Return merchandise authorization

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A Return Merchandise Authorization or Return Material Authorization (RMA) is a transaction whereby the recipient of a product arranges to return goods to the supplier to have the product repaired or replaced or in order to receive a refund or credit for another product from the same retailer or corporation. In practice, an RMA is only issued after a series of tests. However, in recent years RMAs have become more liberal due to increased competition for customers^{[citation needed]}.

Contents 1 RMA Procedures 2 Replacement of the term RMA with RGA 3 Possible reasons for returns 4 Relationship with Enterprise Resource Planning (ERP) Systems 5 References

[edit] RMA Procedures

The specifics vary between different retailers and industries, but in general the steps taken are similar. For this example we will use a hardware product:

• Should the customer encounter a problem, they generally call a customer service phone number and get an "RMA number" or designation which is written on the bill of lading or other packaging. This is so that the supplier's own shipping and receiving department knows how to route the returned goods and is assured that the customer has talked to someone in customer service.

• If there exists a defect in the product, the engineer on call will have to ascertain as to whether or not the hardware had suffered CID (Customer Induced Damage). This is done to prevent the company from accepting losses on behalf of the supplier due to negligence from the retailer. If no CID is found, the product then goes to the scanning vendor, who will try to repair the defect if there exists a minor defect, before returning it to the customer. If this is not possible, then the item is sent to the principal vendor for replacement, and the principal vendor will once again check whether there were any defects in the product or whether the product has been tampered with.

• Finally, if the principal vendor finds a confirmed production defect, the supplier replaces the material with another of the same (which is not defective), or he issues a credit note to the customer or retailer which may be exchanged for cash or another product, depending on individual company policy.

In some cases the retailer sends RMA forms and packing labels, sometimes even prearranged packaging for the return shipment. The labels may provide for the retailer to pay the shipping charges, e.g., by freepost.

[edit] Replacement of the term RMA with RGA

Often, the term RMA is used by customers (usually as a verb) to refer to the physical act of shipping a defective product back to the vendor, e.g. "I'll have to RMA that new system because it was dead on arrival."

RMAs are also referred to as RGAs (Return Goods Authorization), product returns, and customer returns.

[edit] Possible reasons for returns

The following are some of the most common reasons for RMA returns.

1. Customer does not want product
2. Product DOA ("dead on arrival")
3. Incorrect product shipped
4. Product ordered incorrectly
5. Order entered incorrectly
6. Duplicate order shipped
7. X-Cross order

[edit] Relationship with Enterprise Resource Planning (ERP) Systems

Many ERP systems, used by manufacturers and distributors, include an RMA (Return Material Authorization) software module. The RMA software module allows the manufacturer and distributor to track customer returns, product failures, and product repairs. The data collected from returns provides critical information to manufacturers to help them design and develop better products – and to isolate component failures. The RMA software module also organizes the RMA process which consists of many steps including 1) the initial customer call and issuance of an RMA number, 2) when/if the product was received, 3) evaluation of returned product, 4) estimate if not covered under warranty, 5) repair and parts used on repair, and 6) return to the customer.

Standalone RMA software products can be purchased to handle the RMA process, or shippers can subscribe to a Web-based service.

[edit] References

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