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  • #987980
    Brommies
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    Hi, I am looking for some advise regarding accepting a large number of returns from a customer:

    I had a new customer buy a large quantity of product from me to resell, they quickly decided they weren’t going to sell them as rapidly as originally anticipated and thus would like to return 60% of what they purchased to me.

    I have no formal returns policy re this sort of things, and dont know how I should handle this. This will impact me significantly as I already have ordered replacement stock and my cashflow will be hit really hard if I accept the return and refund the money.

    Additionally, I gave the customer a sizable discount due to the quantity ordered, but as they are now trying to return most of it how do I recoup my loss of profit based on the discount.

    Thanks,
    Warren

    #1165106
    MissSassy
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    This is a tricky one – you need to probably take the return and get a returns policy in place that meets all the legal requirements.

    Check with someone like legalvision.com.au or Fair Trading to make sure you are doing the right things with all your sales and returns legally.

    #1165107
    LucasArthur
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    Hi Warren

    Ouch… Always love Kelly’s advice…

    Re this situation, it’s difficult.. Will they be ongoing customers or are they severing ties completely?

    And how long ago was stock bought? Personally if I was supplying items wholesale (that is my client was taking a risk on buying stock in large quantities) I would not be returning the items or would offer to buy them back heavily discounted because it sounds more like they want to tidy up there can flow! It’s not really your burden if they “attempt to sell an item and can’t” as you have delivered the items you offer.. The fact they want to return as it hasn’t sold as quick as they wanted, is not your burden I feel..

    However, long term relationships combined with how long ago bought etc etc will have an impact on your decisions, or should.

    Re discount as bought in volume.. IF you opt to return I would be saying “so from the outset we discussed some great opportunities between us and for the bulk order you were offers x%. With the returns, the invoice needs to be re-evaluated and a more appropriate, if any, discount needs to be retrospectively applied and the difference funded from the return credit’. No offence intended although the discount was provided on a BULK purchase not a return.

    We always get people saying “ok so I want 12 of those chairs, what’s the best price?” Reply. If you take them all now I can do for xxxx.. They tend to come back and say ok so I will take 2, here’s your $xxx… Being who I am, I kindly refuse the sale and say once you pick up the remaining 10 pieces I will apply the total difference against the final chair leaving the store, so for now those 2 chairs are RRP PRICING :)

    Let us know how you go or what other advice you receive.

    Cheers
    Jason

    Jason Ramage | Lucas Arthur Pty Ltd | E: [email protected]   P: 61 3 8324 0344    M: 61 412 244 888
    #1165108
    Jenny Spring
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    Brommies, post: 191098 wrote:
    Hi, I am looking for some advise regarding accepting a large number of returns from a customer:

    I had a new customer buy a large quantity of product from me to resell, they quickly decided they weren’t going to sell them as rapidly as originally anticipated and thus would like to return 60% of what they purchased to me.

    I have no formal returns policy re this sort of things, and dont know how I should handle this. This will impact me significantly as I already have ordered replacement stock and my cashflow will be hit really hard if I accept the return and refund the money.

    Additionally, I gave the customer a sizable discount due to the quantity ordered, but as they are now trying to return most of it how do I recoup my loss of profit based on the discount.

    Thanks,
    Warren

    HI Warren

    You used the word ‘resell’. Does that mean they bought them from you at wholesale price? or is this a different arrangement?

    Usually, with a wholesale agreement, once they take ownership of the stock, they don’t return it, unless it is faulty or damaged on arrival.

    I’m guessing they didn’t buy at wholesale, because you indicated they got a discount…

    I’d recommend you take back the product and be happy they are keeping 40%.

    Returns are part of doing business.

    Jenny

    #1165109
    Tony Manto
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    I agree, take them back. You have to look at the long term value of this customer. If you think they are going to be a pain in the #*## then say NO!

    But if they are of value to them, then I would take them back. You are within your right to apply a return fee equal to the discount you gave them. Just do the maths and take It off their return amount.

    Also if you can, you could negotiate to swap it for other stock if you have it. Once again, you will need to deduct the freight and cost of doing this swap.

    #1165110
    bluepenguin
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    Whatever you do, be mindful that you will set the precedent for future business.

    #1165111
    cokele
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    Like what others have said, you need to evaluate if you intend to have a LT relationship with this buyer. Sever or continue.

    You may apply a restock fee based on a % and consider freight costs etc when refunding.

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