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How to prevent Costco chargebacks

Every Costco deduction we track traces back to a preventable error — in the ASN, the label, the routing, or the invoice. This playbook aggregates the prevention steps from all 6 Costco codes in our database, grouped by the operational area that owns them.

ASN / EDI 856

  • Transmit the 856 before or as freight departs, never after
  • Generate the ASN from actual pick/pack scan data, not the PO
  • Monitor 997 acknowledgments so a rejected ASN is re-sent before arrival

Protects against: ASN-LATE

Accounts Payable / Invoicing

  • Three-way match PO (850), ASN (856) and invoice (810) before transmission
  • Invoice from confirmed shipped quantities at PO prices
  • Sync item identifiers with Costco's item file on every new item setup

Protects against: INVOICE-MATCH

Labeling

  • Generate SSCCs from your registered GS1 Company Prefix and validate before printing
  • Drive label generation and the 856 ASN from the same shipment data
  • Scan-test labels before the truck is loaded

Protects against: LABEL-GS1

On-Time Delivery

  • Book and hit depot delivery appointments exactly — not early, not late
  • Track shipments in transit and reschedule appointments at the first sign of delay
  • Build depot lead times into production and shipping plans

Protects against: LATE-DELIVERY

Packaging / Pallet

  • Build pallets to Costco's configuration spec with no overhang
  • Use stacking patterns and stretch wrap that keep loads stable in transit
  • Photo-document pallet condition at loading for dispute evidence

Protects against: PALLET

Accounts Payable / Shortage

  • Scan-verify picked quantities against the PO before loading
  • Correct the ASN and invoice whenever a shipment goes short
  • Never substitute items without written approval

Protects against: QTY

Already been charged? Dispute it.

Compliance documentation and routing guides live in the Supplier Portal. Because charges are case-by-case, disputes hinge on shipment evidence: ASN records, label validation, pallet photos, and signed delivery paperwork.

Full program details: Costco vendor compliance guide →

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Chargeback.ai is not affiliated with Costco. Verify current requirements in Costco Supplier Portal.