Purpose

To provide guidelines for customers using deduction as a form of payment.

Promotion Related Deductions

Johnsonville Sausage honors deductions taken as payment for trade performance within the following specifications:

• All documentation requirements submitted to Johnsonville will be subject to Johnsonville’s review in its reasonable satisfaction.
• The deduction is for payment of previously approved promotions.
• The customer meets all documentation requirements, including a valid customer invoice or “back-up” documentation, detailing the specific reason(s) for each deduction. “Back-up” is defined as a customer deal sheet signed by an authorized Johnsonville Sausage representative and proof of performance such as ad copy, billback/scanback data, etc. Examples will not be accepted.

Non-Promotional Pricing-Related Deductions

Deductions for pricing errors that are not related to trade promotions (ie, pickup allowance) will be honored within the following guideline:

• The customer meets all documentation requirements, including a valid customer invoice or “back up” documentation, detailing the specific reason(s) for each deduction.

Shipping-Related Deductions

Deductions for inventory, quality issues or shipping allowance-related claims will be honored if the customer meets the documentation requirements, which include the following:

• Customer invoice or “back-up” documentation detailing the specific reason(s) for each deduction.
• For shortages or damages, the customer must provide a written itemization of the product Stock Keeping Units (SKUs) and the quantity shipped short or damaged, on both:
  • The “back-up” documentation supporting the deduction.
  • The transportation documentation.
• Proof of validity to support the shipping-related claim, such as a signed bill of lading (BOL) or proof of delivery (POD).
• All discrepancies must be clearly noted on the BOL at the time of delivery, while the driver is still present.

IMPORTANT: International Chamber of Commerce (ICC) regulations require that shipping claims should be submitted to Johnsonville Sausage within six months of the original order shipment date, to allow adequate time for Johnsonville to investigate and file a claim against a carrier if necessary. If deductions resulting in carrier claims are taken more than six months after the order shipment date, they will be considered invalid by Johnsonville.

Compliance Policy

• Johnsonville will pursue repayment of deductions if a customer is unable to provide proper and valid supporting documentation as determined by our Sales or Customer Service teams.
• Once a deduction is deemed invalid by Sales or Customer Service, customers will be informed in writing that repayment of the deduction is due within 30 days of the date of the chargeback letter.
• All deductions that are coded as “unidentified” at 90 days outstanding are declared invalid and must be billed back to the customer immediately.

Johnsonville considers certain types of deductions invalid. These include, but are not limited to, the following:

• Anticipation (deductions related to compensation for invoices paid prior to due date).
• Trade deals on commodity product (ribs, loins, etc.).
• Promotional deals on dates other than previously agreed-upon promotional dates.
• Customer warehouse-related fees.
• A duplicate deduction. Example: Johnsonville gave off invoice allowance, and customer is deducting too.
• Nuisance fees (such as deduction processing fees, late trucks and detention charges not related to a CPU, bad pallet charges, etc.).
• Coupon-redemption charges (such as shipping, handling, foreign coupons, value shortage, expired coupons, variances in coupon count, process fees that exceed the clearing house authorized rate, etc.).
• Shipping claims involving transportation documentation that is more than nine months old. (These must be filed within six months of order shipment.)

PLEASE NOTE: Johnsonville’s deduction policy is designed to be fair to both our customers and Johnsonville. Failure to follow the policy may result in penalties, including but not limited to:

• Interrupted customer shipments, pending resolution.
• Decrease in current promotional funding.
• Decrease in future promotional funding.
• Price increase.
• Failure to comply with the policy could result in termination of the relationship.