SW: Swell Allowance

Overview

The SW (Swell Allowance) is a supplier allowance that applies exclusively to fresh goods. It functions the same as the DM (Defective Goods Allowance) and helps offset the costs associated with handling defective fresh merchandise.

The Swell Allowance applies only to fresh goods and follows the same principles as the Defective Goods Allowance.

How the Allowance Is Applied

• The allowance applies only to fresh goods.
• A percentage is applied to the total amount of all purchase orders generated.
• The allowance is negotiated to help offset the costs of handling defective goods.
• The negotiated percentage should be sufficient to cover defective goods markdowns.
• If the allowance does not adequately cover these costs, additional claims may be filed.

Conclusion

The SW Swell Allowance is a purchase order-level allowance for fresh goods that helps cover the costs associated with defective merchandise. Suppliers should review their negotiated agreements to ensure the allowance adequately covers expected markdowns and related claims.