Delivered In Full, On Time is the retail-channel metric that determines whether a brand gets paid in full on a purchase order or gets hit with chargebacks. It’s the percentage of orders that arrive at the retailer’s distribution center with the full ordered quantity AND within the agreed delivery window. Walmart’s OTIF program, Target’s compliance scorecard, and Costco’s vendor performance all use a version of DIFOT.
How it works in practice
The calculation is straightforward: DIFOT = (Orders delivered in full AND on time) / (Total orders). If a brand ships 100 orders to Walmart in a month and 92 of them arrive both complete and within window, DIFOT is 92%. Walmart’s current OTIF threshold is 98%. Falling below triggers a chargeback typically calculated as 3% of the cost of goods on the offending shipment. Target’s threshold is similar. Costco enforces stricter date adherence.
The math is binary per order. A shipment that’s 99% complete but missing one line is “not in full”. A shipment that’s complete but delivered the day after the window is “not on time”. Both count as a single failure against the percentage.
Why it matters
For brands selling to Walmart, Target, or Costco, DIFOT chargebacks can erase the margin on an entire PO. A 3% chargeback on a $500,000 PO is $15,000. Most brands selling to mass retail track DIFOT weekly, and 3PLs that serve retail channels build their inbound scheduling, EDI compliance, and routing-guide workflows around hitting it.
Common misconceptions
- DIFOT is not the same as on-time delivery. “In full” matters just as much as “on time”.
- The carrier is not always at fault for DIFOT misses. Late routing guide compliance, wrong pallet labels, and missing ASNs cause more chargebacks than carrier delays.
- DIFOT is measured at the retailer’s DC, not at your warehouse door. Transit variance counts against you.