are documentation-heavy, time-sensitive, and hard to track at volume. iNymbus automates the dispute process for retailer chargebacks across Walmart, Amazon, Target, Home Depot, and Costco. The iNymbus bots will pull deduction data, assemble documentation, file within required windows, and track outcomes so your team spends time on analysis and recovery rather than manual portal work. It also files your freight claims, reducing all the manual heavy-load work for your team.
Schedule an audit call to see how it works for your business.