How does RTV affect your business costs?
RTV processes impact both operational expenses and recovered value. Key cost factors include:
- Labor costs for inspection, documentation, and packaging
- Transportation fees that often lack forward-shipping economies of scale
- Storage space freed by removing non-performing inventory
- Cash flow timing while waiting for vendor credits or replacements
Efficient RTV management typically recovers 40-60% of product value through credits or replacements.
When should you initiate RTV?
Trigger RTV processes for:
- Damaged goods discovered upon receipt
- Manufacturing defects found during quality checks
- Products approaching expiration dates
- Seasonal merchandise after peak selling periods
- Vendor-recalled items for safety issues
- Overstock exceeding agreed inventory levels
Most vendor agreements specify 30-180 day return windows. Missing these deadlines means losing recovery value.
What are the RTV process steps?
- Identify and segregate products by return reason
- Obtain RMA numbers from vendor systems
- Document items with SKUs, quantities, and conditions
- Package properly per vendor requirements
- Arrange shipping with appropriate insurance
- Update inventory systems to reflect outgoing products
- Track credits until financial reconciliation completes
Why does RTV management matter?
Effective RTV processes protect profit margins by recovering value from unsaleable inventory. Benefits include:
- Improved cash flow through vendor credits
- Optimized warehouse space by removing dead stock
- Stronger vendor relationships via compliant returns
- Regulatory compliance for expired or recalled products
- Sustainability support through proper recycling channels
Poor RTV management can result in 100% loss on defective inventory, while best-in-class operations recover up to 80% of value.
