Distributor Claim Rejections: How to Document Expiry Returns Companies Actually Accept

You shipped back 47 cartons of expired biscuits to the company. That was three months ago. The credit note? Still "under review."

Meanwhile, that ₹1.8 lakhs is stuck in limbo. Not your money, not theirs. Just gone from your working capital while some junior claims processor in Mumbai decides if your documentation meets their requirements.

This isn't unique. FMCG distributors across India lose 15-25% of legitimate expiry claims to rejections. Not because the products weren't expired. Because the paperwork wasn't perfect.

Why Companies Reject Legitimate Claims

Let's be clear: companies don't want to reject your claims. Processing rejections costs them time and goodwill. But their claims departments are drowning in volume and have strict criteria.

Common rejection reasons:

80%+ of rejections are preventable with proper documentation. The remaining 20% are policy issues that require negotiation, not paperwork.

The Documentation That Actually Gets Approved

Every company has slightly different requirements. But the core elements are universal:

1. Original Invoice Copy

Not a photocopy of a photocopy. Not a screenshot. The original invoice or a clearly legible certified copy.

What companies verify:

• Invoice number matches their records
• Products listed match claim quantities
• Dates are within policy window
• Your business details match their records

Common mistake: Sending invoice for Product A when claiming return for Product B (same brand, different SKU).

2. Batch Number Documentation

This is where most claims fail.

Required information per batch:

• Exact batch number as printed on product
• Manufacturing date
• Expiry date
• Quantity per batch
• Condition (expired, damaged, short-dated)

Common mistake: Writing "Batch: 2024" when the actual batch code is "L24A3847."

Why it matters: Companies reconcile returns against manufacturing records. If your batch number doesn't match their database, the claim gets flagged for investigation. Investigation means delay. Delay often means rejection.

3. Photographic Evidence

Photos aren't optional anymore. Most companies require:

Mandatory shots:

• Product with visible batch number and expiry date
• Full carton/case showing quantity
• Close-up of damage (if damaged claim)
• Timestamp visible (phone cameras do this automatically)

Photo quality requirements:

• Clear, focused, well-lit
• Batch number readable in photo
• No filters or editing
• Original files (not screenshots of photos)

Best practice: Create a simple photo station with good lighting. Consistent photos process faster.

4. Claim Form (Company-Specific)

Most companies have standardized claim forms. Using them correctly:

Do:

• Fill every field (even if "N/A")
• Use exact product names from their catalog
• Match quantities to supporting documents
• Sign and date where required

Don't:

• Leave fields blank
• Use your internal product codes
• Round quantities
• Submit unsigned forms

5. Goods Return Note / Delivery Proof

When you physically return goods, document the handover:

Include:

• Date and time of return
• Name and signature of receiving person
• Vehicle/transport details
• Quantity handed over
• Condition at handover

Why: Without return proof, companies can claim goods were never received. Your word against their records.

The Timeline Trap

Every company has claim windows. Miss them, and even perfect documentation won't help.

Typical policy windows:

Critical: The window starts from different points for different claims:

• Expired: From expiry date
• Damaged on receipt: From delivery date
• Transit damage: From delivery date
• Quality issues: From discovery date

Know your suppliers' specific policies. Don't assume.

Building a Claim-Ready Inventory System

The best time to document for claims is when goods arrive, not when they expire.

At Goods Receipt

Record immediately:

• Invoice details
• Batch numbers for each SKU
• Manufacturing and expiry dates
• Quantity received
• Condition on arrival

Photograph:

• Any visible damage
• Short-coded products (less than 60% shelf life)
• Discrepancies from invoice

Flag for attention:

• Products expiring within your sales cycle
• Damaged items (claim immediately)
• Quantity mismatches

During Storage

Track:

• Location in warehouse
• Batch-wise quantities
• FEFO compliance
• Any condition changes

Alert triggers:

• 60 days to expiry: Review sales velocity
• 30 days to expiry: Initiate return process if unsellable
• 15 days to expiry: Final return window

At Claim Initiation

Compile:

• Original purchase invoice
• Batch-wise inventory records
• Photographic evidence
• Completed claim form
• Any prior communication about the products

Submit:

• Within policy window
• Through correct channel (portal/email/physical)
• With tracking/acknowledgment

Company-Specific Strategies

Different companies have different cultures around claims:

Large MNCs (HUL, P&G, Nestle, etc.)

Characteristics:

• Strict documentation requirements
• Portal-based claim submission
• Automated initial screening
• Longer processing times
• Higher approval rates for compliant claims

Strategy:

• Follow their process exactly
• Use their terminology and codes
• Don't call to "follow up" - it doesn't help
• Submit perfect documentation the first time

Indian FMCG (Britannia, Parle, ITC, etc.)

Characteristics:

• Mix of digital and manual processes
• Relationship matters
• Regional variation in policies
• Faster processing, but less predictable

Strategy:

• Know your regional contact
• Maintain relationship through non-claim interactions
• Document everything (paper trails matter)
• Follow up systematically

Smaller Companies / Regional Brands

Characteristics:

• Often manual processes
• Policies may be negotiable
• Personal relationships critical
• Faster decisions, but less formal

Strategy:

• Build direct relationship with decision-maker
• Be reasonable in claims
• Accept partial credits to maintain relationship
• Document but keep communication open

The Claim Rejection Response Playbook

Your claim got rejected. Now what?

