Chargebacks Top Bill at CFA/CLAD Seminar
The California Fashion Association (CFA) and the Coalition of Los Angeles Designers (CLAD) held the first of four business seminars created for CLAD members and others in the fashion industry on Nov. 8 at New Moon restaurant in downtown Los Angeles.The seminar, titled “Dealing With the Retailer—Handling Markdowns, Chargebacks, and Collections,” drew a small group of designers and executives from labels including Talking to Angels, Nikolaki, Eisbar, Ynnub, Kirano Jeans and Wrapper.
Lynn Sperling and Diane Hileman of San Marino, Calif.-based Sperling & Hileman Group, a retail consulting firm, covered the chargebacks section, explaining that one of the most prevalent types of chargebacks is non-compliance to the purchase order.
“Retailers are banking on the fact that you are going to do something wrong,” said Sperling. “One of the keys to working with chargebacks is to develop a strong relationship with your buyer.”
Another type of chargeback is the markdown allowance for slow-selling merchandise. One of the ways manufacturers can avoid these chargebacks is to request a selling report, Hileman said, adding that manufacturers can suggest replacing these items with alternate colors or sizes.
Many retailers post chargeback information online, noted David Ryan, senior executive officer for Applied Consulting Solutions, a Los Angeles-based consulting firm, and another speaker at the seminar. Ryan advised the group to check on chargebacks weekly rather than waiting for the retailer to contact the manufacturer—a process that typically takes 60 to 90 days, he said.
That was welcome news to Roger Tonin, chief financial officer for Los Angeles-based Wrapper. The industry veteran said at the start of the seminar that he was looking to learn at least one new tactic for dealing with chargebacks.
Other speakers included Robert Prather, president of A/R Management, a San Dimas, Calif.-based company specializing in accounts receivables, and James Benton, credit consultant with Allied National Inc., a Santa Monica, Calif.-based debt collection and credit analysis firm.
Ryan discussed software that will assist manufacturers in minimizing chargebacks. Prather advised the group to “identify chargebacks before they get old” and keep backup documentation. And Benton covered the procedure for collecting past-due payments.The next CFA/CLAD seminar will cover human resources issues including health insurance and labor law. For more information, call (323) 225-7800.
The speakers from the first seminar also plan to host similar seminars covering chargebacks, markdowns and collections for the Fashion Business Incubator and MAGIC International. For more information, contact Sperling & Hileman Group at (818) 788-5957. —Alison A. Nieder
