Returns

Returns are common enough in e-commerce to warrant their own treatment in Pakk. Here’s a guide on how to manage the returns process, right next to all your other processes.

Managing Returns

Returns are common enough in e-commerce to warrant their own treatment in Pakk. Here’s a guide on how to manage the returns process, right next to all your other processes.

Creating a Return

The process starts by creating a new Return record on the system. Returns are linked to an underlying Sales Order (the order which is being returned). There are two way to create a Return:

1. Directly from the Sales Order that is being returned, by clicking the Full Return button

2. Manually, by going to Returns and clicking Create New

When creating a Return directly from a Sales Order, a lot of information will be transferred for you - the customer, address details etc, and particularly the line items. All dispatched items from the order will be reflected in the created Return. Of course, if the customer isn’t returning everything, you can edit the created Return to reflect what is being returned.

When creating a Return from scratch, you will have to choose the Customer and fill in line item details manually.

Return Metadata

Return Reason

There are two places on a Return where you can log the reason:

1. Return Reason: the main reason for the Return. This is an internal field and the customer won’t see it.

2. Line Reason: if you need to make further notes on the reason for Return for each individual line, you can do that as well. These line reasons are visible to customers on some transaction PDFs.

Return to

Choose a Location from your predefined list of Locations to indicate where the goods are to be returned to. Choosing a location prefills the Return address, which will be used for paperwork like the authorisation and shipping label. You can also add contact details for the return which also appears on paperwork.

Shipping

As well as choosing where the stock is being returned to, you can also set up detailed information about the return logistics:

• Is the stock being collected from the customer?

• When is it due in?

• How is it being returned?

• Tracking reference for the return

You’ll find all of these fields on the ’Shipping’ tab.

Return Lines

Indicate which items are to be returned and in what quantities. As mentioned above, you can also specify a more exact reason for the return of that line.

For stockable products, you will also need to choose a batch into which returned stock will go. You can use an existing batch or create a new one if required. Note that you can select from batches at all locations, not just the location chosen for the return - this is to allow for unlocated batches, as well as locations that might be physically adjacent where the return is going to one ‘Location’ but some of the stock will go to batches at a different ‘Location’.

The Location of the chosen batch is shown on the line, so you can make sure you’ve got the correct batch.

Tags

Return tags need to be set up at account level by an account owner. Once they are set up they can be used by anyone to classify, categorise and organise Returns. For example, you might create tags like:

• Arrived too late

• Damaged in transit

• Expired stock

• Statutory return

Tags can help you at the reporting stage to understand the main sources of returns in your business.

Returns Workflow

Returns have a built-in status workflow that looks like this:

In preparation → Pending Receipt → Received → Booked In or Stock Discarded

You can supplement the built-in flow with your own ‘stages’. Like tags, stages need to be set up by an account owner. You don’t have to use stages, but if the built-in statuses don’t reflect the granularity of your internal workflows, you can use stages to be more precise as your returns flow through your internal processes.

In Preparation

The initial status for a Return. This is the status of the Return up until you have authorised the return of the goods, informed the customer, prepared the paperwork etc. If the Return was created subsequent to a customer interaction through the Ticket system, you can link a Ticket to the return, allowing you to quickly move back to the Ticket system in order to communicate with the customer.

If you need to send paperwork to the customer there are multiple PDF templates available:

• Customer authorisation: this template shows information about the return, including the reference, as well as a breakdown of items to be returned. It is suitable for the Customer to place into the returns box, or use as a reference for preparing their return (like a packing list).

• Shipping label: if the customer needs to organise transport themselves, they can afix the shipping label.

If your warehousing is dealt with externally and you need to send a notification to them, there is a PDF available for that purpose too.

Pending Receipt

Once you’ve made the preparation for the return, informed the customer, notified the warehouse if necessary, organised the transport if required etc., you will want to mark the Return ‘Pending Receipt’.

Received

As soon as stock is received by the warehouse, the Return should be marked ‘Received’ - this will not yet make stock available for purchase - it is an internal workflow step that logs that the goods have been physically received.

Your warehouse will probably need to check the goods before they can be put back into stock - this should happen now.

Booked-In / Stock Discarded

The final step in the Return workflow. Once your warehouse staff have checked the returned items, they will decide whether or not they can go back into stock.

There are three options:

1. The whole return is ok to go back into stock: click ‘Booked In’.

2. Some items are ok to go back into stock, but others need to be discarded: check the box ‘Discarded’ on the lines that are not going back into stock and click ‘Booked In’.

3. The whole return is to be discarded: click ‘Stock Discarded’

Stock Levels and Accounting Impact

Stock

Stock levels of any item/batch are only impacted when the status of the Return is ’Booked-In’.

Accounting (Journal)

• Returns with status ‘In Preparation’ and ‘Pending Receipt’ have no impact on the journal.

• Returns with status ‘Received’ will create a journal entry which increments your default ‘Stock Returned Not Booked In’ with the value of the returned goods. The counterpart will be a journal line assigned to your default 'Customer Returns' account.

• Returns with status ‘Booked-In’ will reassign the stock-value increase to your default ‘Stock’ account - the counterpart remains the ‘Customer Returns' account.

• Return lines with status ‘Stock Discarded’ impact against your default 'Returns Discarded' account.

Note that both the 'Customer Returns' and 'Returns Discarded' default accounts are expense accounts designed to be netted against the main COGS account in income statements. Their net impact is on COGS, but the accounts are kept separate for visibility. Note that the these accounts do not record the financial impact of any lost income originating with any credit linked to the return - this is dealt with separately by the journal entry created should you also credit the order.