Return Merchandise Authorization (RMA)

Return Merchandise Authorization

 

Handling returns is a part of many manufacturers daily practice, they accept the products back and process claims.

This widespread process is historically named in different ways – Return Merchandise Authorization (RMA), Return Material Authorization (also RMA), Return Goods Authorization (RGA) or Return Authorization (RA).

Goods could be returned for a refund, repair, or replacement. Even if there are a few RMAs, it is a crucial part of the business that has to be handled professionally, since it can affect reputation significantly in one or the other way. Also, learning from RMA trends helps to increase product quality and minimize further returns.

The first step in this process is receiving a request from the customer to return merchandise. For this the manufacturer will issue a unique RMA number, which will be used to mark the returned goods when shipping back.

Once the items have been returned they have to go through inspection, each item has to be analyzed to determine the solution to the return authorization. In general, the options are following:

  1. To replace the goods.
  2. To reject the return and ship goods back.
  3. To repair/refurbish the goods.
  4. To refund the customer.

If there are no clear processes defined and no special software to handle the returns, it can lead to many issues. Mainly if there are many returns, then some can fall through the cracks and get processed extremely slow since there is no clear system and a clear overview of the situation. Since each return is different, it’s a dubious process to guide each order from receiving to fulfilment, there are many steps to follow – some orders need to wait for repairs, others for spare parts, some for manufacturing of replacements, etc.

Once the product return is processed, the replaced goods will stay in the inventory and also need to be managed properly to avoid pileups. Possibly these could be resold, recycled, remanufactured or taken into spare parts.

RMA in MRPEasy

MRPEasy manufacturing resource planning software (MRP software) manages all the sides of the Return Merchandise Authorization process. It keeps track of the return from initial request and issuing RMA number through inspection to solution along with creating service orders, booking replacement goods, tracking inventory of returned items, creating shipping documents and invoices for repairs or refunds when necessary and much more.

Photo: John W. Young on the Moon. Source: Wikipedia.org