Posted by Stacy Jackson
Remember that "Seinfeld" episode where George got in trouble for dipping his chip twice? People were really irritated that he double dipped. I think we find double dipping troublesome in the world of foodservice, too.
For those new to foodservice claim settlement - and those who accidentally wound up on this blog - double dipping, in this case, refers to foodservice operators that receive rebate payment on a purchase more than once. For example: Restaurant 123, an independent operator, receives a manufacturer coupon for Product A. It also receives another promotion from the manufacturer that includes Product A. Guess what . . . the purchase time frames for both the coupon and the second promotion overlap. Unless the manufacturer has a solid settlement solution, the manufacturer will pay Restaurant 123 twice for the same purchase.
But wait . . . there are more opportunities to "dip." Here we get into the dreaded triple dip: Restaurant 123 is also part of a Group Purchasing Organization (GPO) that has a program that also happens to pay on that same Product A. Restaurant 123 gets a rebate from the coupon, the second manufacturer promo listed above, AND a payment as part of its participation in the GPO. The manufacturer is paying that one customer three times on the same case purchase!
Double and triple (quadruple, quintuple, to infinity and beyond) dips don't just happen with independent operators. National and large regional chain accounts will have a contract with a manufacturer, and franchisees of those chains may also have their own contract/rebate program. The corporate headquarters receives special pricing/incentives from the manufacturer, and the franchisee receives a different deal from the same manufacturer on the exact same cases. A manufacturer may not even have a way to determine the depth of multiple dips if it only receives sales data from distributors instead of billback data.
Answers Systems helps foodservice manufacturers address and correct the double dipping problems they face. With our ability to receive data (paper & electronic), verify purchases, settle claims, and analyze activity against contracts, we save manufacturers thousands of dollars every year that would have otherwise been multi dipped. If you are concerned about your exposure to multi dipping, please contact us today!