What is a Return Merchandise Authorization?

Dale Marshall

A return merchandise authorization is approval from the seller of merchandise that enables the purchaser to ship it to the seller for repair, replacement, credit or refund. It authorizes the customer to return the merchandise, and its unique identifying number written on the shipping label authorizes the seller’s shipping and receiving department to accept delivery of the package containing the return. A long-time staple of mail-order transactions, return merchandise authorizations (RMAs), called return goods authorizations (RGAs) in some markets, became much more common near the end of the 20th century as retailers increasingly entered the world of online commerce. The resulting long-distance sales made the delivery and return of merchandise more and more dependent upon shipping and mail services.

A return merchandise authorization allows a buyer to return items and goods to a seller for repair, product replacement and refund.
A return merchandise authorization allows a buyer to return items and goods to a seller for repair, product replacement and refund.

In most cases, when goods are sold, the purchaser has the right to return them. In most traditional retail settings, the retailer has a specific policy with respect to merchandise returns, usually restricting them to a relatively short period of time after the purchase, and further specifying minimum standards for the condition of goods returned for refund or credit. The customer brings the merchandise back to the retail outlet with documentation of the purchase, usually a receipt, and presents it for return. If the circumstances are consistent with the seller’s return policy, the seller accepts the returned merchandise and issues the refund or credit. The merchandise is usually restocked in the seller’s inventory and prepared for sale.

Purchasers of merchandise from mail-order and online sources generally have the same right to return merchandise, but the process presents more of a logistical challenge to the seller. In the traditional environment, for example, returns are handled one by one and usually examined on the spot by the seller. All paperwork is handled on the spot as well, as is the refund or credit, and the transaction is complete when the customer walks away. When a mail-order or online customer initiates the return process, if the request is in accordance with the seller’s return policy, a return merchandise authorization is issued. In many cases, for efficiency’s sake, as well as environmental responsibility, the return merchandise authorization is incorporated into the shipping label used to deliver the goods, and then the customer can reuse the shipping label to return the goods. Otherwise, when the customer prepares the shipping label for the return, he simply writes the return merchandise authorization number somewhere on the label.

The long-distance return process is much the same as the in-store process. The return merchandise authorization generally captures all the information that would be recorded in-store and is often printed on the same document that the seller provides to the customer as a shipping label, so the relevant information can be read or scanned off the label without having to open the package upon receipt, facilitating the delivery of the return package to the proper location. When the return package is opened, the condition of the returned goods is examined, and if it’s acceptable, the refund or credit is issued.

A return merchandise authorization, then, is simply the reduction of the return process to writing to facilitate the process of returning goods long distance for refund. The same process is usually applied to the shipment of merchandise to the seller for repair or replacement. In all cases, the return merchandise authorization process mirrors the process followed when customers hand-carry merchandise into the seller’s establishment to return it.

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