Code 55: New Location Allowance (OL or SA)

Overview

Code 55 deductions occur when Walmart determines that a new location allowance listed in the supplier agreement is missing from the invoice. The allowance is defined by how it appears on the purchase order and the supplier agreement, with different rules applying for off-item level (SA) and off-summary level (OL) allowances.

Types of New Location Allowances

Off Item Level of Purchase Order (Defined as SA on Supplier Agreement):

• Warehouse Merchandise: Covers the initial stocking of a new warehouse.
• Store Level Merchandise: Applies only to orders placed before the grand opening date of a new store, including merchandise pulled from a warehouse before the opening date. These allowances are typically between 5% and 10%.

Off Summary Level of Purchase Order (Defined as OL on Supplier Agreement):

• Designed to collect a percentage from every order total, not only merchandise intended for new stores.
• Typically ranges between 0.1% and 0.5% or 1% and 5%, depending on supplier volume.

Many invalid Code 55 deductions occur because the allowance was applied correctly but recorded in a different invoice location than expected.

Common Root Causes

A common cause of invalid Code 55 deductions is when the supplier agreement requires the allowance to be applied off-invoice, but the EDI provider applies it at the line-item level instead. Although the correct dollar amount is withheld, Walmart may interpret the allowance as missing.

• Purchase orders containing incorrect allowance or location information.
• Allowances listed on the purchase order but missing from the invoice.
• Shipping against an inaccurate purchase order, which may be considered acceptance of the PO details.
• Using incorrect EDI allowance codes.
• Calculating allowances using the net invoice amount instead of the gross amount.

How to Prevent Valid Code 55 Deductions

• Verify all purchase orders are accurate before shipping products.
• Ensure invoices match purchase order details exactly, including new location allowances.
• Confirm with your EDI team or provider that supplier agreement and purchase order allowances are correctly included on EDI 810 invoices.
• Double-check that allowances specified in the supplier agreement appear on both purchase orders and invoices.
• Maintain clear documentation for special deals and ensure buyer acknowledgment.

Can It Be Disputed?

Yes. Walmart allows disputes for invalid Code 55 deductions through the Accounts Payable Dispute Portal (APDP) if the supplier can prove that the allowance was already applied on the invoice. If the allowance was not applied, suppliers generally need to work with their buyer for assistance with recovery.

While APDP accepts Code 55 disputes, these cases can be difficult to win. When the correct allowance amount was withheld but applied in the wrong location, providing proof of the deduction to the buyer can often help overturn the charge.

How to Dispute Invalid Code 55 Deductions

New location allowance disputes can technically be submitted through APDP. However, Walmart has indicated that allowance deduction codes 50–59, 150, and 151 are unlikely to be approved through APDP.

The alternative approach is to work directly with your buyer. Disputes should include supporting documentation, and buyer approval is typically required before the deduction can be reversed.

Supporting Documentation

• Supplier agreement showing the approved new location allowance type (OL or SA).
• Purchase Order showing the expected allowance placement and amount.
• EDI 810 invoice demonstrating that the allowance was applied.
• Documentation confirming new store openings, warehouse stocking, or special location agreements.
• Buyer-approved documentation for special allowance arrangements.

Conclusion

Code 55 deductions typically occur because of differences between supplier agreements, purchase order allowance settings, and invoice data. Understanding OL and SA allowance structures, validating EDI configurations, and maintaining accurate documentation can help prevent these deductions. When an allowance was already applied correctly, supplier records and buyer communication provide the strongest opportunity for recovering invalid deductions.