Many Unhappy Returns

October 1996
by Ivan Hoffman, B.A., J.D

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Ivan HoffmanIvan Hoffman (photo right) is a publishing, copyright, Internet law, recording, and music attorney as well as a published writer and author. He practices in the Los Angeles area. You may reach him at or 818/342-1762.

It frequently seems that book publishers are not in the business of selling books. Rather, it often appears that they are in the business of consigning books. Although the paperwork may be marked “INVOICE,” the reality is that some or indeed all of the books represented by that piece of paper have a way of coming back to the publisher at the most inconvenient of times. An”inconvenient” time, by the way, is any time. Living in dread of the United Parcel Service can make the business of publishing a nightmare.

Different sorts of books have different shelf lives and may find their way back to a publisher in varying lengths of time. Hardback books in the chain stores may sit on the shelves for upwards of a year while paperbacks may last only a few months. Or visa versa. Go to any supermarket and look at the mass market titles and you may find that they last only a few weeks at best before
they get packed back up. Only melons rot faster!

The “Reserve Against Returns” Clause

In order to protect themselves as best they can, publishers have clauses in their agreements with authors that allow those publishers not only to deduct”actual returns” but to set up and maintain a rolling “reserve against anticipated and future returns.” The same sort of clause exists in agreements between smaller publishers and subdistributors, with similar consequences,
but I will focus on the author/publisher agreement for the sake of clarity.

The clause usually reads something like:…IBPA Members – Click here to view the full article (login required).

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