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Return Merchandise Authorization (RMA)

What is a return merchandise authorization (RMA)?

A return merchandise authorization (RMA) helps retailers keep an organized record of their returns, and allows customers to return their items (with a reference number) to the designated fulfillment center. With RMA functionality, merchants have an easier time navigating when a customer returns items for repair or maintenance, or for refund or replacement.

Issuance of an RMA falls within the reverse logistics cycle, and gives the seller a final opportunity to correct the customer’s issue (like improper installation or configuration of the product) before they finalize the return. Because returns are costly for vendors and inconvenient for customers, any return that can be prevented really benefits both parties.

Frequently Asked Questions

  • How does an RMA work?

    A return merchandise authorization is used when a customer wants to return a full or partial order. The customer typically fills out an online form, which is then sent to the seller; depending on the seller's return policy, the client may receive an RMA number, which indicates the seller will accept their return. There are various reasons why customers may wish to return goods they’ve purchased, including changing their mind, quality of the merchandise, personal dissatisfaction, or mistakenly ordering the wrong product. 

  • How do you create an RMA?

    To create an RMA for your ecommerce company, start by defining your basic policies for returned products. For example, think through the time frames for returned items following successful delivery, and outline valid reasons to accept returns: wrong product received, defective product or damaged during shipping, duplicate order, etc. 

    From there, make sure you have an RMA form clearly marked on your company’s website. This form should include: contact information for the team member who handles returns; a section for the customer’s information (name, address, email, phone, invoice number); a section for the item number and the reason for return; and a section for special instructions from the customer. 

    If a customer submits an RMA request and the product meets your company’s criteria to be returned, let them know: (1) when you’ll send for the product, and (2) whether they’ll receive a refund or whether you’ll send new products to make up for defective devices. Your RMA process should be set up in such a way that your customer has to put in as little effort as possible to return the merchandise — which is why offering a pick up service (especially when the RMA is approved for a defective product) will always boost customer satisfaction. 

  • Why use an RMA?

    Ultimately, RMAs exist to make the return process seamless for the consumer and cost-effective for the seller. With an efficient RMA system, businesses are better able to monitor, track, and return or exchange items for the buyer. That’s because when a return has gone through the RMA process, your system is ready to accept those return items, credit buyer accounts, and determine what will happen to the merchandise upon arrival. In other words, return management tosses out invalid product returns, offers exceptions when return periods end, and helps your company focus on production (rather than the returns process itself). 

More terms and formulas

formulas Retail Price See definition and examples
Fulfillment & Logistics Manufacturer's Suggested Retail Price (MSRP) See definition and examples
formulas Average Selling Price (ASP) Definition & Example See definition and examples

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