Code 59

How to Fix Walmart Deduction Code 59: Defective Merchandise Allowance (DM)

Code 59, Defective Merchandise Allowance (DM), primarily arises when a defective merchandise allowance is stipulated in the supplier agreement but is not reflected on the invoice. A common scenario for invalid Code 59s is when the supplier agreement specifies an off-invoice allowance, but the EDI provider applies it off-line-item, leading to the co...

Root Causes of Code 59
  • •Code 59, Defective Merchandise Allowance (DM), primarily arises when a defective merchandise allowance is stipulated in the supplier agreement but is not reflected on the invoice
  • •A common scenario for invalid Code 59s is when the supplier agreement specifies an off-invoice allowance, but the EDI provider applies it off-line-item, leading to the correct dollar amount being withheld but from the wrong source
  • •Valid root causes include purchase orders containing incorrect information that is not corrected before shipment, allowances listed on the purchase order but missing from the invoice, implicit shipping confirmation due to shipping on an inaccurate purchase order, the use of incorrect EDI allowance codes, and allowance calculations being performed on the net invoice amount instead of the gross amount
Required Documents for Dispute
  • Supporting documentation
  • Buyer approval
Step-by-Step Dispute Process
  1. 11. Review the supplier agreement to confirm the terms of the defective merchandise allowance. 2. If the allowance was indeed given on the invoice, gather proof of this to dispute the deduction. 3. Allowance disputes can technically be submitted through the Accounts Payable Dispute Portal (APDP), but Walmart indicates that codes 50-59, 150, and 151 are unlikely to be approved via APDP. 4. The alternative and often more effective method is to attempt the dispute directly with your buyer. This requires initiating the dispute with comprehensive supporting documentation and securing approval from your buyer.
How to Prevent Code 59 in the Future
  • Review POs before shipping to catch discrepancies early
  • Maintain detailed records of all buyer communications
  • Implement automated PO validation
  • Keep dispute logs to identify recurring issues
Frequently Asked Questions

How long does it take Walmart to process a Code 59 dispute?

Walmart typically reviews Code 59 disputes within 30-45 days through the Accounts Payable Disputes Portal. If denied, escalate to your buyer immediately with supporting documentation.

Can I prevent Code 59 deductions before they happen?

Yes. Implement pre-shipment PO validation, maintain detailed records of buyer communications, and work with your EDI provider to ensure correct processing. Keep a dispute log to identify recurring issues.

What's the success rate for Code 59 disputes?

Code 59 disputes have varying success rates (40-70%) depending on documentation quality. Disputes succeed when you provide complete proof that the deduction was invalid.

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