Prorate Freight Charges (D39)

Purpose: Use this screen to define whether to charge the customer for all freight charges on an order with the first shipment, or to charge a proportional amount of freight for partial shipments on an order.

Yes/no field: Select this field if you want the system to charge a proportional amount of freight for partial shipments.

Example: A customer places an order for two items at a price of \$10.00 each. Total freight for the order is \$4.00. One of the items is available, while the other is backordered. When you ship and bill the first item, the system charges \$2.00 freight. The system charges the remaining \$2.00 when you ship and bill the backordered item.

You can prorate freight only for the order level freight methods, which are:

The system uses the Freight method you define for the source code on an order.

Dollar chart freight methods: Before deciding whether to prorate freight, it is useful to consider certain scenarios that can result if you use dollar chart freight methods. Prorating freight is always calculated by percentage, even when the freight method on the order uses a dollar chart. For example, a freight method is using the following dollar chart:

 Merchandise Total Freight \$0.01 - \$24.99 \$4.00 \$25.00 - \$49.99 \$6.00 \$50.00 - \$74.99 \$8.00 \$75.00 - \$100.00 \$10.00

An order’s merchandise total is \$100.00, so the total freight charge on the order is \$10.00. However, the merchandise total for the first shipment is just \$20.00. The system prorates freight by percentage, so the first invoice has a freight charge of \$2.00 (20% of \$10.00) rather than applying the \$4.00 from the dollar chart.

If you subsequently process a return for that first \$20.00 shipment, the system does not credit the \$2.00 freight from the first invoice; the merchandise total is now \$80.00, which still merits a \$10.00 freight charge based on the dollar chart.

See below for more examples of how refunding works with prorated freight.

Cancellations with dollar-chart freight methods: When the order uses a dollar chart, processing a cancellation against a partially shipped order can result in a discrepancy between the total freight that is billed and the resulting order balance.

Example: Assume an order uses the example dollar chart provided above, and the same scenario where the order’s merchandise total is \$100.00 with a total freight charge on the order is \$10.00; again, the merchandise total for the first shipment is \$20.00, resulting in a \$2.00 freight charge billed for the first shipment. However, if the customer orders the remaining \$80.00 in merchandise, the final freight for the order is \$4.00, even though this amount of freight was never billed. If the order was prepaid, the refund amount would reflect the freight charge of \$4.00 rather than the \$2.00 that was billed; the customer would not receive the additional \$2.00 in the refund. However, the \$2.00 discrepancy can cause inconsistency in reporting.

Refunds on freight: If this system control value is selected, and you are using an order-level freight calculation, freight refunds may be prorated, depending on your freight calculation method. You should test your individual method to determine whether freight refunds are prorated.

Example: Freight method is \$ Chart by Src. Prorate Freight Charges is selected. A customer orders two units of an item. Freight for the order is \$5.00. The customer returns one unit. Freight charges of \$2.50 is refunded on the return.

Example: Freight method is Flat Rt/Ship To. Prorate Freight Charges is selected. A customer orders two units of an item. Freight for the order is \$5.00. The customer returns one unit. No freight charges is refunded on the return. The customer subsequently returns the second unit of the item. The full freight charge of \$5.00 is refunded on the second return.

Freight exempt items: There is no freight charge on a pick slip, even if there are non-freight exempt items on the order, under these conditions:

• this system control value is unselected

• the Use Item Freight Exemption File (E73) system control value is selected

• the pick slip includes only freight exempt items

• the order uses one of the freight methods listed in Working with Freight Exempt Items (WFEI)

Service charges by ship via: This system control value also controls whether any service charge by ship via on an order is prorated. See Working with Ship Via Codes (WVIA) for more information on defining a service charge by ship via.

Drop ship picks/orders: See Authorize Only Merchandise for Drop Ship (C92) for more information on how the system charges freight to a drop ship pick/order.

Note: If you override the freight amount in order entry or order maintenance, the freight is not prorated.

Leave this field unselected if you want to charge the entire freight amount with the first shipment on an order.

IN03_04 OROMS 17.0 2018 OTN