Credit Memo Approval Process for Cannabis Vendors

How Credit Memo Approval Works in Cannabis

The credit memo approval process in cannabis determines how a credit moves from initial creation to final application against a vendor payment. ShelfSpace manages this workflow end to end, notifying both parties at each step and enforcing response deadlines. Every credit memo follows the same path, whether it originates from a return, expiration, or co-marketing deal.

Our credit recovery platform eliminates the back-and-forth that usually happens over email and phone. Vendors respond through their portal, and the entire conversation is recorded in the credit memo's event log.

The Five Credit Memo Statuses

• Draft — The credit memo has been created but not yet sent to the vendor. You can edit line items, attach supporting documents, and adjust the amount. Nothing is visible to the vendor at this stage.
• Pending Vendor Response — The memo has been submitted and the vendor has been notified. The 16-day response clock starts. The vendor sees the full memo in their portal and receives an email with the amount and reference number.
• Disputed — The vendor has counter-proposed a different amount or declined the credit with a stated reason. You can accept their counter-proposal, reject it and revert to Pending, or void the memo entirely.
• Applied — The credit has been approved (by the vendor, by mutual agreement on a counter-proposal, or by default after 16 days). The amount is queued for deduction on the vendor's next outgoing payment.
• Voided — The credit memo has been cancelled. Either party can void a memo before it reaches Applied status. A voided memo cannot be reactivated.

The 16-Day Auto-Approval Window

When a credit memo moves to Pending, the vendor has 16 days to respond. If the vendor takes no action, the credit is approved by default and moves to Applied status. ShelfSpace sends reminder emails as the deadline approaches so vendors have every opportunity to review.

This deadline exists to prevent credits from sitting in limbo indefinitely. Both parties are notified when auto-approval occurs, and the event is logged in the credit memo history.

How Counter-Proposals Work

Instead of accepting or declining outright, a vendor can counter-propose a different amount. For example, if you submit a $500 credit for returned product and the vendor believes only $400 is justified, they can propose $400 with an explanation.

When a counter-proposal comes in, you have two options:

• Accept the adjustment — The credit is approved at the vendor's proposed amount and moves to Applied.
• Reject the adjustment — The credit returns to Pending Vendor Response status, and the vendor has another opportunity to accept the original amount or negotiate further.

Notifications at Every Step

Both the retailer and vendor receive notifications throughout the process. Emails are sent when a memo is created, when the vendor responds, when a counter-proposal is submitted, when a credit is approved or voided, and when auto-approval triggers. In-app notifications appear in each party's portal dashboard. See responding to credits for the vendor's perspective.