Sales Returns And Allowances Flashcards, test questions and answers

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What is Sales Returns And Allowances?

Sales Returns and Allowances are two closely related terms that refer to how companies handle returns from their customers. When a customer returns an item, the company must decide whether to issue them a refund or offer them an allowance for the return. A sales return is when a customer sends back an item they purchased, usually due to dissatisfaction with the product. The company then issues a refund or credit for the purchase price of the returned item. Depending on the store’s policy, they may also issue a restocking fee if applicable. An allowance is when a customer receives part of their money back after they return an item. This typically happens when there is some fault with the product, such as it not being what was expected or it being damaged in some way. The store will deduct any costs associated with making sure that issue doesn’t occur again and offer a partial refund to compensate for the inconvenience caused by this particular instance of faulty merchandise. Both sales returns and allowances help foster positive relationships between customers and businesses by providing satisfaction guarantees for customers who are unhappy with their purchases and ensuring that companies can remain profitable despite unexpected losses from returned items. It’s important for businesses to have clear policies in place so that both parties know exactly what to expect when it comes time to process returns or allowances.