Supplier refund: 3 counts to check before a claim

Key takeaways

• Match the unit cost to the invoice.
• Count received units in the unit the invoice uses.
• Separate usable and unusable stock, and photograph the problem.
• Choose a remedy, document the claim, and have another person check it.

When a claim goes out with a vague count or a price nobody can trace, the supplier either pushes back or pays less than the shop was owed. At an independent shop the job is often split. One person counts the delivery at the back door, and a manager approves the return later. That gap is where weak claims tend to start, because the person approving rarely saw the cartons.

This post covers three counts to make before you claim anything. The first is the unit cost you actually paid. The second is how many units arrived. The third is how many of those units you can still sell. Steps 1 through 3 take the counts in the order you would do them on a real delivery. Steps 4 through 6 turn the counts into a remedy, a written claim, and a manager check. Your supplier's own return terms still decide what they will accept, so read those before you send anything. What this post gives you is a way to make sure the numbers in your claim match the numbers on your shelf and on your receiving sheet.

1. Confirm the unit cost you paid

Start with the purchase record, not with what you remember paying. If the invoice shows a discount, a freight charge, or a credit carried over from an earlier order, note each one on its own line rather than folding it into a unit cost in your head. A claim built on a number you guessed is easy for the supplier to reject.

Credits deserve their own line. If an earlier order left a balance, or the supplier issued a credit for a past short shipment, the current invoice may show a net price that does not match the price you agreed. Write the gross unit cost and the adjustment separately, so a reviewer can see both. A net number with no explanation invites questions you cannot answer from the sheet.

The reason this matters is that a refund request is much easier to check against what you paid than against what the item sells for on your floor.

Keep buying and selling prices apart in your records as well. Frappe's documentation for ERPNext describes price lists that let one item carry more than one price: "You can create multiple Price Lists for one Item in ERPNext to track the Selling and Buying Price of an Item separately." ( Frappe, Item Price) You do not need ERP software to get the same benefit. A spreadsheet with one column for what you paid and another for what you charge, kept on the same row, prevents a common mix-up at the receiving desk.

Record the date the cost was posted, too. Microsoft's documentation for Business Central says that "Together with the posting date and sequence, the costing method also influences how the cost flow is recorded." ( Microsoft, Costing methods) That passage is about how software records cost flow, not about your supplier, but it points at a habit worth copying. Keep the invoice date and the date it was entered in your own records. If you received the same product on two invoices at two prices, the claim has to say which invoice it refers to. Otherwise the supplier may pick one for you, and it may not be the one you meant.

Before you move on, read the unit cost aloud to the other person on the delivery. If they write down a different number, stop and sort it out now, while the invoice is still on the desk.

2. Count what arrived, not what the packing slip says

Open every carton and count. The packing slip shows what the supplier intended to send, and the invoice shows what they billed. Neither one proves what came through your door. Count each line and compare the result to your purchase order, not only to the slip. If the slip and your count disagree, write both numbers down and hold off on deciding which one is right. A difference is often a carton packed by someone else, or a line split across two boxes that were opened at different times.

Count in the unit the invoice uses. Mixed units produce claims that look like shortages and turn out to be arithmetic. The fix costs nothing. Write the conversion down the same way every time.

Use a blind count when you can. This means the person counting does not see the expected quantity first. It is easy to see what you expected and stop there. When the counter writes a number before looking at the purchase order, the two numbers can be compared honestly afterward. If they match, you have a clean result. If they do not, the disagreement is information, not a failure. For a broader stock check, see physical inventory reconciliation.

Partial deliveries need their own note. If the supplier said part of the order would follow, write that on the sheet with the date, and count the balance when it arrives. A shortage claim on something already promised as a later shipment will be questioned, and it should be.

A count written on the day of delivery is far easier to defend than one reconstructed a week later, when someone asks why a shelf is short and nobody can say when the cartons were opened.

3. Count what you can actually sell

This is the count that is easiest to skip, and it is the one that most directly decides which remedy fits. A unit can arrive, match the invoice, and still be unusable. A box can be crushed at one corner. A seal can be broken. The color or size can be wrong. The unit may be intact but scratched or soiled in a way your customers would notice.

On the receiving table, sort the units into two groups: the ones you can sell as delivered, and the ones you cannot. Count each group separately. Write the bad count with a short reason in plain words, such as "crushed corner, four units" or "wrong color." Take a photo of a representative unit and of the damaged carton before anything is moved, repacked, or opened further. A photo taken after the units have been handled is weaker evidence than one taken at the table.

Keep the groups apart in storage, too. If damaged units go back on the same shelf as good ones, the count you made is no longer the count you can prove. A marked tote or a labeled area is enough. Time-sensitive items deserve the same care. If an item carries a date you need to watch, note any units that arrived past it separately from units that were physically damaged, since the two problems may call for different conversations with the supplier.

Separating the groups matters because different problems lead to different requests. The OpenStax example includes two separate events on the same purchase. It records 25 wrong-color phones returned for a full refund. ( OpenStax worked example) Then a second problem came up: "On June 8, CBS discovers that 60 more phones from the June 1 purchase are slightly damaged." ( OpenStax worked example) The business kept those phones and received a purchase allowance of $8 for each phone. ( OpenStax worked example) If the counts had been lumped together, the claim would have asked for the wrong remedy for at least one of them.

