For many publishers, processing returns happens a few times a year during “slow periods.” Some publishers will go out of their way to avoid even thinking about returns.

It’s amazing to me how publishing executives will skip the returns department during tours of their facility. I attribute this to flawed thinking – they must believe in one or more of the 3 three myths of returns processing. If they could only separate the truth from the myth and realize the impact of returns, they would never avoid processing returns again.

Myth #1: Returns are junk.

This is the most pervasive, and the largest, myth about returns. When you look at a publisher’s balance sheet, one of the largest assets is the inventory. The reality is that returns are not junk, and not only that, there is real money to be saved in handling them properly. In our experience, less than 6% of returns for associations and 10% to 15% of trade returns are actually defective. Even ‘hurt’ books have value and when processed properly, they can provide the publisher with additional cash flow.

Reducing the number of returns is the best way of eliminating costs. That’s why, when it comes to returns, publishers need to ask the following questions:

• Why did the client return the book(s) to begin with?
• Was it the wrong product?
• Did the book not meet the customer’s expectations?
• Did a sales rep over sell to one of the bookstores?

Myth #2: When processing product returns, take your time – there is no hurry.

The key to maximizing the value of returns is to process the returned product(s) as quickly as possible. Processing returns slowly creates problems with inventory reordering schedules, accounts receivable, and customer satisfaction with your company.

With print on demand or short run printing, having accurate and up-to-date inventory counts is an absolute must. If your returns have not been processed, you risk incurring unnecessary printing costs plus the carrying costs associated with extra handling of the inventory.

When dealing with trade receivables, how many times has your accounts receivable (A/R) person made a call to an account that is 90 days past due only to hear that the merchandise has been returned? Not only have you incurred the expense of shipping the books and processing the return, now you also have the added expense of the A/R person.

It always amazes me when I hear clients and managers suggest that Ware-Pak delay processing returns in hopes of saving money. They believe they will reduce costs by using the returns staff as flex labor for everything else in the warehouse. However, the amount of ill will that is created with a customer when the return is not processed quickly is immeasurable.

Today, publishers are beginning to think in terms of inventory turns per year, rather than in terms of printing a 10 to 15 year supply. This only adds to the need for timely returns processing. Remember, returns are more like bananas than wine – they will not get better with age. The costs of not knowing your actual inventory levels are much higher than any savings for only processing returns periodically.

Myth #3: You can use your warehouse management system (WMS) to process returns. You don’t need special returns software.

We have looked at a lot of different warehouse management systems and concluded that none of them are robust enough to handle the demands of the publishing industry. Each system seems to lack essential features that publishers need to run their business.

Ware-Pak has developed a returns management application (RMA) that allows us to process 85% of all returns the same day they arrive in the warehouse. Our RMA begins by capturing the tracking number, customer name and address of the return. Next, the return authorization number along with the original carton number, if available, is added with the reason for the return (if stated). Each item is scanned, counted and inspected for damage. If any damage is found it is coded with one or more of the 12 different damage codes. After inspection is completed, any repairs that can be made are taken care of, such as changing the dust jacket, removing stickers, cleaning the outside of the book and removing marks on the pages. The final step in our process is to place the good books back into inventory so they are ready to be resold.

Each Ware-Pak client is different, but generally, a customized file (meeting the individual publisher’s software criteria) is created every Monday and placed at our FTP site to be imported into his or her system with all the returns information. In addition to the electronic file, each client receives the returns label, any returns paperwork found in the carton and a copy of our return order.

Fact: Returns have a great impact on a company’s bottom line.

In some cases, trade returns can be as high as 30%. Managing returns can have a huge impact on the publisher. Processing returns in a timely manner will enhance your customer’s experience, reduce costly inventory ordering mistakes and lower you accounts receivables. Isn’t it about time to ask yourself if your returns processing is “best in class?”