CHAPTER 14 VENDOR RETURNS & EXPENSE OFFSET TABLE OF CONTENTS GENERAL OFFSET POLICY 14-2 DAMAGE ALLOWANCE 14-2 RETURN TO VENDOR 14-3 REPAIR AND RETURN 14-4 VENDOR CHARGEBACK POLICY 14-5 CHARGEBACK DISPUTES 14-6 VENDOR OFFSET SCHEDULE 14-7
GENERAL OFFSET POLICY The Company reserves the right to return, without notice, at the risk and expense of the vendor and/or carrier any shipment that does not conform to style, color, size, quantity, quality or completion dates as specified on our purchase order. The intension of the chargebacks is not to generate revenue but to ensure cost recovery and provide feedback that will support the goals and mutual success for all parties. The Company will only accept first quality merchandise. New merchandise may be returned, without notice, at the risk and expense of the vendor, all or in part for not meeting the quality guidelines. In addition, at the discretion of the buyers, shipment can be refused and returned to the vendor, at the vendor s expense, for the following reasons: Received after the IN DC/CANCEL date. Partial shipments; Unauthorized under/over shipment. Substitutions of fabric, color, size or style. Incorrect size or size breakdown. Incorrect color Shipped with fabric or manufacturing defect. Made in any way not according to the sample or up to the Company standards of quality. Fails Quality Assurance Audit. Incorrect woven main label placement. Incorrect care label instructions and location. Failure to sew the correct CARE, BRAND or SIZE label. If a group as specified on the Purchase Order is not shipped together. An incomplete range of sizes or colors; independently or as a result of a combination of the above factors DAMAGE ALLOWANCE A 1% damage allowance will be assessed on all Purchase Orders. This 1% allowance excludes any damages identified upon initial receipt, which will be a debit memo. If merchandise is returned to the vendor based upon a mutually agreed guarantee or recall, these returns will be handled by debit memo. 14-2
RETURN TO VENDOR If the Company elects to return merchandise to the vendor, vendor shall provide a Return Authorization number (RA number). If vendor fails or refuses to provide the Company with such RA number within 5 days of request, then vendor authorizes the Company to donate any or all of the merchandise to a charitable institution of the Company s choice, without payment to the vendor. The company will make available the merchandise to be picked up when RA number is issued. It is the responsibility of the vendor to pick up merchandise, at the Vendor s expense, within 5 days of being made available or the Company will donate any or all of the merchandise to a charitable institution of the Company s choice, without payment to the vendor. It is the vendor s responsibility to submit an invoice for all merchandise, including returned merchandise. The Return to Vendor process creates a debit memo that must be offset by the vendor s invoice. Failure to submit an invoice for returned merchandise will result in incorrect billing. All repair and return merchandise must be accompanied by a new invoice for payment. It is the vendor s responsibility to remove all Company identification, which includes but is not limited to; hang tags, price tickets, price labels and sewn in woven labels. Any visible and intact trademark of the Charlotte Russe or its affiliate s brands cannot be transferred to another entity to sell without written approval from the Company. back Policy for Returns s The Company s trademarks are valuable assets, and all employees and business partners should help protect them. Failure to remove all Company identification will result in a graded penalty (chargeback) for each infraction. Company identification includes but is not limited to: hang tags, price tickets, price labels, trims, stamps, and sewn in woven labels. Please see Expense Offset Schedule for infraction details STORE RETURNS AND RTVs If the merchandise has already been distributed out to stores and the company determines the product must be returned for Quality, Safety, Conformity to regulations or any other legal justification, in addition to above returns requirements, vendor is responsible for all Shipping and Handling charges associated with removing the product form the stores and shipping the merchandise to Charlotte Russe DC for return to vendor. 14-3
