Monday, July 20, 2015

Book Returns: What they Mean For Publishers and Authors

Returns are the bane of the publishing industry. Book returns can make or break a small publisher and destroy an author’s career before it even begins.

The return agreement between bookstores and wholesalers/publishers has been in effect since the Great Depression. It’s also unique, because no other industry has such a policy.

According to Brooke Warner’s article at the Huffington Post:

“The fallout from being a returns-based industry is that retailers have little incentive to order what they think they can really sell, and publishers rarely push back on what might be perceived as unrealistic orders because they're desperate for a shot at getting their product in a position where it might really move.”

Almost a third of all books are returned, a very sobering fact. Mass market paperbacks aren’t even returned. The cover is ripped off to send back to the publisher and the book is destroyed..

Returns come from two sources—bookstores and the wholesalers & distributors who deal with these stores. Libraries and book clubs don’t return books. And only Amazon returns ebooks.

The standard return policy is 90 days. Stores have three months to return books for a full credit, which includes shipping costs. In addition, returned books rarely come back in the same pristine condition in which they were shipped. Unless they look like they were put through a shredder, the publisher has to give the store credit. And those books become a negative balance in an author’s royalty check.

Example:
In a 3-month period, an author’s new book sells 10,000 copies to bookstores. The royalty statement would reflect royalties based on the amount of books that went out. But during that same 3-month period, 3000 books are returned. That is then deducted from the royalty to be paid to the author.
What’s worse, is that after its initial release, in the next three months only 1000 books are sold. But returns are continuing to come in. What if another 1000 are returned? Or even worse, another 3000?
And don’t forget the publisher who is now in the hole for production and marketing costs of those returned books.

Brooke Warner says:

“...most authors want their books to be in B&N, and it's good for a book to have the "chance" to be in B&N, but their returns (on a given title) are often higher than 50 percent, when the industry standard is 30 percent. They're also notorious for sending back damaged books.”

Returned books often can’t be resold as new. What are done with remainders and less-than-perfect books? Sometimes they are sold at a discount, donated to charity, or trashed and written off as an expense. That means the author gets a much, much smaller royalty from a returned book if it’s discounted and sold. Donated and trashed books are counted against the author’s royalties.

Plus an author with a lot of returned books won’t likely see a contract for a second book.

What do you think? Is it time the industry changed? Can it be changed?

43 comments:

Mason Canyon said...

Not sure what changes can be made. I'm just shocked at the fact that almost a third of all books are returned and only have a 3 month selling period.

nashvillecats2 said...

I read with interest what you wrote about publishing and books and I too was surprised at the short length of time they have to sell them.
Yvonne.

Ann Bennett said...

I doubt they change. What galls me the most is that they will return books so they don't get charged for them but reorder the same book for a knew length of time to return without penalty. I do think gaming the process could be ended.
If you write it is because you like to write.

Natalie Aguirre said...

I doubt it's going to change. And if the return policy changed, it would probably result in much smaller purchases by bookstores.

Yolanda Renee said...

I hope change is possible, but wow, such a short time span for success, well, for most of us.

Thanks for sharing all this, it's an eye opener!

randi lee said...

Hi Diane! Hope all has been/is well in Minion-land :) It's a real shame that we're such a "return-based" society these days. If people understood more that this is how we authors make our living, perhaps they'd be less apt to return so much...or, I'd hope they'd be!

Elizabeth Varadan, Author said...

Informative post! Like Mason, I was surprised that a third of all books are returned. I was also surprised by the three month selling period.

Alex J. Cavanaugh said...

Thirty percent is a lot of books!

Tyrean Martinson said...

I think it's sad that so many books are returned, but I know that bookstores are struggling to make it during all the changes with the e-reader market. Our local bookstore has shelves that aren't full because the owner doesn't want to order books that she can't sell . . . because there are so few buyers that come into her store.

Nicki Elson said...

The publishing industry has taken far too much advantage of the fact that most writers aren't money-motivated. Now that authors have so many more viable options, I hope it leads to change.

I've never understood how all those books can get so damaged when supposedly they're just sitting in a box in a warehouse or stockroom. I think we need to install hidden cameras to see what happens when no one's looking...

Karen Jones Gowen said...

B & N will also order late for an author event, with the books not even coming in time. Other stores have done this too, which is why at WiDo we tell authors they need to carry a case or two of books in their cars when they go to their signings at a bookstore. I can't tell you how many times this has happened with "late" orders, and the bookstore blames the publisher and their distributor for the books not being there, then returns them after the fact. It's so frustrating! I'd like to see authors not even using bookstores for their launch parties and signings, but other venues, especially if the authors have to bring their own stock anyway. I realize bookstores have low profit margins but so do publishers and grocery stores and just about every other business out there.

Jennifer Shirk said...

I had no idea the number was that high.
I've never returned a book--unless I bought the wrong book someone wanted and had to then buy another one in its place.

Rachna Chhabria said...

I am surprised by the three month selling period. Thanks for this eye-opening article.

Chrys Fey said...

Ouch! The whole time while reading this I was grimacing. This is something that no one tells us before we try to publish our books. No wonder why....

Susan Gourley/Kelley said...

I doubt this will change. It really helps everyone but the author to allow the returns. And the publisher holds back the royalties against returns for months and months. I know some hold back 75%. Amazon's return policy on ebooks is ridiculous.
Susan Says

cleemckenzie said...

Just one more thing the author must consider. This is not a business for the faint of heart, is it? I would think publishers would try to stop this practice, but it seems they're not successful. This is all in favor of the bookstore.

