In one sentence
A channel chargeback reimburses a distributor that sells to an approved end customer at a supplier-authorized price below the distributor’s normal acquisition cost.
What it is
A channel chargeback reimburses a distributor that sells to an approved end customer at a supplier-authorized price below the distributor’s normal acquisition cost.
Who uses it
Manufacturers, distributors, pricing teams, channel operations, claims teams, and finance.
How the calculation works
For each verified resale line, the eligible quantity is multiplied by the allowed difference between distributor cost and authorized resale price.
Financial execution
The distributor submits claim lines, exceptions are reviewed, approved lines become a credit memo or settlement, and rejected lines retain reason codes.
Accounting impact
Approved chargebacks usually reduce supplier revenue and create a liability or customer credit.
Example
A distributor bought 100 units at $80 and sold them under authorization at $65. The valid chargeback is $1,500.
Required inputs
- Distributor acquisition cost
- Authorized end-customer price
- Resale invoice or POS line
- Customer, product, quantity, and authorization window
Common rules
- Eligible customer and product
- Authorization effective dates
- Claim amount per unit
- Quantity limits, duplicates, returns, and contract exclusions
Common exceptions
- Unknown end customer
- Price outside authorization
- Duplicate invoice lines
- Excess quantity
- Returns
- Missing source invoice
How LicenseIQ supports it
- Matches claim lines to pricing authorizations and contracts
- Validates customer, product, date, price, and quantity
- Calculates line-level approved amounts
- Produces settlement and rejection evidence
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