KeHE Deduction Codes: MCB, EP, Spoils, and Which You Can Dispute

A KeHE remittance explains every dollar it withholds, in a code at the front of each invoice number. MCB, EP, CS, SLF, G: each prefix names a category, and the category says whether the line can be disputed. The codes are not the obstacle. The obstacle is how many of them there are, and how little time anyone has to read them.

Brands scaling into national retail typically surrender 3% to 5% of gross revenue to retailer and distributor deductions. On $5M a year through KeHE, that is $150,000 to $250,000 leaving on the checks. KeHE adds a cost a direct retailer does not: as a distributor, it charges for many promotions twice, once for the discount and again for the fee it levies to process it.

The person who reads those lines is whoever does cash application at the brand. At month end they have the remittance on one screen and K-Solve on the other, trying to match an MCB line to a promotion that may have run two months earlier. Each line takes minutes. A quarter of checks holds hundreds of them, and the 180-day dispute window keeps running while the work waits behind invoicing and payroll. What follows is the decoder: what each code means, which ones are recoverable, and how to file so the recovery lands.

A KeHE remittance is read by its prefixes

Every meaningful deduction on a KeHE check carries an alphanumeric prefix at the front of its invoice number. MCB is a manufacturer chargeback. EP is extra performance. CS is a customer spoilage allowance. SLF is a service-level fine. S is slotting, N is scans, L is a recall, G is damages or spoils. KeHE publishes the full key, and the codes appear at the start of the invoice numbers in K-Solve, the deduction app inside KeHE CONNECT, under the Sales Orders tab. Opened next to the remittance, it turns a wall of codes into a list of decisions.

KeHE's vendor policies and procedures let it set any amount the brand owes KeHE against what KeHE owes the brand, with no stated cap on a single check. If the brand owes more than KeHE owes it and the balance stays open 60 days, KeHE invoices the brand for the difference. SupplierWiki's current guide carries the same set-off language. That is standard distributor language. It also means the size of a deduction is set by KeHE's records, and only a line-by-line read tests them.

The key does not need memorizing. Five or six categories hold almost all of the dollars, and the category decides whether a line is worth disputing.

Four categories carry most of the money

MCB: manufacturer chargebacks

MCB is a discount KeHE extended to one of its retail customers and passed back to the brand. In practice KeHE offers a retailer 25% off or a buy-one-get-one on the product, then deducts that discount from the brand's payment. Funding is aggregated by supplier and distribution center and charged back on a bi-weekly schedule.

MCBs are often the largest single deductions on the page, and KeHE adds a processing fee of 8% of the MCB amount, with a minimum of $65 per distribution center, on top of the discount itself (SupplierWiki). A wrong MCB therefore costs twice: the discount nobody authorized, and the fee calculated from it.

Disputable? The unauthorized and duplicated ones, yes. Double-funded promotions, where the brand also paid the retailer directly for the same deal, are a classic and expensive leak. So is an MCB meant to run one month that reappears the next. Recovering the MCB recovers its 8% fee with it.

EP: extra performance

EP covers the promotional activity a retailer requests and KeHE processes on the brand's behalf: scans, print and digital advertising, in-store demos, coupons, slotting, and placement (the deep discount, often 50% to 100% off the first case, that buys a spot on the shelf). KeHE describes itself as the processing agent for these and handles more than a million of them a year. The fee is 8% of the retailer's invoice, with a $35 minimum and a $700 maximum, assessed per invoice.

Disputable? When the charge does not match the deal: wrong product, wrong dates, a demo that never happened, a scan quantity that does not reconcile to movement. Each EP line gets checked against the promotion actually agreed.

SLF: service-level fines

This is KeHE's version of OTIF. KeHE's compliance program requires suppliers to hold an 85% on-time delivery rate over a calendar quarter to avoid extra fees (SupplierWiki). These are the fines a brand is most inclined to absorb, because a late or short delivery looks like the brand's fault by default.

Disputable? More often than that default suggests. If the shortfall traces to a KeHE receiving error, a purchase order that never arrived, or a quantity the warehouse logged wrong, the fine is contestable. If the fill genuinely came up short, the fix is upstream in demand planning, not a dispute.

Spoils and shortages

Spoilage shows up as a standing customer spoilage allowance (CS), and as damage or out-of-date credits (G, Q) for product deemed unsellable inside KeHE's network. Shortages surface through Unloading Discrepancy Reports, the UDRs the receiving team generates when a delivery arrives short, over, or damaged.

