The most expensive sentence in a bag program is not a price. It is six words buried on page four: *returns subject to vendor agreement*.
Left undefined, those words mean the vendor agrees to whatever the retailer decides — three months later, with the goods already on a truck and a deduction already on the invoice.
RTV, return to vendor, is the process that decides who pays when product comes back. Defined before the first container, it is a routine operation. Defined after, it is a negotiation you cannot win.
RTV is not consumer returns
The distinction matters because it changes who is at fault.
Consumer returns happen after a customer sends a bag back to the brand: sizing, color, second thoughts. That is a demand-side event, handled with grading, refurbishment and resale.
RTV happens when a retailer sends stock back up the supply chain: overstock at the end of a season, packaging damage found in a distribution center, discontinued colorways, or a quality issue on a specific carton range. That is a supply-side event, governed by contract terms, authorization documents, and financial settlement.
Confusing the two is how factories end up financing a retailer’s seasonal planning error.
Four numbers to agree before production
An RTV clause is only as strong as its numbers. Four of them do the heavy lifting:
| Term | What to negotiate | Why it matters |
|---|---|---|
| Window | 30, 60 or 90 days from receipt; excluded after final sale | Longer windows push seasonal risk onto the supplier |
| Cap | RTV allowance capped at 2–3% of PO value | Uncapped RTV is an open-ended liability |
| Freight and duty | Who pays the return leg; duty drawback eligibility | Return freight plus duty can exceed the product value |
| Disposition | Resell, refurbish, scrap, donate — and who holds title | Determines whether the supplier or the retailer books the loss |
Add a fifth line that is rarely written and always useful: a notice period. Fourteen days’ written notice before any return ships, with a value threshold above which written approval is required.
Documentation decides the dispute
When an RTV shipment arrives, the file decides the outcome. Four documents carry the weight:
- RTV authorization. A numbered approval issued before goods move, listing SKUs, quantities, reason codes and the return destination. No authorization, no acceptance.
- Carton-level photo evidence. One photo of the condition, one of the label. A claim without a photographed label is a claim about a mystery box.
- Defect coding aligned to AQL. Same code set used at pre-shipment inspection, so a “packaging defect” means the same thing on both sides of the ocean.
- Credit note, not invoice deduction. A credit note is a settlement you can date and audit. A deduction is cash that left your account without a signature. In the clause, state that RTV settlement is by credit note against the following order.
Returns shipped back to Asia rarely make sense
Freight, duty and re-import documentation on soft goods usually exceed the recovery value. Before goods travel 12,000 kilometers, run the economic test: if landed return cost exceeds 40% of the item’s resale value, the better disposition is a local liquidation partner, an outlet channel, or donation with documentation.
The supplier’s job is to give the buyer the data to make that call — carton quantities, SKU values, condition grading and a cost per disposition option. A factory that provides that analysis is worth more than a factory that simply accepts whatever comes back.
Put it in writing while everyone is friendly
RTV terms get negotiated once, in the honeymoon phase, and referenced for years. Sign them when the relationship is easy — that is exactly when clarity costs nothing. Expect to extend the same discipline to your own customers: a clear return policy is a sales asset, not a legal chore.
SimiBag supports custom backpack and vacuum storage programs with documented packing, carton-level inspection records and RTV files that match the codes your retail partners use. Ask for our retail program checklist with your next quotation. Start at simibag.com.
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