Return merchandise authorization

A return merchandise authorization (RMA), return authorization (RA) or return goods authorization (RGA) is a part of the process of returning a product in order to receive a refund, replacement, or repair during the product's warranty period. The purchaser of the product must contact the manufacturer (or distributor or retailer) to obtain authorization to return the product. The resulting RMA or RGA number must be displayed on or included in the returned product's packaging;[1] no returns are accepted without this number.

Return to vendor (RTV) refers to the process where goods are returned to the original vendor as opposed to the seller.[2]

Return merchandise authorization

The issuance of an RMA/RGA is a key gatekeeping moment in the reverse logistics cycle, providing the vendor with a final opportunity to diagnose and correct the customer's problem with the product (such as improper installation or configuration) before the customer permanently relinquishes ownership of the product to the manufacturer, commonly referred to as a return. As returns are costly for the vendor and inconvenient for the customer, any return that can be prevented benefits both parties.

The RMA/RGA process is also often used, particularly in the electronics industry, as a condition of service agreements. The term has also been applied to the return of a license of a proprietary operating system pre-installed on a computer when a consumer wants to install another OS (see Bundling of Microsoft Windows).

RMA labels

In many instances, return shipping labels are provided by the transportation provider or mail carrier.[3] RMA labels will often include the issued RMA number.

Return management

Returned merchandise requires management after the return. The product has a second life cycle after the return.

Returned goods need to be processed by the seller. Success in handling returns for many companies means quick processing times.[4]

In many instances, returned merchandise is stored at the seller's expense. Returned goods will just "sit around" on pallets in warehouse storerooms. Returns are often treated in a more haphazard fashion than new merchandise.[5]

Minimizing returns

An important aspect of RMA management is learning from RMA trends to prevent further returns. RMAs may be minimized in a number of ways.

Returns are sometimes minimized by reducing transaction errors prior to the merchandise leaving the seller.[6] Providing additional information to consumers also reduces returns.[7]

Return to vendor

Return to vendor (RTV) refers to the process where goods are returned to the original vendor. In many cases the RTV was originally returned to the seller by the end consumer. While RTV transactions usually occur between the seller and the vendor, in some instances the end consumer will return the product directly to the vendor, sidestepping the seller.[2]

See also

References

  1. ↑ Dana Dubbs, “Many (unhappy) Returns”, Operations & Fulfillment, Vol. 9, No. 3, March 2001.
  2. ↑ 2.0 2.1 Daga, Ashish. Collaboration in Reverse Logistics. White Paper. Wipro Technologies. Accessed March 28, 2014.
  3. ↑ “Parcel Carriers are Helping e-tailers Handle Returns”, Logistics Management & Distribution Report, Vol. 39, No. 11, November 2000, pp. 24 and 27.
  4. ↑ Leslie Hansen Harps, “Getting a Good Return”, Inbound Logistics,Vol. 21, No. 1, January 2001, pp. 185–194.
  5. ↑ Stock, James R. "Reverse Logistics in the Supply Chain". BUSINESS BRIEFING: GLOBAL PURCHASING AND SUPPLY CHAIN STRATEGIES. Accessed March 28, 2014.
  6. ↑ “Canon Slashes Chargebacks by Underscoring Accountability”, Chargebacks Solutions Monitor, Vol. 4, No. 4,February 2001, p. 3.
  7. ↑ Robert J Bowman, “From Cash to Cash: The Ultimate Supply-Chain Measurement Tool”, Global Logistics & Supply Chain Strategies, Vol. 5, No. 6, June 2001, p. 47.