Charging A Re-Stocking Fee On Credit Memos

Some companies may have a return policy which charges a re-stocking fee for returned goods. This help article covers the process of setting up the re-stocking fee and shows how this will work on Credit Memos.

The first step in setting this up is to create the Re-stocking Fee product in Acctivate. This should have an Item Type of “Other Charge”, which is a non-inventoried product. Check out this help article that shows how to set up an Other Charge product.

In the screenshot below, we can see an example of a Re-stocking Fee product. Notice that the Item Type is set to Other Charge, the Product Type and Product Class may be different from one company to another, but Other is a very common Product Type and Product Class. Also notice that no Cost Method is required for this product.

In the next screenshot, notice that a List Price is defined for this product. This will be the price that populates by default on a Credit Memo, though this can be changed manually. This product can also be set up to use different Product Prices just like any other product in Acctivate.

Once you have the Re-stocking Fee product setup in Acctivate, create the Credit Memo as you normally would, then add the Re-stocking Fee product as a line item on the Credit Memo. The quantity of the Re-stocking Fee could be set to mirror the number of items that are brought back into inventory, or the quantity could be set as 1 and the full amount of the fee could be set as the Price. It’s important that the Amount of the Re-stocking Fee line is positive as this is the value which will be taken away from what is credited back to the customer. This means that the Quantity of the Re-stocking Fee product will also need to be positive. Keep in mind, when any product is added to a Credit Memo, the quantity will default to a negative, so this will need to be changed before processing the Credit Memo.

In the screenshot below, notice that line 1, a P line, shows a negative Quantity of -220 at a Price of $110.00 Ea for a total Amount of $-24,200.00. The Re-stocking Fee (RSTK) is entered with a positive quantity of 220 (in this example, 1 fee is charged for each of the products that are being returned) at a Price of $10.00 Ea for a total Amount of $2,200.00. By adding the Re-stocking Fee to the Credit Memo, the amount owed to the Customer is reduced to $22,000.00 instead of the $24,200.00 which is the full value of the P line.

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Posted in Customer, Sales - Last modified on May 2, 2017Matt Allen
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