Return to Sender: The Story of a Love–Hate Relationship

By Aaron Hierholzer

The history page on Simon & Schuster’s website proudly declares that its founders made it “the first publisher to offer booksellers the privilege of returning unsold copies for credit—a practice that revolutionizes the book business,” happily oblivious to all the anger and controversy their little invention has caused.

Some numbers:
• 40 percent of manufactured books never sell.
• The typical waiting period before books start the long and expensive trek back to the warehouse is a mere four months.
• The industry return rate is 36.3 percent for hardcover and 25 percent for paperback.
• Superstores like Barnes & Noble sell around 70–80 percent of what they order, discounters like Wal-Mart and Sam’s Club only 60 percent.
• 37 percent of all books sent to stores in 2002 were returned.
• HarperCollins lost $250 million in 2002 on returns alone.
• Between 65 and 95 percent of returned books are destroyed once they come back from a bookseller (that’s a lot of time, energy, and money to be turned back into pulp).

The process was developed to help the little guy. In 1924, Max Schuster and Dick Simon were two enterprising young men scrambling to get the world’s first crossword puzzle compilation off the ground. They pitched the idea of a completely refundable product to the bookstores in hopes that it would make them more willing to buy. It worked, but in retrospect the practice seems almost as gimmicky as the little pencil that came attached to The Crossword-Puzzle Book. Bookstores decide how much to order; if they order too much, they can send it back.

So why continue such an antiquated and outmoded system? It’s a good question. The most important benefit is that returns allow bookstores to take risks, just like they did back in the crossword craze of the 1920s. A book buyer with a bit of intuition can have a spunky little unknown rubbing spines with Dean Koontz and Anne Rice in no time. Without the guarantee of 100 percent returnable merchandise, bookstores would be tempted to order only bestsellers or books with huge preestablished appeal.

So returns are a vital part of getting the book into stores. But once your book is on the shelf, returns become the enemy. As it exists currently, the returns process is often an exercise in inefficiency and waste. Perhaps reform is the key: Several years ago the advisory firm KPMG produced a report called “Tackling Returns,” which detailed steps to a more organized and less wasteful returns process in the U.K. That report sparked the Book Industry Returns Initiative, a movement that now lists hundreds of companies as supporters of its cause. Key to the proposed new methods are better organization and improved stock management. In the U.S., returns have been getting worse in the last decade, but the climate for small publishers has been improving. It’s also worth noting that of all bookstore outlets, independent stores have the highest sell-through rates (around 80 percent), suggesting that careful and insightful buying can minimize returns.

On the publisher’s side, preventing returns means getting back to basics: producing a quality product in numbers you can sell through, then timing publicity to coincide with distribution so you don’t have huge numbers of unpromoted books sitting on the shelf. When you do have to deal with returns, just remember that the ability to return your fresh-printed babies may be what nudges a buyer into giving them a place on the shelf and a chance at a reader’s attention. There’s something to be said for the process—but if you could give those ol’ crossword-puzzle hustlers a piece of your mind, even they would probably understand.

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2 Responses to “Return to Sender: The Story of a Love–Hate Relationship”

  1. Liz September 1, 2010 at 10:33 am #

    I would like to quote your numbers regarding industry return rates — can you please share the source(s) of these numbers?

  2. Sherri October 9, 2010 at 8:14 pm #

    Michael, I would love to show your pendulum mp3 at a presentation I am doing this weekend…do you mind?

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