What is RMA(Return Merchandise Authorization)
25 Feb 2021
RMA is an acronym standing for Return Merchandise Authorization, which is an aspect of a reverse logistics system.
While selling online, it is quite normal to deal with order returns. Return merchandise authorization allows sending back purchased products.
As long as the order returns are common in eCommerce, it is important to understand what does RMA stands for in reality and how your business could benefit from it. Retailers might be interested in many questions like what is an RMA number or how to implement an RMA return of their inventory.
This blog post will help you to understand everything in detail referring to RMA.
What is the Purpose of the RMA System?
All the retail businesses, even the most successful ones, have some products which are hard to sell or even impossible to sell at all. That is one of the reasons why retailers might need to send back the inventory which they purchased. That dead stock keeps remaining on the warehouse shelves of the companies and starts costing huge money and resources.
A return merchandise authorization (RMA) system is crucial to the firms that are selling online. Return authorization is an advanced inventory control mechanism for vendors, wholesalers and manufacturers. This system helps to achieve a smooth product return process and prevent keeping a dead stock in your warehouses.
Here are the main two factors which determine whether you will get an RMA or not.
Vendor-Retailer Business Relationship
An RA (Return Authorisation) issuance heavily depends on the established relationship you have with the vendor, wholesaler or manufacturer with whom you are working as a retailer. Issuing an RA is not easy for the vendors. It will cost money and resources for the vendors, and your established business relationships with your vendors will determine a lot.
If your vendor trusts you in many things most probably you will have a chance to negotiate. It is quite understandable as the vendors have to determine whether it’s worthy of giving you a chance, issuing an RMA or not.
You as a retailer should be good at keeping appropriate inventory levels; otherwise, the vendors will be less likely to coordinate all the times and accepting your order returns.
Try to establish a good relationship with your vendors in order to manage and control your inventory return process easily.
Inventory Age & Expiry Dates
Issuing an RA depends on the dates the retailers purchased the products, the inventory age. The older the inventory is, the less likely it will be for vendors to issue an RMA. It is quite understandable that reselling old merchandise to another retailer is not an easy task.
The expiry dates refer to all the food-related industries and fashion where seasonality plays a vital role. To increase the chances to get an RMA, the retailers should try to submit it before the end of the season. If so, the vendors will still have to determine to issue it or not, considering your business success at the same time.
How to Receive an RMA?
The issuance of an RMA depends on the companies’ order return policy as well. There are companies that will allow only defective products to be returned while others might allow returning any unopened products.
The Typical Product Return Process
The vendor’s technical support office confirms whether the product you are submitting is defective or not. After confirming that the product is faulty or that the Vendor is willing to get the orders back, issuance of an RMA occurs.
After that, the Customers write an RMA number outside the parcels or inventory packages which are shipped back to the Vendors. The buyers should provide all the original boxes, manuals, or other relevant items attached to the product. Any order return which is without the RMA number written on the packages will be a reason to charge additional restocking fees.
In the last step, the retailers mail the products, and in most cases, the merchants recommend using 3PL shipping companies. It is worth mentioning that an RMA number helps the merchants confirm that a particular item belongs to their company. It helps to protect the company against fraudulent returns.
RMA number helps the retailers as well. When the retailers don’t receive any information about their purchased product, they can call their vendors and use the RMA number as proof.
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