Damages, expiry and returns

The idea

Every damaged or expired packet has an owner — the transporter, the company, the retailer or you. Who pays depends on where the damage was found and what paper was made at that moment. A returned packet without its paper always ends up as the stockist's loss.

Where damage is found

Read your company's damage and expiry policy before you take anything back. Some companies take back damaged and expired goods and reimburse them. Others pay a fixed damage allowance — a small percentage of your purchases each month — and take nothing back. Under an allowance, every packet you accept from a retailer is paid from that allowance, so you must be strict.

At the counter

In November, Kumar brings back market returns from his beats. The office handles them like this:

1. Check the batch. Every returned pack must be from a batch we supplied. A batch number we never received means the pack came from another stockist's area.
2. Write a return slip for each retailer: product, batch, quantity, reason. The retailer signs it.
3. Give a credit note to the retailer, or replace the goods. Do one or the other, never both.
4. Put the goods in the damaged stock — a separate place in the godown and a separate stock location in the books. Damaged stock is never counted as saleable.
5. Claim monthly from the company with the batch-wise list.
6. Let the company check before destroying. The sales officer or an auditor counts the damaged stock and signs for it. Only then is it destroyed or sent back, with a signed record.

November's returns:

We gave the retailers credit at the price we sold to them. The company reimburses at the price to stockist: 96 × ₹8.20 = ₹787.20. The ₹48 difference is our cost of handling returns — if the claim is accepted.

Selvi Bakery's 48 packs need a second look. Rat damage in the retailer's shop is not a manufacturing or transit fault. Many companies will reject it, and that ₹417.60 becomes ours. The salesman should have refused it.

Expiry is a stock problem first

Most expiry is old stock that was never moved. Check near-expiry stock every week, send it out first to the fastest-selling shops, and ask the company early for help to clear it. Once it has expired, you are asking for a favour instead of selling.

Common mistake

Putting returned packs back into saleable stock "because they look fine", or mixing them with the damaged pile without a return slip. The first sends a bad pack to another shop. The second means the claim list does not match the damaged stock when the company checks, and the whole claim waits — or is cut — until it does.

Where you'll use this

In Part 4, the return slip, the credit note and the move to damaged stock are one step on the salesman's phone, and batch numbers are checked against what was supplied (chapter 4.5). Near-expiry stock shows up in a daily report instead of a weekly walk around the godown (chapter 4.8).

Check yourself

1. A carton arrives crushed, but you sign the lorry receipt without a remark. Who is likely to bear the loss?
2. A retailer returns packs from a batch you never received. What does that tell you?
3. Why must damaged stock sit in a separate stock location?

Answers

1. You. Without the remark, the company and the transporter can say the goods arrived in good condition.
2. The goods came from another stockist's area. You should not take them back.
3. So it is never sold or counted as saleable, and so the count matches the claim list when the company checks it.