What is a Return?

What Happens When Bookstores Send Books Back to Publishers for a Refund

A literary agent discusses book returns and how they impact the bookstore, the publisher, the established author, and new writers.

Books returned by the bookstore to the book publisher are called “returns” in trade book publishing. Unsold stock may be sent back for a full refund minus shipping costs at any time, so long as the book is still in print.

How the system works

Bookstore buyers select and order books to stock on their shelves; the publisher or their distributor has them shipped, and then the bookstore is billed with the amount due being payable some time later. Should the store managers decide they no longer wish to stock it, any book can be returned for a refund or credit.

How returns benefit bookstores

This policy results in bookstores returning books that aren’t selling quickly while at the same time ordering fresh new titles to replenish their inventory. In this way, bookstores are basically “floating” their bills, getting credit for the returns while getting a new bill for new books. Their net cost means that they are paying only the price of shipping (which is mainly one-way since paperbacks are supposed to be destroyed, not returned) which they chalk up to the cost of doing business. Their stock is always current, and they never get stuck with a supply of books that do not sell.

How returns affect publishers

Publishers live with the uncertainty of not knowing for sure whether a book will ultimately be profitable for weeks, months, or sometimes even years. This is long after the publisher has paid for the costs of acquiring, editing, printing and promoting the book.

Not only does the company not know where they stand, financially, for such a long time after orders have been fulfilled, but return policies create accounting and cash flow problems for publishers.

How returns affect authors

Authors, who receive royalties based on the sales of their books, must live with financial uncertainty and delayed payments.

Many publishers protect themselves by holding back a portion of the author’s earnings, called the “reserve against returns” until a future reporting period. If the publisher has not retained a sufficient reserve against returns, and later the quantity of returned books is high, it is likely that the publisher will overpay the author.

How the returns affect new writers

Returns result in a first-time author’s book having a brief shelf life, a limited time frame to capture the attention of a book-buying audience. Which is tough to accomplish when most books are displayed spine out in the bookstore.

This is why publishers today, including the smaller independent houses, place such emphasis on authors with “platform.” Even with expensive promotion support from the publisher, a title without a corresponding author platform could fail. If the publisher has ordered a large first print run, they have placed a lot of money at risk should there be a high return rate.

There are other considerations, as well.

Instead of complaining about the emphasis on authors with platforms, perhaps we should be grateful for the many books being published by unknown authors, even today.

Copyright 2007 by Barbara Doyen. All rights reserved.

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