Return journey

First, the fundamentals of the publisher-trade relationship in India. Four factors define the terms of trade: prices, discounts, credit terms and ‘returns’. The first three apply to the retail trade for any commodity; the last is unique to the book trade, here and elsewhere, and is as important a consideration as discounts and credits for the bookseller. In fact, for most other commodities, ‘goods once bought cannot be returned’; for the book trade it is just the opposite, ‘gone today, here tomorrow’.

What are returns? Why are returns today so ubiquitous and running at higher levels than ever before despite massive discounts and extended credit terms? How do returns impact on publishers and buyers, and can the publishing world do without them? Of the three interested parties — publishers, booksellers and authors — who benefits from this arrangement?

As the term implies, ‘returns’ are the facilities provided to booksellers to return unsold stock after a reasonable period, which is usually 60 to 90 days but in practice is extended by mutual agreement. Publishers provide for these contingencies by reserving a proportion of each book’s print run to be given away free to literary editors and reviewers, while another slab, having been given away to booksellers, can be returned unsold. Publishers estimate about 15 per cent returns/free copies for hardback and 25 per cent returns/frees for paperbacks. There can be wide variation in returns/frees, but the point here is that returns are built in the costing of each book. Till the mid-1980s, returns were a special facility provided to special customers, but now it is taken as applicable to all.

From the bookseller’s point of view this arrangement works out fine; he gets an extended period of credit with no risks whatsoever. Booksellers say that with high fixed costs in wages and rent, which falling prices make ever harder to meet, they simply can’t afford to take any more risks with non-bestsellers. Besides, they say that they provide a service by displaying books that would otherwise just be lying around in publishers’ warehouses.

But the practice is open to abuse. Publishers complain that booksellers are returning copies and then reordering them in order to extend their credit periods, a practice that is becoming more common now that finance is no longer easily available from banks. In practice, credit terms can always be extended to 180 days, which has become a marked feature for an ever-widening range of new titles. As a result, many mid-list titles are simply not ordered or they are bought against firm orders. And this is not all.

Some authors these days have taken self-promotion to a new height, but there was a recent case of an author who had bought 20,000 copies of his own book, got into the New York Times bestseller list for eight weeks, then returned 17,000 copies when his job was done. And thanks to the generous returns policy, got his money back. This may be a one-off case but the danger of getting conned is always there.

But the question is how do returns affect the publisher and the author? And can it be avoided?

For the publisher, returns are a nightmare. First, it is simply impossible to monitor sales ex-bookshop: in India we don’t have the field staff to go around bookshops checking unsold physical stock against the quantity ordered. Second, accounting for the number of copies sold, which is the basis for the royalties to be paid to the author, becomes impossible when you know that most have sent to bookshops on a sale-and-return basis.

Can returns be avoided? Not any more because returns are part of the whole sales package. Besides, publishers desperately looking for sales will go that extra mile to place their book in stores in these difficult days.