An apparatus vertically realigns pallets in a stack of pallets. The apparatus has left and right panels with upper portions that are angled outwardly, and lower portions that are substantially vertical. Misaligned pallets in a stack placed in the apparatus engage the upper portions of the panels and are moved toward vertical alignment as the stack is lowered into the apparatus. The apparatus also includes compression plates that are movable between first and second positions relative to the apparatus. In the first positions, the compression plates have surfaces that angle toward each other and engage with misaligned pallets in the stack of pallets as the stack is moved from the apparatus toward a pallet dispenser. In the second position, the compression plates pivot toward the rear of the stack of pallets exiting the apparatus and push the stack into the pallet dispenser, thereby achieving additional vertical alignment of the stack.