REPAIR and RETURN In some instances the Charlotte Russe Merchandising or Production teams will handle the merchandise that failed our audit by requesting that the vendor conduct a repair and return For a repair and return an RA number is required by the vendor. This allows the Charlotte Russe DC to prepare the goods for pickup by the vendor or a 3d party finisher for repair. The vendor is responsible to arrange for pick up of the merchandise from the Charlotte Russe DC and deliver to 3rd party for repair. Please note the merchandise is the responsibility of the vendor while at the 3rd party finisher. Once merchandise is repaired Charlotte Russe DC will accept ONLY the repaired merchandise back into the DC.. Any defective merchandise and its removal from the 3d party finisher is the responsibility of the vendor. Defective Merchandise is not to be returned to the Charlotte Russe DC. When merchandise is repaired it is the responsibility of the vendor to notify merchant of the new count and a new reference PO will be created for the revised quantity. The repaired merchandise will require a new PO number in order to be accepted back into the Charlotte Russe DC. When goods are returned to the DC under new reference PO the Merchant and/or Production team may implement the Charlotte Russe Late Shipment Policy. We reserve the right to make all decisions regarding shipment timelines for repair and return merchandise. Charlotte Russe pays the 3 rd party for the work involved and the vendor is deducted those fee s from a future invoice. The QA Dept. can help facilitate a third party resource if needed. To request assistance from the QA Dept. in this type of matter vendors can contact the QA Manager armando.reyes@charlotterusse.com If a repair and return is necessary Charlotte Russe currently recommends use of the below 3 rd party for domestic repairs: Santa Fe Finishing OLT 2460 E. 12th St. Unit C 11490 Wright Rd Los Angeles, CA 90021 Lynwood, CA 90262 Phone (213) 627-5858 Phone (626) 343-7703 Email: Morgan@santafefinishing.com Email: John.oltinc@gmail.com 14-4
VENDOR CHARGEBACK POLICY The Expense Offset Policy is intended to recover the expenses incurred by the company due to vendors that have not met the standards as outlined on the Purchase Order and in the Routing Guide. A. Buyer back At the discretion of the buyers, shipment can be refused and returned to the vendor, at the vendor s expense, for the following reasons: Failure to deliver by cancel by date (without approved extension). Unauthorized under/over shipment. Incorrect size or size breakdown. Incorrect color. If a group as specified on the Purchase Order is not shipped together. Shipping substitutions (Without buyers pre-approval). Fails Quality Assurance Audit. Incorrect woven main label placement. Incorrect care label instructions and location. Failure to sew in correct CARE, BRAND or SIZE label. Unsolicited Merchandise B. Fit/Sample Process back Please see Expense Offset Schedule for infraction details C. Distribution Center back At the discretion of the Distribution Center, shipment can be refused and returned to the vendor, at the vendor s expense, for, but not limited to, the following reasons; in addition the Buyer authorized chargebacks listed above: Purchase Order Non-Compliance Sample Process s Item Level Non-Compliance Packing Non-Compliance Shipping Non-Compliance Documentation Non Compliance Quality Assurance RTV Process Non-Compliance Other: not covered by Buyer or Distribution backs D. The chargeback will be assessed by PO, Carton or Unit: On problem units only; if problem units can be easily identified On all units; if the problem requires sorting through all units to identify the bad units and the extent of the problem. 14-5
E. Please see Expense Offset Schedule for infraction details, there will be a limit of the invoice total for that receipt. For example: If a Purchase Order has three styles and each style has a different delivery time, and a chargeback is incurred for one of the styles, the chargeback limit will be the invoice amount for that individual style. F. As stated throughout this Vendor Handbook and Vendor Instructions: Each vendor shall be liable for chargebacks, resulting from failure to comply with the instructions and requirements contained within this vendor handbook or with the Standard Terms as disclosed in Chapter 15 of this Vendor Handbook. G. back amounts will be deducted from the invoice. H. The company is not responsible for providing photographic documentation as proof of vendor noncompliance. CHARGEBACK DISPUTES Disputes on any or all vendor chargebacks must be initiated within 60 days of the receipt of the chargeback. Correspondence concerning chargebacks older than 60 days will not be researched or addressed. All disputes must be in writing and must be received within 60 days of the receipt of the chargeback. The vendor must clearly state the reason for dispute and list a contact name, telephone number and email address. Disputes can be submitted by emailing below contact: Email: vendorsupport@charlotterusse.com 14-6