Step 1: Understand the Rejection

Read the rejection reason carefully. Categories:

Documentation issue: You can fix and resubmit

Timeline issue: Harder to overcome, but possible with good reason

Policy issue: Requires escalation, not resubmission

Quantity dispute: Requires evidence reconciliation

Step 2: Assess Resubmission Viability

Questions to answer:

• Can you address the stated reason?
• Do you have additional documentation?
• Is the amount worth the effort?
• What's your relationship health with this company?

Step 3: Prepare Resubmission

For documentation issues:

• Attach missing documents
• Reference original claim number
• Acknowledge the gap and explain
• Provide additional evidence if possible

For timeline issues:

• Explain circumstances causing delay
• Provide proof of discovery date vs claim date
• Ask for exception consideration
• Offer to split the difference

Step 4: Escalate If Needed

When initial resubmission fails:

• Request review by supervisor
• Contact your sales representative
• Escalate through company-specific channels
• Document all escalation attempts

Step 5: Accept or Write Off

At some point, cost of pursuing exceeds value recovered. Know your threshold.

Preventing Claim-Worthy Situations

The best claim is one you never have to make.

Ordering Discipline

Calculate actual need:

• Last 3 months average sales
• Seasonal adjustments
• Growth/decline trend
• Safety stock (minimal for short shelf life)

Avoid:

• Scheme-driven overordering
• "Round up" ordering
• Salesperson-pressured orders
• Optimistic demand assumptions

Inventory Rotation

Implement FEFO religiously:

• New stock goes behind old stock
• Check dates during put-away
• Regular rotation audits
• Train warehouse staff

Sales Push for Aging Stock

Before it expires:

• Identify slow-moving batches
• Create promotional bundles
• Offer to retailers as schemes
• Accept lower margin over zero margin

The Technology Advantage

Manual claim management is possible but painful.

Spreadsheet approach:

• Track claim status manually
• Set calendar reminders for windows
• Store documents in folders
• Time-consuming but workable

Inventory management system approach:

• Automatic expiry tracking
• Claim window alerts
• Document attachment to batches
• Status tracking dashboard
• Historical claim analytics

ROI calculation:

• Average claim value: ₹50,000
• Manual rejection rate: 25%
• System-assisted rejection rate: 8%
• Claims processed: 20/year
• Value recovered: ₹1,70,000 additional annually

A Hyderabad FMCG distributor tracked this precisely: "Before systematic tracking, we wrote off ₹8 lakhs in rejections annually. After implementing batch-level documentation, rejections dropped to ₹1.2 lakhs. Same products, same volumes, different documentation."

The Claim Review Checklist

Before submitting any claim, verify:

Documentation:

• [ ] Original invoice attached (legible copy)
• [ ] Batch numbers match products exactly
• [ ] Manufacturing dates documented
• [ ] Expiry dates documented
• [ ] Quantities match invoice and physical count
• [ ] Photos are clear, dated, show batch numbers
• [ ] Company claim form completed fully
• [ ] Goods return note prepared

Timeline:

• [ ] Claim window verified for this product type
• [ ] Submission within window
• [ ] Return logistics arranged within window

Submission:

• [ ] Correct submission channel used
• [ ] Acknowledgment received
• [ ] Tracking number/reference noted
• [ ] Follow-up date calendared

The Negotiation Reality

Even with perfect documentation, some claims require negotiation.

What's negotiable:

• Partial credit (50-75% of claim value)
• Product exchange instead of credit
• Extended timeline for future claims
• Adjusted policy terms going forward

What's usually non-negotiable:

• Policy minimums (₹10K claim threshold, etc.)
• Product categories excluded from returns
• Documentation requirements
• Fraud-flagged claims

Negotiation approach:

• Start with relationship, not complaint
• Present data, not emotion
• Offer alternatives ("Would product replacement work?")
• Know when to accept partial win

The Quarterly Claim Review

Every quarter, analyze your claims:

Metrics to track:

• Total claims submitted (value)
• Claims approved (value and %)
• Claims rejected (reasons breakdown)
• Average processing time
• Credit notes received vs expected

Patterns to identify:

• Which companies have highest rejection rates?
• Which product categories generate most claims?
• What documentation gaps keep recurring?
• Are rejections seasonal?

Actions from analysis:

• Adjust ordering for high-claim products
• Improve documentation for frequent rejection reasons
• Negotiate policy changes with problematic companies
• Write off consistently rejected categories from product mix

The Bottom Line

Claim rejections aren't random bad luck. They're systematic failures in documentation, timing, or process.

The distributors who recover 90%+ of their claim value aren't doing anything special. They're documenting at receipt, tracking batch numbers, submitting on time, and following up consistently.

Every rejected claim is money you earned and lost to paperwork. Fix the paperwork, keep the money.

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*ShelfLifePro tracks batch numbers from receipt to return, automates claim window alerts, and generates claim-ready documentation packages. Because your margins shouldn't disappear into rejected paperwork.*