There’s an obvious answer: of course they are. Like many simple answers, this one is wrong. Or at least it’s incomplete.
We all know that the current system was invented to allow bookstores to order current stock during the Great Depression. It lived on later both because it’s hard to reverse a system like this one, and because publishers benefitted from it as much as bookstores do.
How do publishers benefit from the returns system?
It’s easier to get booksellers to take a chance on innovative books. After all, their risk is much reduced. Many people in our business bemoan the lack of variety and quality in trade books. The return system gives a break to those new and risky books that do get onto someone’s list.
Net sales increase. Very few readers will special order a book that isn’t on the shelf when and if they look for it. If your book isn’t there when the customer comes, that’s a lost sale. With the returns system, bookstores order more copies, and your book has a better chance of being available for purchase.
Net profits increase under the current system, for most publishers. If you have the right balance between increased sales, and increased returns, you can make more profit. Of course, you can go too far in this direction. You need to find the point where the margin you’ll make from the next extra sale will exactly balance the cost of the extra returns necessary to make that extra sale.
Returns give you information that isn’t always easy to get any other way. Until recently, it wasn’t possible to know how many of your books were being sold to end readers. (Thank you, Bookscan, for changing that!) The only way you knew a book hadn’t walked out the store’s door was a return.
It’s still not possible to find out if books have been unpacked and shelved, or not, until you look at the boxes that return. And you won’t know if readers pick the book off the shelf and then put it back (meaning that the spine or front worked, and the copy didn’t), until you look at the condition of the returns. There’s at least some value to that information.
This system distributes rewards and penalties fairly. A book that sells through well, and a publisher that consistently brings out such books, will bear a lower cost. If we had no returns system, and simply gave larger discounts, those discounts would be applied across the board. Returns are more accurate in assigning costs.
Last, but not least, publishers are going to bear the cost anyway. Chains have much more power in today’s book business than the publishers do. So the cost of the books that don’t sell will hit publishers in either the form of returns or of higher discounts. In the current regime, at least we get the books back.
This isn’t the prevailing view, I know. I eagerly await your comments and arguments!