To Return, or Not to Return…

Josie Leavitt -- August 6th, 2009

To return or not to return? This is an age-old question in the book business. I’ve always thought that doing returns was good for me and the bottom line, but I wanted to test that, so I set about doing some math to answer this question. Returning books is more complex than getting a credit back at the same discount you purchased the books.

My store is not big enough to have a dedicated shipping and receiving person (oh, wouldn’t that be heaven), so returns tend to get processed by two of us, in spurts. Often these spurts are during slow times, but with a small staff, having one person doing returns means there’s one fewer person on the floor selling books. There is a process to returns: you’ve got to pull books, organize the books, enter the books to be returned in the computer system, pack up the books and then ship the books. This is not a simple process. Often books need to be checked in a books-in-print database to make sure they can still be returned. 

And it’s shockingly easy to make mistakes. Publishers change all the time. When I last made Hyperion returns they could go in the box for Hachette — now, no. I got many books from my last Hachette returned because I forgot that Hyperion is now with Harper. And really, there’s nothing that sinks my heart faster than getting a box of "unacceptable returns" back from a publisher. It means I’ve paid for shipping twice: once to them and once for them to send the offending books back. There is nothing more irritating than getting a return back; it’s like an ex-boyfriend who just won’t stop calling. If you’re rushing to get the boxes ready for UPS or Fed Ex, it’s very easy to accidentally put the wrong label on a box, which means two boxes are going to come back to you.

Human error aside, shipping costs and staff time need to be factored in. A 37-pound box shipped from Vermont to Random House in Indiana costs between $16.22 via United States Post Office media mail, or $17.35 via UPS Ground. Now the the small savings by going to the post office needs to be balanced against the ease of having the package picked up by UPS. I generally don’t have enough returns to qualify for the bulk savings that are available through the UPS or Fed Ex. My shipping costs for my average box work out to be about 5%. So my 46% discount from the publishers tends to be more like 41% before I factor in staff time. Let’s use the same box we shipped to Random House and figure out what staff time costs with a $10 an hour staffer. If it takes her one hour per box, that’s an additional 2.5% out of that box going back to the publishers. Now my return is more like 38.5%. So I’m actually losing money, and a fair amount of it. 

Returns are good for several reasons. A credit balance at the publisher can help pay your bill when cash flow is tight. And returns can free up shelf space for books that are actually going to sell. However, after really crunching the numbers, I think having a sale might be a better way to go. Mark the offending books at 30% off and you’re still making 16%, which seems a lot better than losing money in this economy. And: sale books are non-returnable.

I’m curious what other booksellers do about returns. If you’ve got some great ideas/strategies, please share.

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