Exchange Accounting Options
Exchanges are integral to any return policy because they allow you to retain all or a portion of your return revenue and allow customers to seamlessly get the product they desire. Unfortunately, there is no perfect way to facilitate exchanges in every OMS. The challenges that can occur due to limitations, like in Shopify, are covered in the Accounting For Exchanges article, which we recommend reading first.
There is not a “one-size-fits-all” configuration due to different merchant data workflows, processes and preferences, but Pollen offers some primary offerings to help with exchange accounting, which are outlined in this article.
Exchange Order Configuration Options
Each merchant is unique in how they choose to account for exchanges and the systems they use. Pollen is flexible and can adjust how we create exchange orders depending on your needs. Pollen offers merchants the ability to configure:
What is the “Pollen Benefit”? Pollen unlocks the ability for an exchange order to be booked as a new sale. Pollen records a new exchange order by the amount of the customer’s credit of the exchange, less or even in price, with any upsell orders showing the net of two balances to reflect the amount paid equaling the total sum. (The sum of the original item returned plus the difference of the exchanged item that cost more.)
What merchants benefit from using the Pollen exchanges?
- Pollen assumes the risk of the item being returned.
- Fully documented chain of events reflected in Pollen as well as OMS.
- Consumers can get their new exchanged item before sending back their return.
- Merchants the ability reflect an additionally booked sale.
- Items that are returned are accounted for and reflected back in to inventory.
- Merchants that need full exchange order values to flow into a third party system
What merchants benefit from NOT using the Pollen Exchange?
- Merchants that want to assume risk and liability.
- Merchants that allow 3rd party providers to hold their consumer credit card and charge their consumer, on the merchants behalf, in the event an item is not returned from an exchange.
What options does Pollen offer for taxes on new exchange orders?
- Add tax for all items on the order (default)
- Add tax for only the outstanding balance of the order(upsell amount)
- Refund partial tax for only the outstanding difference amount owed for refund (price difference less)
How do I know which option is best for me?
The answers to these questions will help determine the best option:
How are taxes accounted for during an exchange? Pollen takes care of accurately reflecting taxes to be accounted for on the exchange order.
Reports can be found in the Pollen Admin or under the original order or new exchange order in your OMS and can pulled via CSV. Pollen also offers the ability to click the order ID or RMA with a direct link to your OMS.
Pollen properly groups orders when needed to refund correct amounts and keeps orders individual when there is no additional order needed to tie new order too. Merchants can apply the offset totals to the appropriate bucket within their OMS or whatever system preferred. Pollen accurately reports any discounts applied as well during the return/exchange process for straightforward bookkeeping.
Exchange more highlighted in Blue
Exchange less highlighted in Orange
As we’ve learned in Accounting For Exchanges and this article, there is no perfect solution for exchanges in Shopify and there is not a one-size-fits-all configuration, but Pollen has created these different options to help enable the best exchange accounting process for your needs.
If you’d like to check or change your current settings or have questions to determine the best settings for you, please reach out to firstname.lastname@example.org.
What time zone is Pollen reporting in? Adjustment reports reflect the time zone on the Shopify store but the rest of the reports are in GMT.
Can I over refund a customer? Using Pollen as the source of refunds for all returns and exchanges, no matter more, less, or even, you can’t over refund the customer.
Can I automate refunds? Pollen has multiple options to automate the refund process, including your ERP system.