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What this is

The compliance clause matrix that governs all active vendor relationships — the specific standards a vendor must meet across product, logistics, financial, and data dimensions. These are the terms that chargebacks enforce.

Purpose

Compliance standards convert informal expectations into measurable, enforceable obligations. A retailer's ability to take a chargeback, dispute a delivery, or claim an allowance depends entirely on whether the standard was documented in advance and agreed to at setup. Compliance standards also provide the data model for vendor smart contracts: each clause is a term that can be encoded, monitored, and enforced programmatically.

Structure

Compliance standards fall into eight dimensions. Each dimension requires a specific agreed value or policy, not a vague commitment:

Product Quality — Acceptance criteria: defect rate threshold, inspection protocol, hazardous recall procedures. Defines what constitutes an acceptable lot and what triggers a return or destruction order.

Availability — Fill rate commitment (percent of ordered units shipped), backorder policy, out-of-stock notification requirements, and lead time guarantees by SKU category.

Net Pricing — Agreed cost per unit at order, including allowances and rebates. Defines how subsequent settlement adjustments (promotional, volume, markdown) are calculated against the base cost.

RTV Policy — Which product categories are eligible for return to vendor, return authorization requirements, credit timing, consolidation method (direct-to-vendor, DC consolidation, third-party consolidation), and handling fee treatment.

Carton Quality and Marking — Carton construction standards, unit load specifications, inner pack counts, barcode placement and format (UPC, GTIN), country-of-origin labeling, and date-code format for perishables.

Transportation and Routing — Carrier requirements, routing guide compliance, FOB terms (Origin vs. Destination), delivery window obligations, appointment scheduling, and documentation requirements (BOL format, packing list).

Discounts and Rebates — Volume rebate schedules (tiered by annual purchase), prompt-pay discounts (e.g., 2/10 net 30), off-invoice allowances, and billback allowance terms. Defines both the rate and the settlement timing.

Marketing Support and Co-op — Co-op advertising fund contribution rate, usage rules (approval requirements, brand standards), accrual method, and claim submission process.

Shared Forecasts and EDI — Whether the vendor receives buyer-level forecast data, the EDI transaction set requirements (850 PO, 855 acknowledgment, 856 ASN, 810 invoice, 852 sales data), and the timeline for EDI onboarding.

Signal

Compliance standard violations are detected at three points: receipt (packing, marking, quantity, quality), invoice matching (pricing, terms), and scorecard period close (fill rate, on-time, ASN accuracy). Each violation type maps to a specific chargeback code.

Consumers

The Receiving module compares inbound shipments against documented standards to flag violations and trigger disposition decisions. The AP module validates invoice terms against agreed payment conditions. The Operations Agent monitors compliance rates by vendor and surfaces violations trending toward chargeback triggers. The smart contract layer encodes agreed terms as on-chain obligations for smart-contract-native vendor relationships.

Invariants

Platform (2030)

Agent mandate: Technical Agent encodes compliance clauses as smart contract terms at vendor setup. Operations Agent monitors the live compliance event stream and detects violations before the scorecard period closes. Business Agent uses compliance data in negotiation preparation and vendor rationalization analysis.

Compliance as Solidity. Each compliance clause in the matrix — fill rate threshold, ASN timing requirement, carton marking standard, co-op usage rule — is encoded as a clause in the vendor's smart contract on the AVAX vendor subnet at setup. The contract IS the compliance agreement, not a PDF. When a compliance event occurs (ASN mismatch at receipt scan, short shipment confirmed by three-way match), the event is submitted to the contract as a transaction. The contract evaluates the clause, records the violation, computes the financial consequence, and updates the occurrence counter — all without human intervention. The vendor sees the same contract state the retailer sees; there is no dispute about what was agreed or whether it happened.

Real-time violation detection. Traditional compliance monitoring is period-based: the scorecard runs at month-end and reveals that a vendor has been non-compliant for four weeks. Operations Agent processes compliance events in real time from the receipt event stream. A fill rate declining across three consecutive shipments surfaces as an alert before it becomes a scorecard failure — when intervention is still possible.

MCP surface. compliance_status(vendor_id) returns active compliance clauses with current compliance rate per dimension. compliance_violations(vendor_id, period) returns the violation log by clause with occurrence count and financial exposure. Single-call, agent-readable without fetching the full vendor record.

RaaS. Compliance audit results and violation records are receipt-class events — timestamped, immutable after posting, sequenced. The compliance status of a vendor at any prior date must be reconstructible from the event log, required for chargeback disputes and audit defence. compliance_status(vendor_id) resolves from indexed SQL on (vendor_id, effective_date); compliance_violations(vendor_id, period) is a range query — index on (vendor_id, violation_date) mandatory to avoid full-scan at scale. Violation records are append-only; corrections are new events referencing the original. Compliance history exportable over rolling 3-year window for AP audit and vendor negotiation.

Canary Retail Brain · GrowDirect LLC canary@growdirect.io