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Retail Value Chain 101: How to Pack Cartons Properly to Avoid Chargebacks

Posted By Administration, Thursday, April 12, 2018
Updated: Thursday, April 12, 2018


by RVCF


We constantly hear from retailers that cartons aren't being packed and marked in accordance with the purchase order. This is confirmed by the fact that more than 40 percent of retailers are sharing deduction types for which poor packing practices are the sole culprit. Shortages, overshipment, unordered merchandise, carton contents not matching the ASN, unauthorized substitutions and other problems slow down the flow of goods and increase labor costs for retailers that have to research and correct inaccurate orders.

There's more to the packing process than tossing items into a carton, which should never happen. This process requires significant planning, protection and care so cartons are ready not only for transit, but also the sales floor. Here are five basic guidelines to follow during the packing process:

  1. Use the right size cartons for the merchandise. This is the best way to prevent carton contents from damage or shifting while in transit. It can also prevent garments from wrinkling.
  2. Use the proper amount of packing materials. Use as much as you need to prevent damage and shifting – no more, no less – while adhering to retailer requirements. Keep in mind that packing materials become trash when cartons are unpacked, so use recyclable, environmentally friendly products whenever possible.
  3. If you're packing garments, cover them when necessary. A clear, dry cleaning-style polybag will prevent wrinkling and soiling. Many retailers allow the use of a master polybag rather than individual bags. This allows you to pack several units of the same SKU or style in one bag and reduce waste. However, some fabrications and dyes aren't candidates for this and must be individually polybagged to prevent damage.
  4. Alternate the top and bottom placement of garments. You can reduce bulk and prevent shifting if you alternate approximately every six units, placing "like" garments head to toe for best results. You might need to use a bridge to reduce pressure on garments placed in the bottom half of the carton. A bridge is a piece of cardboard folded down on both sides that fits snugly against the sides of the carton. A bridge should only be used with the retailer's permission when there are a high number of units shipping within a carton.
  5. Pack shoes consistently and neatly. All shoes should face the same direction with the label end facing the top of the carton.

Looking at deductions involving packing and marking, the RVCF Deduction Policy Review Study tells us that retailers place great emphasis on the use of GS1-128 labels, which are critical to the receiving process. Use high-quality GS1-128 labels and make sure you have a verification process in place for testing label quality on a regular basis. Once you have a high-quality label, proper label placement is essential, so train your packing teams accordingly. Consider using templates or ordering cartons with U-shaped label placement indicators to reduce the risk of errors.

Of course, packing cartons in an acceptable carton with regards to structure and size is also important. Cartons that aren't strong and durable might not make it through transit intact, and cartons that are too big or too small might not be conveyable.

Ultimately, cartons need to be packed exactly as they've been ordered. Packers are often compensated based on the volume they ship. The more they get out the door, the more they get paid. They often end up trying to fill multiple cartons at the same time, which might increase speed but also causes shipping errors. These errors delay the receiving process and add costs for the retailer, who charges those costs back to the supplier. Packers must take great care to avoid mixing up cartons and scanning items incorrectly.

Simply following the scan-and-pack method will eliminate the majority of these issues. Scan a unit. Put it directly into the carton. Repeat until the carton is full. When the carton is full, tape it shut immediately. Implement this procedure and observe packers to verify the procedure is being followed.

When a retailer submits a purchase order to the supplier, their expectation is for the order to be filled on-time, completely, damage-free, and accurately. This is the formula for the Perfect Order Index (POI). Generally, achieving 95 percent compliance, or a solid A, in all four categories would be considered a job well done for suppliers. However, according to the POI formula, 95 percent compliance in all four categories only achieves a B-minus (81.4 percent) on the overall POI performance grading scale.

Suppliers can go a long way to improving overall performance by buttoning up packing and marking processes. This is a correctable issue. Training, attention to detail, and ongoing evaluation of tasks involved in packing and marking will result in better outcomes for the supplier, the retailer and the customer while strengthening the trading partner relationship.


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Tags:  Chargeback  Packing  Shipment Integrity 

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