Decide the remedy only after both groups are counted. A shop that decides first tends to count what it expected to see.

Illustrative example: separate the received and usable counts

Suppose a delivery contains 60 units: 50 are usable and 10 have crushed corners. The received count is 60, and the groups reconcile because 50 plus 10 equals 60. Photograph the damaged group and keep it apart. If those units cannot be sold, request a return for the 10 damaged units, subject to the supplier's terms. Do not describe the delivery as short: all 60 units arrived.

4. Choose the remedy that matches your counts

Once you have the counts, you have a few possible requests. They are not interchangeable, and choosing the wrong one wastes time on both sides.

Return the units for a refund. This fits units that are wrong, unusable, or not what you ordered. Before you ship anything back, check your supplier's return terms. Find out whether they need an authorization number, a specific form, or a particular address. A return sent without agreement can be refused, or it can sit in a receiving area while everyone argues about it. Ask for the return authorization in writing first, and put its number on the claim.

Keep the units and ask for an allowance. This fits units you can still sell, perhaps after a markdown or with a note to the customer. Whether your supplier offers allowances at all, and on what terms, is for them to say. Ask before you assume one is available.

Keep the units and file nothing. Sometimes the right call is to sell what you have and note the problem for the next order. That can be a sound business decision, especially when the time a claim would take is worth more than the value of the units. It should be a deliberate choice recorded on the receiving sheet, not a default because nobody got around to filing the claim.

If one delivery has both kinds of problems, you may make two requests. Keep each request on its own claim, or in clearly separated sections, so the return and the allowance do not get tangled. A supplier reviewing a single mixed claim may approve one part and reject the other without saying why.

Write down which of the three you picked and why, in one sentence. A manager reading the claim later should not have to guess whether the shop meant to return, adjust, or let it go.

5. Write the claim with all three counts in it

Put the claim on paper with every number in it. That means the unit cost from step 1, the received count from step 2, the usable and unusable counts from step 3, and the remedy from step 4. A claim that says "we got short and some were damaged, please credit us" makes the supplier do the work of figuring out what you mean. A claim that names the invoice, the line, the count, the reason, and the requested remedy can be checked in one reading.

Use a plain layout. Give one line to each fact, in the order a reviewer would look for it: the invoice reference and date, the item name as it appears on the invoice, the unit cost as billed, the quantity ordered, the quantity received, the quantity usable, the quantity not usable and why, the remedy requested, and the total amount requested. Put the arithmetic in the claim itself, so the supplier can follow the total without a phone call. If a reviewer has to ask what a number means, the claim was not finished.

Attach the evidence. The receiving sheet, the photos, and a copy of the invoice are the items a supplier reviewer is most likely to ask for. If the driver signed a delivery note, attach that as well. Do not attach internal notes about whose fault the problem was, or guesses about the cause. Stick to what was counted and what was seen.

Keep the wording factual. Use words like "received," "counted," "observed," and "requested." Words like "obviously" or "as usual" make a reviewer defensive and add no information.

Send the claim to the contact the supplier names for returns or credits, not to a general sales address, and keep a copy with the date you sent it. When you have a reference number, write it on the receiving sheet next to the line it concerns. The file then connects the delivery, the count, and the claim without anyone reconstructing the story from memory.

6. Hold the claim for a manager check, then track it

Before the claim goes out, a manager who was not on the receiving table should read it against the sheet. This is the second half of the process, and it is where the split between staff and managers pays off. The counter knows what came off the truck. The approver knows what the supplier has accepted before and what the shop has agreed to. The approver's job is to compare the claim to the sheet, not to recount the cartons from memory.

The manager's check can be short. Confirm that the unit cost matches the invoice line. Confirm that the usable and unusable counts add up to the received count. Confirm that the remedy fits the reason written on the sheet. Confirm that the photos and the sheet are attached and that the dates line up. If any of those fail, send the claim back to the counter with a specific question, not a general complaint.

Set a rule for which claims need a manager and which the counter can file alone, and write it down. The right threshold depends on your shop, your margins, and how much time a claim takes. Pick one that fits your business. What matters is that the rule is written, so the counter does not have to guess and the manager does not have to review every small item.

Track each claim in one place until it closes. A simple log with the invoice, the claim date, the reference number, the amount requested, the amount received, and a status column is enough for a small shop. Review the open items once a week. An open claim that nobody looks at tends to drift into a write-off without anyone deciding that it should.

When the supplier disputes the count, do not argue from memory. Go back to the receiving sheet and the photos. If the disputed units are still on hand and the supplier agrees to a recount, count them again and write down the new result with the date. If they are gone, the sheet and the photos are what you have. That is one more reason to write the count down at the time it happens. Before changing your stock records, review the inventory adjustment checks.

Start with a delivery today

Take a recent delivery's invoice and receiving sheet, and ask another person to check whether the recorded counts support the requested remedy.

Questions about supplier refunds

Should damaged stock be recorded as a shortage?

Record damaged units separately from missing units. A damaged unit may have arrived even though you cannot sell it.

Can you keep damaged units and request money back?

You can ask for an allowance if you keep the units. The supplier decides whether it offers one and on what terms.