In my 30-plus years of being an accountant I have learned many business lessons from people who were much smarter than me. Jerry Crawford was one of those people. Jerry taught me about product returns.
Jerry – who sadly passed away a decade ago – sold carpets wholesale from a nondescript little building in south Jersey. He employed about 50 people and counted many local and national carpet retailers as his customers. When I reviewed Jerry’s books, I noticed a large reserve for “returns”.
A “reserve” is something businesses create for potential future costs. Some reserve for bad debts. Others reserve for inventory that grows old and will need to be disposed of.
And plenty of businesses – like Jerry’s – reserve for the potential costs that will be incurred if a customer returns their product. Returns are just a normal part of business. Plenty of small business owners like Jerry go to great lengths to make the process as easy as possible.
Some big companies, such as Amazon, do the same. And yet, it seems that many businesses still haven’t learned this lesson. According to the Wall Street Journal, many Americans are complaining that it’s getting harder to return things.
They’re seeing “surprise fees, shorter return windows and more questions about their reasons for sending products back”. Some, according to the report, are “getting warnings that they won’t get a refund on their next return”. Jerry would be shaking his head at this.
Extract — continue reading at the source.
