How to File a Return to Vendor Claim
What is a Return to Vendor Claim?
Return to vendor, vendor claims, and vendor returns all refer to the act of filing a claim against your vendor for damages, shortages, or incorrect products in their product shipment. This contrasts to filing a freight claim, when you file a claim against your carrier for losses or damages that they caused in transit.
When to Return to Vendor
- If your vendor loaded the trailer and did not allow the carrier to inspect it, then you would use the return to vendor process, rather than filing a concealed damage claim. Carriers typically have the right to inspect a load when it is handed off to them.
- If your vendor sent you the wrong product.
- If you need to make a return to your vendor due to your own ordering error (in this case the vendor may charge you restocking or administrative fees).
At the Time of Delivery
You should always inspect your shipment, and immediately note any losses or damages. The driver will sign your notes as a witness to back up your vendor claim.
The Return to Vendor Claim Process
You should submit your return to vendor claim via email, mail, or fax to ensure that you have a paper trail. To ensure that you have included all necessary information, you should use a return to vendor claim form. You would send this vendor claim form to your vendor and send a copy to your company’s accounts payable department. This ensures that your company does not pay the invoice.
You can also download our generic Return to Vendor Claim Form here. This claim form is universally accepted so you do not need to find a specific form for each of your vendors.
Vendor Return Details
When you file the vendor return claim, collect the following information from the purchase and provide them with your claim:
- Claimant contact information
- Carrier contact information
- Shipper contact information
- Reason for vendor claim
- Purchase order number
- Bill of lading number
- Delivery receipt – a copy is acceptable
- Load date
- Ship date
- Seal number
- Description of the product
- Part number
- Value per unit
- Total value
Return to Vendor Supporting Documents
You should also include the following documents to support your vendor claim:
- Original shipment invoice
- Notification of loss
- Delivery receipt (copy is acceptable)
- Invoices for repairs or replacements
- Copies of request for inspection required if claiming damaged product or concealed
- Inspection report, if completed
- Waiver of inspection by carrier
- Explanation of how losses were calculated
- Photographic evidence of any damage
Return to Vendor Timeline
Your deadline to file a return to vendor claim is typically within 7 business days of delivery. This is quite a contrast from the 9 months given for freight claims! For this reason it is important to unload and inspect your shipment as soon as possible after receiving it.
What to Do With the Vendor’s Freight
You should contact your vendor directly for instructions on what to do with the shipment. The vendor may request that you ship it back with a specific carrier, or dispose of it locally. If there is a large amount of product that makes it costly to dispose of, in most cases, it is the vendor’s responsibility to arrange and pay for disposal.
If you pre-pay the return freight, you may be able to claim that cost back on your return to vendor claim. Whether or not you are reimbursed for the return freight will depend on your relationship with your vendor and the circumstances of the claim. For example, if you are making a vendor return because you ordered the wrong product, then you would be required to pay for the return shipping. Conversely, if it was the vendor’s error, they would be more likely to pay for the shipping. Your vendor will usually ask you to ship Collect, in which case the vendor will pay the shipping charges.
After the Return to Vendor Process
After you file your vendor return, the vendor should either pay your vendor claim, deny your vendor claim, or offer a firm compromise within the billing cycle (usually within 30 days). In most cases, you will receive a credit, although in some cases you may be reimbursed in cash.
If the vendor does not reimburse you, then you would typically deduct the damages from that invoice.
About the Return to Vendor Process
The return to vendor claim process does not follow the same strict rules and regulations as the freight claim filing process. Vendor return claims are not governed by the Carmack Amendment or any other legal body – they are simply governed by the vendor’s policies and their relationship with you.
A good vendor will accommodate you in order to keep your business. If you find that your vendor is not cooperating with reasonable claims, you may decide to cease doing business with them or even take legal action.
You are not even legally required to file a vendor claim – while it isn’t recommended, you could simply deduct the amount from your invoice. However, filing a return to vendor claim is the best practice, because it keeps everyone informed and it provides a paper trail for your claim.
In conclusion, filing a return to vendor claim will help you recoup losses for damages, losses, or incorrect shipments that were caused by your vendor rather than your carrier.
Want to simplify the return to vendor filing process? Download our generic Vendor Claim Form here.
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