Disputable? The allowance is contractual, so the rate gets verified rather than fought; creep past the rate in the agreement is recoverable. Shortages are the most winnable category there is when the brand holds a signed bill of lading and proof it shipped in full. Damage caused by KeHE's own handling is worth a second look.

KeHE's processing fees ride on top of the deductions

Because KeHE is a distributor rather than a direct buyer, the promotional deductions are only half the cost. The other half is the administrative fees stacked on them: the 8% on MCBs, the 8% on EP, and a 2% allowance for CONNECT BI, KeHE's sales-reporting platform, which appears as an MA line whether or not the brand uses the data. None of these is a discount to a retailer.

New and small suppliers have one lever. In 2024 KeHE launched an opt-in Administrative Allowance Program, a flat 2% invoice allowance that folds lumper fees, new-item setup, MCB fees, EP fees, and DC intro allowances into one predictable line. It is open to suppliers in their first year and under $500,000 in supplier costs received, and KeHE estimates it can cut launch costs by roughly two-thirds (SupplierWiki). A brand that qualifies and still pays those fees line by line can ask its supplier manager to switch.

On $5M a year, about $14,800 a quarter is disputable

The figures below are illustrative, built to show the shape of the problem rather than any real brand's books, but the proportions are what tend to turn up.

Take a brand running $5M a year through KeHE. In one quarter, roughly $1.25M in shipments generates about $55,000 in deductions and fees, inside the 3% to 5% band once the processing fees are counted:

At a win rate of about 40% on disputed dollars, that is roughly $5,900 recovered in one quarter, or $24,000 a year. The spoilage allowance and the BI fee stay; they are deals the brand made. Everything above them is a decision, and because the 8% fee rides on every promotion, reversing a bad MCB pays back on two lines instead of one.

Four codes hold the recoverable money

Not every line needs weighing on its own:

• MCBs, EP, shortages, and service-level fines: assume disputable until proven otherwise. This is where recoverable money sits, and the processing fees make each recovery worth slightly more than it looks.
• Contractual allowances (spoilage, the BI fee, agreed promotional funding): usually not. Verify the rate, then move on.
• Compliance failures that are genuinely the brand's (short shipments, bad item data): not a dispute. That is an upstream fix in product data and fulfillment, and it stops the deduction for good.

The routines that keep those fields right are process hygiene. A field fixed once stops the deduction in every later quarter; a dispute recovers one quarter's worth.

How to file a KeHE dispute that lands

How a dispute is filed decides as much as whether it is right. KeHE's process is specific:

1. Work in K-Solve. The app lives under the Sales Orders tab in KeHE CONNECT and organizes the credits and debits on each check. It is where the line is identified and the dispute opened.
2. File within 180 days. KeHE accepts disputes by email at vendorperformance@kehe.com and in K-Solve for up to 180 days after the deduction is taken (SupplierWiki). After that the money is gone regardless of merit.
3. Attach the proof. Signed bills of lading, purchase orders, invoices, and the promotional agreement the deduction should match. For MCBs and EP, the agreement is the whole case: it shows the authorized product, discount, and dates.
4. Reconcile the fee, not just the deduction. When an MCB or EP line is contested, check that the 8% fee was calculated correctly too. The fee is only valid if the underlying charge is.

Forms and addresses change, so check KeHE CONNECT before filing. A dispute sent the old way is rejected before anyone reads it.

The unfiled lines cost more than the lost disputes

The loss that matters is not the disputes filed and lost. It is the disputable lines that are never filed, because reading remittances at scale is slow work that competes with running the company. In the example above, $14,800 a quarter is disputable, and a brand can be right about all of it and recover nothing if the disputes are not written before day 180.

That is a parsing problem, not an accounting one. The detail is already on the check. Every prefix on every stub has to be read, categorized, priced, checked against the agreement, and filed before the clock stops. The Deduction Scan is how I do that reading: a year of stubs, every line sorted by prefix and priced against the deal it should match. The UNFI side of the business works the same way, on its own forms.

Start with the MCB lines nearest their 180-day limit. They are often the largest, they carry the 8% fee, and their window closes first.

Find out what your KeHE checks are costing you

The Deduction Scan is free. It reports which deductions are disputable, which dispute windows are still open, and what the recoverable share is worth. Send me twelve months of remittances and I'll write back with what's recoverable and what it's worth. No call, no obligation.

If you want the money recovered after that, I work on contingency: no recovery, no fee.