Rawknrobyn.blogspot.com said...

This is shocking. How is it good for anybody but the "reader" who's loving a chance to read everything he/she wants for free?! So frustrating. I wonder what it would take to make this change...? Your post is a good start. You spell out the problem very clearly. Thank you.

Annalisa Crawford said...

And yet people still think all authors are rolling in royalties! I just hate the thought of all that paper going to waste! Perhaps ebooks are the future, after all.

Sarah Foster said...

Thirty percent is a scary number! I used to work in a bookstore and occasionally had to pull the books from the shelves to be returned. I hated how they just ripped the covers off the mass market books!

Misha Gericke said...

I think the industry must change, and I think it could, if there was an economic incentive to do so.

My point remains this: Why should the author (or the publisher, for that matter) be held responsible for a bookseller over-ordering?)

dolorah said...

No wonder Amazon has gotten to be about the only place to buy books. Once listed at their site, at least the book is not "returned". Doesn't seem fair to charge the author for the poor marketing of a book store.

Maurice Mitchell said...

That's a sobering thought considering how much work goes into them L.

L. Diane Wolfe said...

Ann, they do play that game so well, too.

Tyrean, sad for her, but at least she's not adding to the problem.

Nicki, I think they run over them with a forklift.

Karen, that's why I tell people to doing signings other places besides a bookstore.

Robyn, it would take the big five publishers saying no to returns, and not sure that would ever happen.

Sarah, I know, it's such a waste.

J E Oneil said...

Wow, all that is kind of scary to read about. It sounds like some serious change is needed. I wonder if the introduction of ebooks has any effect.

Ella said...

Thank you, Diane-for telling it like it is. Gosh, I had no idea. This is so sad. I have only returned one book-a garden type one. I bought it for my mom and she already had it. So, I returned it and bought her a gift card.

Karen Lange said...

I'd heard about this but didn't realize the percentage was so high. I would hope things would change, but don't know what a good alternative might be. Thanks for the info!

Jo said...

And again, I'm glad I'm not a writer. I didn't know this happened. I knew paperbacks had their covers ripped off but not why.

Beverly Stowe McClure said...

I don't know whether it's possible or not, but I think returns should not be allowed. People ought to make up their minds which books they want to read and buy them. Then give them to friends or relatives or libraries for their sales, or like me have a houseful of books that I sometimes read again. That's my 2 cents worth. :)

Michael Di Gesu said...

Wow this is sobering information. I had no idea...

Publishers should stand firm. We are talking almost a century ago this was put into place. It is time for a change!

Hilary Melton-Butcher said...

Hi Diane - I certainly hadn't taken those points on board ... interesting and interesting to know it's nearly 90 years old - I can see the dilemma ... but have no idea what could be done about it - food for thought here .. thanks - Hilary

Elizabeth Spann Craig said...

Ultimately, the publisher would save so much money if the returns system were eliminated. Or if they toyed with POD. But the industry (retail and publisher end) is so set in its ways.

Medeia Sharif said...

I had no idea the number was that high. Everyone has been saying artists don't get the respect and money they deserve for the work they do--art is ripped off, books are pirated and returned, and music is pirated as well. I would say ebooks are a good solution, but then you had a recent post about how they're so easy to return on Amazon within days. This is all bad news for authors.

Tamara Narayan said...

I have heard about this, and it is awful. Too bad the paperbacks couldn't be donated somewhere. "Amazon returns ebooks." What does that mean? Does Amazon pay the publisher to distribute a certain number of ebooks just like paper ones?

Kimberly said...

Sheesh, that is a high number. Like many others, I didn't know how high it was. It's really sad that so many are destroyed.

M Pax said...

It's so wasteful. Print on demand is the way to go. There are vending machines that will do that in stores.

Cherie Reich said...

I knew of returns, but I didn't realize they were quite so high. Really I think they should leave returns to the consumer, not the retailer. A consumer (customer) does have the right within a reasonable time to return a product. Retailers shouldn't be able to return products they purchase to sell unless said product is damaged in some way upon receiving it. Will they change their policies? Probably not. Maybe we'll see the rise of print on demand when it comes to bookstores in the future to remedy this situation.

Tara Tyler R said...

waaaaah!
thats all i have to say about that. depressing reality.
but thanks for the info

Denise Covey said...

It seems an archaic process, with no winners really. I guess print on demand will increase. Tough times for all concerned. And thanks for your comments re Net Galley. I guess the cost is why it's mainly the big guys that are available. :-)

Arlee Bird said...

I hate to think of all the books that are just destroyed. I hope they at least recycle them.

Lee
Wrote By Rote

Nick Wilford said...

I might be naive, but I wince when I hear about books being trashed. It shouldn't happen, and there's the eco impact as well. I suppose they never know what books are going to take off. But some are slow burners and take longer to get good reviews and word of mouth. This policy must hamper that.

Romance Reader said...

Interesting and insightful post.

Stephen Tremp said...

Diane, there is so much waste in this business. When I sell my books by the beach I make a profit of about $4-5 per book. No returns.

Returns are frustrating. It doesn't seem that difficult to better project what a bookstore can sell so the returns are not at such a high percentage. When I worked at GE, I was amazed at how accurately people could project quantity orders in advance with so little waste. It's not that hard if you hire the right people.

Cynthia said...

My husband and I have bought audio books before for trips where we had to do long car rides. We listened to Nickel and Dimed on such a trip. It's not fiction though.