Comparisons
Prepaid (Vendor-Arranged) vs. Collect (Retailer-Managed) Freight Deductions
How your shipping terms dictate deduction risk, legal liability, and dispute victory rates across Walmart, Target, and Kroger.
By DhaReclaim Operations Team · Published November 9, 2026 · Updated November 9, 2026
Shipping Terms & Deduction Vulnerability
The commercial agreement between a supplier and a major retailer specifies whether freight is moved under Prepaid terms or Collect terms:
- Prepaid (PPD): The vendor hires and pays the freight carrier to deliver goods directly to the retailer's DC dock.
- Collect (CPU / FOB Origin): The retailer arranges transportation, assigning their contracted carrier to pick up goods at the vendor’s warehouse dock.
Liability Differences for Deduction Disputes
| Deduction Type | Prepaid (Vendor Carrier) | Collect (Retailer Carrier) |
|---|---|---|
| Transit Damage | Vendor liable unless carrier signed clear POD | Retailer liable once carrier signs dock BOL |
| Late Delivery (OTIF) | Vendor liable for missed DC delivery window | Vendor exempt if carrier picked up late |
| Shortage Claims | Requires clean stamped POD with piece count | Clean shipper BOL signed by carrier driver wins |
Understanding your shipping terms is the single most critical factor in winning retailer logistics disputes.
Deduction codes in this article
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