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What Does RMA Stand For?
A Return Merchandise Authorization or Return Material Authorization (RMA) is a transaction whereby the recipient of a product arranges to return defective goods to the supplier to have the product repaired or replaced or in order to receive a refund or credit for another product from the same retailer or corporation. In practice, an RMA is only issued after a series of tests.
The specifics vary between different retailers and industries, but in general the steps taken are similar. For this example we will use a hardware product:
▲Should the customer encounter a problem, they generally call a customer service phone number and get an "RMA number" or designation which is written on the bill of lading or other packaging. This is so that the supplier's own shipping and receiving department knows how to route the returned goods and is assured that the customer has talked to someone in customer service.
▲If there exists a defect in the product, the engineer on call will have to ascertain as to whether or not the hardware had suffered a CID (Customer Induced Damage). This is done to prevent the company from accepting losses on behalf of the supplier due to negligence from the retailer. The product then goes to the scanning vendor, who will try to repair the defect if it's a minor defect, and send it out again in another order that he gets. If both these tests fail, then the item is sent to the principal vendor for replacement, and the principal vendor will once again check whether there were any defects in the product or whether the product has been tampered with.
▲Finally, if all these tests fail and there is a confirmed production defect, the supplier replaces the material with another of the same (which is not defective), or he issues a credit note to the customer or retailer which may be exchanged for cash or another product, depending on individual store policy.
Generally, this is done with new goods that have been received DOA ("dead on arrival") or when they have become defective while still under warranty.
In some cases the retailer sends RMA forms and packing labels, sometimes even prearranged packaging for the return shipment. The labels may provide for the retailer to pay the shipping charges, e.g., by freepost.
Often, the term RMA is used by customers (usually as a verb) to refer to the physical act of shipping a defective product back to the vendor, ie. "I'll have to RMA that new system ASAP because it was DOA."