Objective
The objective of this article is to guide the team through the process of handling damage allowances and credits for products that have slight dings or dents, ensuring efficient communication with customers and manufacturers to offer appropriate discounts and process credits accurately.
Key Steps
Assess Damage Level
Determine severity of damage.
Check if the piece is functional and if the damage is visible.
Instruct the delivery team to gather information using the Pocket Scan app.
Understand Manufacturer Rules
Know the damage allowance policies of each manufacturer.
Consider offering 10-15% of the retail price as a maximum damage allowance.
Communicate with the manufacturer to determine the type of damage and allowable credit.
Offer Damage Allowance to Customer
Calculate and offer an appropriate damage allowance to the customer.
Use a miscellaneous line item named "Damage" on the sales order.
Add a note specifying the approved allowance for the damage.
Credit the customer based on their payment method.
Process Manufacturer Credit
Create an AR invoice to bill the manufacturer for the promised damage allowance.
Follow up with the manufacturer to ensure credit is received.
Receive credit as a check or as a credit to your account.
Apply Manufacturer Credit
Apply the credit received to the Accounts Payable if it comes as a credit to your account.
Ensure the credit is applied to the correct purchase group (manufacturer or buying group).
Cautionary Notes
Ensure accurate assessment of damage severity to offer appropriate allowances.
Communicate clearly with customers about the damage allowance process.
Keep track of manufacturer policies and guidelines for damage allowances.
Double-check calculations for damage allowances to avoid errors.
Tips for Efficiency
Utilize the Pocket Scan app for gathering information on damage.
Regularly review and process damage allowance credits owed at least once a month.
Maintain clear documentation of customer credits and manufacturer reimbursements.
Follow up promptly with manufacturers to ensure timely receipt of credits.