Pre-Negotiate to reduce pain.

In my experience, it’s the work done prior to RGAs that make them go smoothly. I encourage lighting showrooms to pre-negotiate RGA handling with vendors.

Some things to negotiate for:

FIELD DESTROY: Ask that any item less than $1,000 is an automatic field-destroy. Agree to take and store a photo of the item prior to the destroy.

On items of $1,000 or more, agree to retrieve and keep the item in a bin for three months. If the local rep wants to come and inspect or send it back, great! Otherwise, after three months you are authorized to field destroy.

REGULAR PO’s + AUTOMATIC CREDIT: Negotiate ahead of time to send in a regular PO for RGA’s and that your A/P department can automatically have a credit applied when the bill arrives. This seems to speed up RGA processing and gets replacement items to you faster.

Create a PO template in your system that alerts the A/P department of a PO that is actually an RGA. It should automatically trigger them to create and apply a credit for the PO.

Get all this approved in writing. In a few cases a phone call is needed to remind of the written RGA terms, but after a few cycles that gets rare.

RGA CREDIT ALLOWANCE: For vendors you know well, consider asking for a flat 2% to 3% discount off all invoices to cover RGA’s. Then just order all RGA replacements on a regular (paid) PO. Field-destroy all defectives.

In most cases, you can negotiate a “ceiling” so that high-dollar items (more than $2500 for example) don’t apply and are handled as regular RGA’s.

Final Note: Some vendors don’t negotiate RGA policies. Try to avoid those as much as possible. It’s too much of a distraction to fight RGA’s all day. I find most vendors are willing to negotiate an RGA protocol as long as you’re trying to be fair to them too.