Product Sale And Return

How to Factor in the cost of a Product Sale and Return

Product sale and return is a necessary cost of doing business in our current marketplace, allowing customers to return products that have problems, they don’t need or don’t even like after purchasing them within a set time frame. However, when a company offers this guarantee, they have to be able to back it up and deal with the products that are sent back, from a cost basis. It’s important to factor all aspects of this process in as well, as not doing so can negatively affect your bottom line.

First, make sure you have accounted for the manpower needed to deal with returns, both physically handling each item but also inspecting each item so that it can be sold in a secondary market if it’s not damaged or malfunctioning. Then you have to deal with the cost of returning the money to the customer who doesn’t want it anymore. Assume this will happen to a low percentage of your product when doing your numbers.