What Is an RMA (Return Material Authorization)?

Some manufacturers expand RMA as return merchandise authorization. Synology's product warranty, for example, describes replacement products provided "through return merchandise authorization (RMA) procedure." Both names describe the same approved, numbered return.

Oracle NetSuite's help documentation shows how one ERP handles it, step by step. First, when a customer wants to return an item, you issue a return authorization showing the item to be returned and the amount to be credited to the customer upon receipt of the item. Each return authorization gets a unique return number that enables you to track it. NetSuite calls the form a return materials authorization (RMA) and describes it as a record of expected customer returns.

When the shipment arrives, NetSuite says to match it to the corresponding return authorization number and enter a receipt for the items. In NetSuite, the receiver can then restock each item, which returns it to inventory, or write it off as an expense.

Microsoft's Dynamics 365 Supply Chain Management, which calls it a Return Material Authorization, registers each RMA as a return order and records:

• Customer account and the delivery address the items are returned to
• Site or warehouse that receives the returned product
• RMA number, the ID assigned to the return order and used throughout the process
• Deadline, the last date an item can be returned
• Return reason code, the customer's reason for the return
• Return lines, which can reference the invoiced sales order line so the item is valued at the same unit cost it was sold at, and so the return can't exceed the quantity sold on the invoice

Dynamics 365 Supply Chain Management has two types of return order process: a physical return, which authorizes the physical return of products, and credit only, which authorizes a customer credit without requiring the products to come back. After inspection, a disposition code decides the outcome for each line:

• Credit: the item is returned and added back into inventory, and the customer is credited.
• Replace and credit or replace and scrap: a separate replacement sales order is created.
• Return to customer: the item goes back to the customer after inspection, for example if the warranty is voided.
• Scrap: the customer is credited, and the loss from scrapping the item is posted to the ledger.

A distributor sold a plumbing contractor 50 valves at $40 each. The contractor reports 5 as defective, and the distributor issues RMA 3391 for 5 valves with a 30-day deadline.

The box arrives quoting RMA 3391. Inspection finds 4 valves defective and 1 working. The 4 defective valves are scrapped and credited: 4 x $40 = $160, issued as a credit memo against the contractor's account. The working valve is sent back to the contractor with no credit.

Shopify handles the same job with returns. From the Orders page you can create a return, send shipping instructions, and issue refunds after inspecting the returned items. With self-serve returns turned on, customers submit return requests from their order status page, and you approve or decline each request based on your policies.

• B2B returns. Return rules apply to all orders, including orders from Shopify B2B. B2B customers and staff members for company locations can submit return requests, and you can't apply separate return rules to specific order types.
• Return window. 14, 30 or 90 days, unlimited, or a custom number of days, starting from each item's delivery or from delivery of the last item in the order.
• Return shipping and restocking. Offer free return shipping, charge a flat return shipping fee, or have customers buy their own label, and optionally charge a restocking fee as a percentage of the return.
• Final sale items. Products or collections you choose can't be returned at all.

For auto parts sellers, Uncap Garage is fitment that prevents the return before it happens. It puts Year-Make-Model fitment on your storefront, powered by ACES and PIES data, so buyers see only the parts that fit their vehicle, and the wrong part doesn't make it into the cart in the first place.

• Credit memo
• Sales order
• Fitment
• Backorder
• Order to cash

• Oracle NetSuite Help: Customer Returns Process
• Microsoft Learn: Sales returns (Dynamics 365 Supply Chain Management)
• Shopify Help Center: Setting up return and cancellation rules
• Synology: Limited Product Warranty