Returned Merchandise Authorization (RMA) and Return Goods Authorization (RGA)

WHAT IS A RMA OR RGA

A Return Merchandise Authorization (RMA) is a transaction whereby the recipient of a product arranges to return defective 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.

Generally, this is done with goods that are new and have been received DOA (“dead on arrival“) or when they have become defective while still under warranty

The customer generally calls a customer service phone number and gets 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

The specifics vary from one retailer to another and between industries. In some cases the retailer sends RMA forms and packing labels, sometimes even shipping packaging for the return shipment. The labels may provide for the retailer to pay the shipping charges, e.g., by freepost

Regardless of the details, the process is referred to as an RMA. Sometimes the term is informally used as a verb: “I’ll have to RMA that new system because it was DOA.” 

PROCESS

An RMA is a numbered authorization provided by a mail-order merchant to permit the return of a product. Most mail-order businesses have a policy concerning returns. Some companies allow only defective products to be returned; others allow any software to be returned if it is unopened. To return a defective product, a typical process is:

First, the customer must call the technical support office and speak with a technician. The technician helps to determine whether the product is indeed defective. This usually involves the customer answering several questions and following the technician’s directions for testing the product in question. If the technician feels that the product is defective, the technician issues an RMA. This process is especially important concerning software. Most merchants do not allow the return of software unless the packaging is unopened. This policy prevents software piracy. Some merchants allow the customer to send an e-mail message requesting an RMA instead of having to call.

Secondly, the customer must write the RMA number on the outside of the box that the product is being shipped in. It is important to mail all the original boxes, manuals, and any other items along with the product. If a return is sent without an RMA number, the merchant can return the product to the customer or charge a restocking fee.

Finally, the customer mails the product. Most merchants recommend using a shipping company that can track packages

ACTION BY EACH PARTY

Customer Actions – Customers have their choice of returning items for credit, replacement or repair. You can credit the customer’s account, or apply it to their credit card. Replacement returns can be exchanged for the same item or an alternate item. A single entry marks an item for repair, and provides customer return instructions.

Item Actions – Actions can be assigned to each item after it is received and inspected. Items returned to stock can be sent to a return warehouse or the original selling warehouse. Unusable items can be returned to a scrap warehouse. Repair items are returned to a repair warehouse, fixed, and returned to the customer.

Vendor Actions – When the Purchase Order module is integrated with RMA, vendor actions of return for credit or return for replacement can be assigned to each item. Selecting these actions in RMA Receipts Entry causes the appropriate documents to be automatically created during the RMA transaction generation process.

Cross ship Order Entry – If a customer can’t wait for you to receive the return before you ship the replacement, cross shipments can be originated by clicking on the Xpress Order Entry button from within RMA Data Entry. This activates Sales Order Data Entry, and populates a new order with the urgently requested item.

CRITICAL ISSUES FOR RMA AND RGA

Calculate Restocking Fees – Restocking fees can be assigned by inventory product line or by individual item. You can even waive restocking fees for selected customers at the time of RMA entry, giving you the utmost in flexibility

Warranty Tracking – RMA automatically calculates warranty expiration dates based on Inventory Management options and warranty codes. When processing returns, the operator is alerted to any expired warranties and can opt to extend the warranty on any item.

Unannounced Returns – Occasionally returns may arrive at your warehouse without prior approval.Warehouse personnel can enter these unannounced returns after inspection and easily process them through the system

Scrap and Repair Warehouses – Easily track each type of return by identifying specific (actual or virtual) warehouses for returns, scrap, and repair items.

RMA Inquiry – You don’t need to know whether an RMA is still pending or has been received in order to find it. After entering an RMA number, the program automatically determines if the RMA is open or received, and displays the requested record.

Generate Transactions – This powerful program uses the information entered in RMA Receipts Entry, along with historical and customer information, to create all necessary documents, including sales orders, credit memos, vendor return orders and purchase orders

Return Reason Tracking – During RMA Entry, a return reason is assigned to each line. The reasons print on the Return Reason Report to help you identify potential quality or other customer satisfaction issues.

Receipts History – Full receipts history is tracked and all returns can be reviewed on the Receipts History Report. You can drill down to RMA information throughout the Sales Order and Accounts Receivable modules.

Integration – The Sales Order and Inventory Management modules are required for RMA processing, with optional integration to Purchase Order

CASES (WHY SOMETIMES RMA NEEDED)

Item shipped was different from what was ordered. This often happens on cables, adapters and other “small” items. It could also happen to items with different but similar models

Item shipped is inconsistent with what is described on the web site. This often happens because:

  • we sometimes are late in revising the item description, picture, and title
  • the description is vague or misleading or
  • we simply made an honest mistake on the web site
  • Wrong shipping method was used. This is very rare
  • Credit card charged twice. This happens very rarely. When it does, it happens almost exclusively on orders with Credit Card via Phone payment method and/or when a credit card is charged manually. Our on-line charge system does not allow charging the same credit card more than one time for the same order and leaves a good record of charging history. Manual charge is more susceptible to human error.

Item is missing on order. Check the quantity of the item you ordered and the quantity of items you received immediately after receiving your packages.

DATA FLOW DIAGRAM

Data Flow Diagram

 

 

SAMPLE RMA OR RGA WEB REQUEST FORM

Sample RMA or RGA Web Request Form

 

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