Communicates billing adjustments between trading partners - including retail chargebacks, trade deductions, quantity discrepancies, price corrections, and return merchandise credits - with structured reason codes for dispute tracking.
The EDI 812 Credit/Debit Adjustment is a financial correction document sent between trading partners when the billed amount on an invoice needs to change. It flows in both directions: buyers send 812s to suppliers as chargebacks or deductions, and suppliers send 812s to buyers as credit memos or billing corrections. In retail supply chains, the 812 is the primary mechanism for the chargeback ecosystem - where non-compliance events like late shipments, short ships, incorrect labeling, or routing violations result in financial penalties assessed against the vendor.
An 812 references the original invoice (810) and PO (850), specifies the adjustment amount and direction (debit to supplier or credit to buyer), and must include one or more reason codes that explain why the adjustment is being made. These reason codes - such as AH (routing violation), AJ (late delivery), AB (short shipment) - are standardized by the buyer's vendor compliance program. Suppliers have a contractual window (typically 30–60 days) to dispute a deduction by sending a counter 812 or requesting backup documentation.
In grocery and CPG supply chains, the 812 is used extensively for promotional deductions - when a retailer takes an allowance for running an ad feature or display program. These "off-invoice" deductions often make up 2–8% of total invoice value for CPG brands, making automated 812 processing and dispute management critical for protecting gross margin.
Retail vendors receive 812s as chargebacks for compliance violations. A missing GS1-128 label, wrong pallet configuration, late delivery, or unauthorized substitution each has a corresponding deduction amount - often $250 to $2,500 per occurrence. Automated 812 intake lets suppliers track, dispute, and recover invalid chargebacks systematically rather than losing them in email threads.
CPG companies face high-volume promotional deductions via 812 from grocery chains. Trade promotion management (TPM) systems are fed by incoming 812 data - matching deductions to trade promotion events to determine which are legitimate vs. invalid. Unreconciled 812 deductions directly erode trade spend ROI.
Wholesale distributors send and receive 812s with both their supplier and customer sides. Inbound 812s from supplier credit memos need to flow into the distributor's cost-of-goods. Outbound 812 chargebacks to supplier for damaged goods received require clean audit trails and reason codes that align with the supplier's dispute process.
Manufacturers use 812s to issue credit memos for warranty returns, tooling cost adjustments, and material shortages. In automotive supply chains, the 812 handles production payment adjustments tied to actual build counts vs. scheduled releases - a critical reconciliation in kanban and JIT environments.
Opens the 812 transaction. BCD01 = adjustment date, BCD02 = credit/debit adjustment number (unique ID for this adjustment), BCD03 = the original invoice number being adjusted (maps to 810's BIG02), BCD04 = credit/debit flag: DB for debit (charges against supplier) or CR for credit (money back to supplier). BCD05 = originating PO number.
The heart of the 812 - specifies why the adjustment is being made. ACD01 = agency qualifier (usually ZZ for trading partner-specific), ACD02 = reason code. Common retail codes: AH (routing non-compliance), AJ (late delivery), AB (shortage), AD (damaged goods), GR (price discrepancy). ACD03 = free text description of the issue.
For item-level adjustments, each IT1 loop identifies the specific line being adjusted. IT102 = adjusted quantity, IT103 = unit of measure, IT104 = unit price of adjustment, IT105 = basis of unit price. Chargeback flat fees are often expressed as a single IT1 line with IT103 = EA and IT104 = the penalty amount. Retail 812s may have multiple IT1 lines for different violation types on the same shipment.
Links the 812 back to originating documents. REF01 qualifiers commonly used: IV (invoice number), PO (purchase order number), CN (carrier PRO/confirmation number), BM (bill of lading). Multiple REF segments allow a single 812 to reference multiple invoices or POs. Auditors rely on these references to trace the deduction back to the root transaction.
Summary segment containing the net adjustment amount in cents. Like the 810, TDS01 is an integer - $500.00 deduction = 50000. The sign is determined by the BCD04 credit/debit flag, not the TDS amount itself. TDS must balance against the sum of all IT1 line extensions; an imbalanced 812 will reject at many trading partner systems.
Carries dates relevant to the adjustment: DTM01 = 003 (invoice date of the original 810), DTM01 = 011 (shipped date from the 856), DTM01 = 050 (received date at DC). These dates are used to calculate whether a late-delivery chargeback is valid (was the carrier late, or was the DC's appointment unavailable?) and help suppliers build dispute cases.
The 812 always references an original 810 invoice. The adjustment may reduce the invoice balance to zero (full credit), reduce it partially, or add charges. Invoice number reconciliation between the 810 and 812 is how AR teams track open balances.
The 820 remittance often reflects 812 deductions already taken - showing the net paid against a gross invoice amount. Suppliers reconcile the 820 against open 812 transactions to determine which deductions were included in a given payment.
The originating PO is referenced in the 812 to establish context. PO terms, agreed prices, and compliance requirements in the 850 are the basis against which chargebacks are assessed - making accurate PO data foundational to any dispute process.
Better EDI handles 812 mapping, testing, and trading partner certification so you don't have to.
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