How Label Verification Helps Avoid Costly Fines and Chargebacks Due to Defective Labels

How Label Verification Helps Avoid Costly Fines and Chargebacks Due to Defective Labels

Printing of faulty barcode labels that are not scannable can have a devastating downstream effect on your business. The most common causes of unreadable barcodes include low contrast, quiet zone violations, improper reading position, print or mark inconsistency and damage/distortion. These issues are frequently the result of incorrect printer settings, printhead damage, or wrinkled ribbons. Any of these can make the barcode too dark or too light and/or produce voids on the label.

Readability of a barcode is defined by how well a barcode reader can decode the data in the symbol. While a code may look perfectly fine to the human eye, even simple inconsistences mean loss of readability.

A faulty barcode has a ripple effect on the entire supply chain. At a minimum, barcodes that can’t be scanned will need to be entered by the worker manually. This simple act brings with it the increased risk of data errors and costly mis-shipments or shipment delays – and customer frustration. This can result in slow/stop production and cost companies and their customers thousands of dollars in decreased throughput, manual rework and fines.


Real Costs of Faulty Barcodes

When a customer receives a shipment with unscannable/bad barcodes, customers can and do levy severe consequences on the supplier/shipper. They can include:

  • Costly Fines. Having the wrong/damaged barcode on a shipment can cost the shipper fines that can mount very quickly.For example, retailers like Walmart have detailed requirements for on barcode label design/placement. Non-compliance can cost the shipper $5,000 for the second infraction which can double with each infraction.1 Retailers invest heavily in technology to help optimize business efficiency using barcodes. If the supplier does not have the complete information in the barcode, retailer systems can come to a screeching halt.

    Certain industries such as automotive, pharmaceutical, and aerospace have compliance regulatory requirements around barcoding and levy fines for non-compliance. 

  • Chargebacks and Refused Shipments. Unscannable UCC-128 labels and misplaced labels are among the leading causes for chargebacks and refused shipments. Consequences like these can easily cost the supplier up to 10% of their revenue. Such fines are levied to help the retailer recoup their costs associated with re-labeling.For this reason, it is imperative that shippers put in place procedures and equipment that will verify barcode readability on products and shipments before they enter the supply chain. If the shipper can’t verify that the barcode was scannable when it left their facility, they are liable to pay the chargeback fees.
  • Manual Entry and Delayed Shipment Fees.For customers who do accept shipments with faulty barcodes, shippers can still be penalized with fees for manual barcode entry and/or late fees for delayed shipments.
  • Product Safety. Many industries such as pharmaceutical, medical devices, automotive, and food/beverage use barcodes for tracking and tracing. Barcodes are critical in these industries in cases where there are product recalls. Barcodes improve visibility into:
    • Product movement and inventory management to make sure the correct product was shipped to the correct warehouse and/or retailer at the correct time.
    • Food safety for consumers by tracking production and expiration dates.
    • Providing retailers with the ability to track the product from receiving it through to the sale.
  • Business Reputation. How many poor quality/unreadable barcodes will it take before it will affect the reputation of your company? Companies make decisions every day to stop doing business with shippers who repeatedly deliver product/shipments with bad and unscannable barcodes.

How Integrated Barcode Verification Ensures 100% Accuracy, Every Time

Today, technology is changing every aspect of the supply chain.  Honeywell has changed the landscape of barcode printing with the introduction of the Honeywell PX940 high-performance industrial printer with integrated label verification. 

Developed for companies that are subjected to fines levied for non-compliance to regulatory shipments due to unreadable barcodes, the PX940 series takes industrial printing to a new level of accuracy and simplicity. It provides customers with error-free precision printing, increasing production efficiency and reducing operational costs.

  • Defect-Free Labels, Every Time. Integrated label verification technology checks and ensures that labels print accurately every time; instantly notifies you of pass/fail status and ANSI grade. With pass/fail and ANSI grades from 1 to 4, bad labels that do not meet an established threshold are voided and a new label is reprinted. 
  • Measurable Cost Savings. Based on Honeywell internal testing, integrated label verification technology provides error-free printing, resulting in cost savings of up to $15,000 per printer. In addition, customers can realize a cost saving $6,000 per printer by not having to scrap bad and unreadable barcodes.
  • Barcodes 100% Compliant. Shippers have historical data to dispute chargebacks and can eliminate these hefty fines for non-compliant barcodes. Some companies are even now sending reports showing that all barcodes were 100% compliant when the shipment was prepared and sent out.
  • Precision Printing for Small Labels. Extremely precise printing of up to +/-0.3 mm (0.012 in) virtually eliminates poor-quality, unreadable labels and barcodes.
  • Intelligent Asset Management and Monitoring. Operational Intelligence software provides predictive analytics and data on printer health to help managers oversee their entire printer fleet and proactively prevent issues, ensuring maximum uptime.
  • No PC Required. Smart printing capability allows you to configure settings on the printer without the need for a host computer.
  • Simple and Intuitive to Use and Maintain. Easy to use and maintain, with a color multilingual touchscreen interface, quick side-loading design, and a built-in printhead cleaning routine that provides optimal print quality and a longer printhead life.

    Find out more about the high-performance Honeywell PX940 industrial printer with integrated label verification technology – and how it can help you eliminate the risk and costs of bad labels.

    Contact Honeywell Solutions Expert today! Call 1-800-934-3163.

    1TB&P: Wal-Mart to impose stiff fines against suppliers around merchandising errors

    Barry J. Ewell

    Barry J. Ewell is a Senior Content Marketing Communications Specialist for Honeywell Safety and Productivity Solutions. He has been researching and writing on supply chain topics since 1991.