Barcode Offset Expense Charges in 2024

For over twenty-six years, we have administered barcode certification and compliance programs for major US retailers. The retail industry has dramatically changed in recent years, and the focus on supply chain efficiency has never been greater. Many suppliers view barcode compliance charges as a “profit center” for retailers, but as an unbiased testing center, we can attest that the infractions we are processing are very much valid. The retailers that utilize our compliance administration services empower us to support compliance offsets and protect their suppliers’ interests against inaccurate barcode reporting.

Since we launched our first retail compliance program for Sears, we have routinely heard the same comment from suppliers, “This is the ONLY retailer that’s charging me back for barcode labels”. The reality is that retailers operate in similar but very different supply chain environments.

For example, JCPenney utilizes automated sortation scanners in their distribution centers that move cartons at over 550 feet per minute. In this environment, it is crucial that GS1-128 labels adhere to their minimum requirements. Similarly, the scanners/imagers at the Home Depot RDC facilities are reading both item and carton GTINs at extremely high speeds.

So far in 2024, our testing division, Identification Labs, has evaluated hundreds of supplier GS1-128 shipping labels for retailers outside our existing partnerships. The primary reason is that these retailers are assessing compliance fees but do not provide the necessary ISO/ANSI certification and assistance to enable their suppliers to comply. Below are a few retailers whose supplier-provided GS1-128 we have been asked to evaluate.

GS1-128 Shipping Label Best Practices

• Routinely review your trading partners’ requirements. Convey this information to key personnel at your company. For example, JCPenney suppliers are encouraged to visit their web portal weekly.

• Do not assume your company is in compliance. Confirm your company’s compliance by certifying your GS1-128 shipping labels. New personnel and system changes require updated certification for each retailer whose business you value.  A $75 testing/certification fee can prevent unnecessary compliance offsets. We consistently see an increase in label defects from previously certified suppliers who made changes to their label material.

• Emphasize the importance of GS1-128 Shipping Label Placement to all personnel responsible for handling cartons. Placement requirements vary among retailers so education is key. Over 21% of all label offsets in the last quarter involved incorrectly placed GS1-128 labels.

• Perform routine maintenance on printing equipment and confirm supplies are adequate for your application. If your company is having issues with print quality, changing your print heads may solve the problem. We also recommend you always have spare print heads in-house at all times. Print quality infractions account for the largest percentage of GS1-128 issues and can be eliminated by proactive quality control that ensures consistent label compliance.

For the retailers that we partner with, we’re able to promote and guide suppliers to certification immediately after any shipping label-related compliance issues. In some cases, re-certification is simply built into the compliance process – if a label fails in the supply chain that means you automatically need to certify a corrected sample.

Bar Code Graphics is a leader in barcode print quality and is the largest North American barcode testing center for POS and shipping labels. Please feel free to call us at 800.662.0701 or email us at support@barcode-us.com.  Information on our in-house barcode testing group can be viewed at www.identificationlabs.com.