Purchase Return means a return of goods from the buyer to the seller for a cash refund if the purchase was for cash or credit. It happens when a purchaser may be dissatisfied with the merchandise received because the goods are damaged or defective, of inferior quality, or do not meet the purchaser’s specifications.
For example, Sam's Shop sells electric scooters as well as mobile accessories.
Sam carefully inspects each shipment of products that arrive from his suppliers as he knows they don't always deliver his orders accurately.
They sometimes ship the incorrect products, and other times the products are faulty or damaged. Whenever this occurs, Sam has the option to return the defective product to the supplier. This is called a purchase return.
A business may reject delivered products and start the purchase return procedure. This could happen for some reasons, including the ones listed below:
- Due to the following circumstances, the goods received are considered unacceptable - defects and/or damages, mismatches in the types, the difference in quantity or quality, or other disagreements.
- Modifications in the company's sales or manufacturing requirements in the future.
Use of this Term in Sentences
- A purchase return occurs when a buyer returns something purchased from a supplier.
- Frequent purchase returns can have a negative impact on a company's profitability, therefore, these must be monitored regularly.