Specialty Frozen Food Brand Wins $104,200 in Costco Return & Shortage Disputes

Executive Summary

• Client Profile: Frozen foods manufacturer ($38M retail revenue).
• Retailer Involved: Costco Wholesale US Depots.
• Deduction Categories: Merchandise Return Authorization (MRA) freight offsets & Depot receiving shortages.
• Dispute Amount: $112,400.
• Net Recovered: $104,200 (92.7% recovery).
• Resolution Timeline: 45 days.

The Challenge

Costco Wholesale operates through regional cross-dock consolidation depots. The supplier noticed substantial deductions on remittances classified as "Receiving Shortage" and "MRA Return Freight".

Upon investigating, the client discovered that when depot pallets were cross-docked onto trailers bound for individual Costco warehouses, warehouse receiving clerks attributed transit damage and local warehouse count errors as initial depot receiving shortages.

Investigation & Settlement

DhaReclaim conducted a forensic audit of Costco depot receiving documentation:

• Retrieved depot-stamped Bill of Lading receipts showing that pallets were received 100% intact and at verified temperature specifications at the primary depot.
• Demonstrated that damages occurred during Costco internal depot-to-warehouse transfers, relieving the vendor of liability under the standard Costco Vendor Agreement.
• Submitted formal documentation to the Costco Regional Accounting & Merchandising team.

Costco approved $104,200 in reimbursement credits across 14 depot shipments within 45 days.