KeHE Deductions: Reading Your Remittance Check Without Crying

Your KeHE check arrived, and it is lighter than the invoice promised. Not by a rounding error. The remittance that explains the gap reads like a foreign alphabet: an MCB line, two EP charges, a CS allowance, an SLF fine, a G credit you cannot place, and an 8% fee riding quietly on top of the promotions. Most brands respond one of two ways. They write the whole thing off as the cost of distribution, or they spend an afternoon contesting a single line, win or lose, and never look at the rest.

Before you do either, hold one number in mind. Brands scaling into national retail typically surrender 3% to 5% of gross revenue to retailer and distributor deductions. KeHE adds a wrinkle a direct retailer does not: it is a distributor, so on many lines you are charged twice, once for the promotion and again for the fee KeHE levies to process it. The disputable dollars are real, and most are never disputed, not because anyone judged them too small to chase but because reading a stack of coded remittances is nobody's full-time job. This is the decoder: what each KeHE code means, which ones you can recover, and how to file so the recovery actually lands.

How to read a KeHE remittance

Every meaningful deduction on a KeHE check carries an alphanumeric prefix at the front of its invoice number, and that prefix is the whole story. 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. Open it next to your remittance and the wall of codes becomes a list of decisions.

KeHE's vendor policy gives it wide latitude here. Any amount you owe KeHE can be set off against what KeHE owes you, with no stated cap on a single check. That is standard distributor language, and it is exactly why reading every line matters. Nothing forces the number to be small on your behalf.

You do not need to memorize the key. You need to recognize the five or six categories that hold almost all of the dollars, and know which one a line belongs to, because the category is what tells you whether it is worth disputing.

The codes that move the most money

MCB: Manufacturer Chargebacks

MCB is a discount KeHE extended to one of its retail customers and passed back to you. In practice it looks like KeHE offering a retailer 25% off or a buy-one-get-one on your product, then deducting that discount from your payment. Funding is aggregated by supplier and distribution center and charged back on a bi-weekly schedule.

Two things make MCBs the most important line on the page. First, they are often the largest single deductions. Second, KeHE charges a processing fee of 8% of the MCB amount, with a minimum of $65 per distribution center, on top of the discount itself (SupplierWiki). So a wrong MCB costs you twice: the discount you did not authorize, and the fee calculated from it.

Disputable? The unauthorized and duplicated ones, yes, and those are worth hunting. Double-funded promotions, where you also paid the retailer directly for the same deal, are a classic and expensive leak. An MCB meant to run one month that quietly reappears the next is another. When you recover the MCB, you recover its 8% fee with it.

EP: Extra Performance

EP covers the promotional activity a retailer requests and KeHE processes on your 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 runs more than a million of them a year. The fee is 8% of the retailer's invoice, 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. Compare every EP line against the promotion you actually agreed to.

SLF: Service-Level Fines

This is KeHE's version of OTIF. KeHE expects a 98% inbound fill rate; ship below it and you are charged 3% of the shorted product's value. A separate 92% on-time threshold governs delivery (SupplierWiki). Together they are the fines suppliers most often absorb without checking, because a fill-rate miss feels like your fault by default.

Disputable? More often than brands assume. If the shortfall traces to a KeHE receiving error, a purchase order you never got, or a quantity the warehouse logged wrong, the fine is contestable. If your 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 verify the rate rather than fight the line; rate creep past what your agreement specifies is recoverable. Shortages are the most winnable category there is if you hold a signed bill of lading and proof you shipped in full. Damage caused by KeHE's own handling, rather than yours, is worth a second look.

The fees hiding inside the deductions

Here is the KeHE-specific trap. 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 top: 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 you use the data. None of these is a discount to a retailer. They are the price of KeHE moving the paperwork.

New and small suppliers have one lever worth knowing about. 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 a single 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). If you qualify and did not opt in, that is a conversation to have with your supplier manager.

What this actually costs: a worked example

Numbers make it concrete. 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 a single quarter, roughly $1.25M in shipments generates about $55,000 in deductions and fees, right inside the 3% to 5% band once the processing fees are counted:

| Category | Amount | Disputable portion | |---|---|---| | MCB chargebacks | $18,000 | ~$5,000 (unauthorized / double-funded) | | MCB and EP processing fees (8%) | $4,500 | ~$800 (follows the bad promos) | | EP promotions (scans, demos, placement) | $12,000 | ~$2,500 (wrong window / product) | | Service-level fines | $6,000 | ~$3,500 (KeHE receiving / UDR error) | | Spoilage allowance | $9,000 | $0 (contractual, verify rate) | | Shortages / UDRs | $4,000 | ~$3,000 (shipped in full) | | CONNECT BI (2%) | $1,500 | $0 (contractual) | | Total | $55,000 | ~$14,800 clearly disputable |

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

The disputable vs. not-disputable rule

You do not have to weigh every line on its own. Use the shortcut:

MCBs, EP, shortages, and service-level fines: assume disputable until proven otherwise. This is where recoverable money lives, 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 yours (short shipments, bad item data): not a dispute. That is an upstream fix in product data and fulfillment, and fixing it stops the bleed for good.

How to actually file a KeHE dispute

Winning is as much about how you file as whether you are right. KeHE's process is specific:

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 you identify the line and open the dispute.
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). Miss the window and the money is gone regardless of merit.
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.
Reconcile the fee, not just the deduction. When you contest an MCB or EP line, confirm the 8% fee was calculated correctly too. The fee is only valid if the underlying charge is.

Always check KeHE CONNECT for the current forms and addresses. Distributor processes change, and a dispute filed the old way gets rejected before anyone reads it.

The real problem isn't the codes. It's the ones you never file.

Restate the math from the top. The loss is not the deductions you fight and lose. It is the disputable dollars that are never filed, because reading remittances at scale is slow, tedious work that competes with running the company. A brand can be right about $14,000 a quarter and recover nothing, simply because the disputes never got written before the 180 days ran out.

That is a parsing problem, not an accounting one. The detail already exists on the check. Someone, or something, has to read every prefix across every stub, categorize it, price it, check it against the agreement, and turn the disputable lines into filed disputes before the clock stops. KeHE gives you six months. The UNFI side of the business works the same way, on its own forms.

Find out what your KeHE checks are actually costing you

The free Deduction Scan reads twelve months of your remittances and sends back a written report: 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 it recovered after that, I work on contingency: no recovery, no fee.