How to Handle Receiving Discrepancies and Supplier Claims
Receiving discrepancies need evidence before putaway. This workflow separates shortage, damage and wrong-item issues and closes inventory cleanly.
Direct answer: A receiving discrepancy should be quarantined, counted, photographed and reported against the purchase order before the inventory becomes available. The claim should identify whether the problem occurred at the supplier, in transit or during receiving—and include enough timestamped evidence for the responsible party to evaluate it.
Separate the four discrepancy types
“The shipment was wrong” is not actionable. Receiving teams should classify the issue while the freight and packaging are still available:
- Shortage: fewer units received than the approved expected quantity.
- Overage: more units received than expected.
- Wrong item: the physical product, variant, barcode or lot does not match the purchase order.
- Damage or condition failure: crushed, wet, opened, expired, leaking, contaminated or otherwise unsellable inventory.
A fifth category—unidentified inventory—is useful when the units may be legitimate but the purchase order, SKU or owner cannot be established. Do not quietly assign those units to the closest-looking SKU.
Preserve the evidence before putaway
The receiving station should capture the evidence in a fixed order. Photograph the unopened pallet or carton, including all sides, seals and carrier labels. Record the arrival time, purchase order, appointment, carrier and trailer or tracking reference. Then open the shipment, count by SKU, lot and condition, and photograph the internal packing and affected units.
When weight is relevant, retain the carrier or dock weight and the receiving scale reading. When seals are used, record the seal number before and after opening. Keep damaged packaging until the merchant or carrier confirms it can be discarded. Moving goods into active pick locations before evidence is complete weakens both inventory control and a later claim.
Hypothetical example
A purchase order expects 24 master cartons of a cosmetic SKU, with 12 units per carton: 288 units. The carrier delivers 24 cartons. One carton is visibly crushed, and the receiving count finds:
- 22 intact cartons × 12 units = 264 sellable units;
- one intact carton containing 10 units = 10 sellable units;
- one crushed carton containing 12 units, of which 7 are sellable and 5 are damaged.
Total physical units are 286. Sellable inventory is 281, damaged inventory is 5, and the shipment is short 2 units versus the purchase order. Those are two distinct discrepancies: a two-unit shortage and five damaged units.
The receiving record should post 281 units to available stock, 5 units to a blocked damage location and 2 units to shortage variance. It should not post 286 available and rely on a later adjustment. If the merchant wants damaged units returned, the warehouse needs a disposition instruction before moving them.
Claim packet checklist
| Evidence | Why it matters |
|---|---|
| Purchase order and advance shipment notice | Defines expected SKU, quantity and pack configuration |
| Bill of lading or parcel tracking | Identifies carrier custody and shipment reference |
| Arrival photos | Shows external condition before opening |
| Count sheet by carton/SKU/lot | Explains the quantity variance |
| Damage photos and scale records | Documents condition and weight where relevant |
| Exception timestamps | Shows when the issue was discovered and reported |
| Disposition decision | Controls return, rework, disposal or release |
Assign responsibility without guessing
A crushed outer carton with a carrier damage notation may support a transportation claim. A sealed, undamaged master carton containing ten units when the supplier pack says twelve points toward a supplier shortage. But the receiving team should record facts, not make an unsupported liability conclusion. The merchant, supplier, carrier and insurer may apply different notice periods and evidence requirements.
Establish a responsibility matrix before the next discrepancy. The warehouse owns timely count and evidence. The merchant owns commercial approval and supplier communication unless the contract says otherwise. The customs broker owns neither supplier quality nor carrier damage, but may need corrected quantities for imported goods. The carrier receives a claim only when the shipping terms and evidence support one.
Use status locations, not spreadsheet notes
Quarantined stock should exist in the WMS as a non-allocatable location or status. Useful statuses include “damage review,” “unknown SKU,” “quantity investigation” and “awaiting disposition.” Every status needs an owner and review date. A free-text note on an available location will not stop the units from being picked.
Receiving discrepancy workflow
- Pause receiving for the affected container or SKU.
- Capture external condition and shipping references.
- Count by sellable, damaged, unidentified and missing quantity.
- Post only verified sellable units to available inventory.
- Move exceptions to blocked WMS statuses.
- Notify the merchant within the agreed SLA with the evidence packet.
- Open the supplier or carrier claim with the correct party.
- Record disposition and financial resolution separately.
- Close only after inventory and the claim log agree.
This process extends the controls in a 3PL inbound shipment checklist and should feed recurring issues into a cycle-count program. 247 Fulfillment can help turn supplier expectations, evidence standards and WMS statuses into one inventory management playbook.
