NetSuite Driven Returns Flow Design Considerations

This article is relevant if you are designing a NetSuite Product Returns program.


During a well run NetSuite implementation, the primary challenge is to model the database to produce a smooth running application that provides insightful information. The subsequent challenge is to outline the returns flows.

NetSuite’s product returns functionality is basic — the record structures offered can be shaped¬†according to requirements. In most cases, we spend time with our clients helping them discuss their policies so we can properly model the transaction record sets.

Often times, I can help clients think about their returns policies more fully by showing them some patterns we have developed for other clients. This will often accelerate conversations as we can begin to distinguish different returns processing flow elements and the produced relationships between them.

General NetSuite Return Flow Patterns

The key to understanding NetSuite returns flows is that there are two major record structure sets depending on the direction inventory is moving. See related diagram.

  1. Sales Orders & Item Fulfillments: Inventory is moving away from you.
  2. Return Authorizations & Item Receipts: Inventory is moving toward you.

The better your forward-sales and inventory logistics are modeled, the easier it will be to leverage this in your returns processing.  Once you get clear the record structures NetSuite offers, I typically witness two major returns patterns:

  1. Refunds: We are going to take back stock and offer something financial to the customer.
  2. Replacements: We are going to take back stock and we will offer a replacement or an exchange for a different good.

Return Policy Considerations

These major return patterns then can drive the setup which requires us to develop policies. Consider the following questions:

  1. Returns Scope: do you offer returns based on product type and the time elapsed since the original order?
  2. Return Location: where do you want returns to land?  NetSuite may want to return them to the original sales order fulfillment location.
  3. Returns Value: what value do you want to apply to the returned good?
  4. Credit Authorization: must you first take stock of the item before you offer financial renumeration?
  5. Credit Disposition: will you offer cash refunds for credits on file?  If so, how are these approved and distributed?
  6. Replacement Element: what items can be replaced? If we need to substitute items, how do we know which item qualifies? Does that become an Exchange?
  7. Exchanges: what elements can be exchanged for other items? Does the financial dimension control the range of what will be allowed?  How do we collect more funds from customers?
  8. Receipt of Returned Good: must you wait for a receipt of good before you ship out a replacement or exchange? What credit risk are you willing to accept to ship replacements before the returns authorization item receipt?
  9. Discounting: do you produce discounts in some manner to affect the financial impacts?  How are these setup and applied?
  10. Financial Element: are you going to offer credits that can be applied to replacement or exchanges?  What if there are differences in values?

These questions generally will produce a quality management discussion and should involve multiple departments as each may have different concerns to address.

NetSuite Returns Optimizations

Once the policies become clarified, these can help drive the system requirements. Typically, we see the following helper attributes which help drive automation:

  1. Order Type: Most sales orders are “regular” or “normal”; however, the organization can distinguish orders by replacements or samples.¬† ¬†See related image.
  2. Return Types: As suggested earlier, there may be a refund or a replacement. Replacements allow us to link a Return Authorization to a Sales Order.  Click related image below.
  3. Return Reasons: we can distinguish the different reasons we have returns. These reasons can help us gather information about our sales processes and product quality to help improve operations.  Click related image below.

Since the assumption is that we are starting from a Sales Order to accept a return (this is not always true), we can initialize a Return Authorization record with all the original sales information.  Once we understand the return type and reason, we can automatically assist in the automatic generation of related records which will ease Customer Service processing:

  1. Linked Sales Order: if an exchange or replacement, we can setup a linked sales order with the proper items and pricing policy.
  2. Order Release: leveraging tools like our Record State Manager, we can release the sales order for shipment once we have item receipt on the return authorization.
  3. Credit Memos Applied to Invoices: In flows that coordinate an exchange or replacement, we can have the Return Authorization Credit Memo automatically be applied to the Sales Order Invoice.
  4. Return Authorization Instructions: leveraging tools like our Content Renderer Engine, we can create a set of branded customer instructions to help them understand our policies and what to expect of the process.

Thus we use NetSuite custom records, scripts and workflows to have everything work in concert.

NetSuite Customer Service Systems Integration

As much as I love the NetSuite platform for the scope of what it can do, many clients are using other systems to produce customer support. Zendesk and Salesforce are common ones we hear about. Nonetheless, the questions above are all relevant. We now have more to work to understand the system integration requirements to have the process work seamlessly. Many times, we invent the model and the software to move information between systems to keep all actors in the know (topics for future articles).

Designing NetSuite Driven Returns

My hope is that this article helps you center yourself in this NetSuite driven returns logistics flow. In all cases, the better you plan your returns operations, the easier it is to build the supporting information management structures. NetSuite as a platform is ideal because it offers up general record structures and the rest is up to your imagination and commitment.  Take your time and plan your investment and you can have a seamless workflow.

If you assess you would like leadership to help you optimize your NetSuite returns practice, let’s have a conversation.

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Marty Zigman

Holding all three official certifications, Marty is Southern California's NetSuite expert and leads a team of senior professionals at Prolecto Resources, Inc. He is a former Deloitte & Touche CPA and has held CTO roles. For over 25 years, Marty has produced leadership in ERP, CRM and eCommerce business systems. Contact Marty to set up a conversation.

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