VENDOR OFFSET SCHEDULE Purchase Order Non-Compliance A.1 Early Shipments from Start Date $100 PO Line $100 $100 A.2 Late Shipments from Cancel Date $100 PO Line $100 $100 A.3 Canceled or unordered Purchase order Refusal PO Line na na A.4 Partial PO or PO Line non-compliance Units Not Ordered Unauthorized Substitutions Incorrect color/size scale Over-Shipments Canceled or unordered merchandise Sample Process s B.1 Failure to return final approved fit sample as specified on specification sheet $50 B.2 Failure to complete specification form correctly: Failure to include spec sheet. Failure to complete spec in correct sequence. Do not start new sheet. Continue comments on original page. Incomplete information: Failure to indicate PO #, style #, description, cxl date, sketch, measurements, Other:. Other: B.3 Missing or incomplete T.O.P. Form Failure to include T.O.P. Form Incomplete information: Failure to indicate PO #, style #, description, cxl date, sketch, measurements, other: Other: B.4 Failure to return previous fit sample with new fit submit (When submitting a 2nd or 3rd fit, you must also return the previous fit). Return to Vendor and full Freight In & Out, plus 5% Handling fee or Disposal/Donati on at Charlotte Russe discretion Sample Submitt al $30 Sample Submitt al $30 Sample Submitt al Return to Vendor and full Freight In & Out, plus 5% Handling fee or Disposal/Donati on at Charlotte Russe discretion PO Line Sample Submitt al 5% of $50 $50 $30 $30 $30 $30 5% of B.5 Failure to provide or late T.O.P. sample $100 PO Line $100 $100 14-7
Item Level Non-Compliance C.1 Failure to apply correct ticket, missing ticket, ticket in wrong location, wrong bullet C.2 Incorrect woven or care label, label placement or incorrect label information C.3 Failure to remove vendor identification, label and /or tags, unless noted on PO C.4 Failure to ship hair, jewelry, accessories, etc. on appropriate cards unless noted on PO C.5 Failure to purchase hangers and place units on hangers when specified on PO C.6 Failure to place units on hangers or missing/damaged hangers when hangers were purchased/provided $50 Packing Non-Compliance D.1 Carton Compliance Errors Incorrect carton Dimensions Improperly Sealed Cartons More than one mixed SKU carton/inconsistent quantities Cartons over or under packed Cartons not of sufficient strength to avoid damage of carton or product during transit D.2 Carton Labeling errors UCC128 labels not utilized when specified Cartons Labeled with incomplete/incorrect information Multiple Labels on Carton "Mixed" Carton not Marked "ORM_D" Markings missing or not marked per compliance regulations D.3 Units not packed to ecommerce Specification D.4 Failure to pack using incorrect inner pack or pre-pack quantity D.5 Overweight cartons $5.00 CTN $5.00 CTN $0.50 Unit $10.00 CTN $10.00 Shipping Non-Compliance 14-8
E.1 For merchandise delivered without an ASN or a 24 hour advance appointment $150 PO Line $150 $150 E.2 For a delivery that has missed the appointment time by more than one (1) hour $300 Receipt $300 $300 E.3 Trailer/Container not loaded properly $5.00 Carton $50 E.4 EDI-856 ASN missing, incorrect or unusable when $150 $150 $150 PO Line appointment is requested E.5 Unauthorized split shipment $500 PO Line $500 $500 E.6 Late bookings to the required timeframe $50 PO Line $50 $50 E.7 Late handover to the PO handover date $50 PO Line $50 $50 Documentation Non-Compliance F.1 Incorrect, Incomplete or missing documents (packing slips, $250 PO Line $250 $250 BOLs, etc.) F.2 EDI-810 missing or incorrect $50 PO Line $50 $50 F.3 Incorrect, Incomplete or missing commercial/shipping documents $50 PO Line $50 $50 Quality Assurance G.1 For additional handling when order fails "Quality Audit Guidelines" subject to return $0.50 Unit $50 Other Non-Compliance I.1 Other: tbd tbd tbd tbd I.2 Other Buyer Authorized Fee tbd tbd tbd tbd 14-9