Return to Vendor (RTV)

Return to vendor, or RTV, is the process where a retailer sends product back to you, the brand, for credit, replacement, or a refund. It covers defective and damaged goods, wrong or expired items, recalls, and, crucially for a new brand, unsold overstock. RTV is one of the ways the risk of a retail deal shifts back onto you, so the terms matter as much as the wholesale price.

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Why it matters to your brand

A generous RTV policy is great for the retailer and dangerous for you. If a store can send back everything that does not sell, you carry the full risk of slow inventory. That unsold product comes back to you, often after the season when it is hard to resell, and the credit comes straight out of your margin. RTV behaves like the other retail deductions that can turn a healthy-looking wholesale deal into a losing one.

The terms to negotiate

Before you sign, get the RTV terms in writing:

• What can be returned. Defective and damaged, yes. Whether unsold product can be returned is the big one to pin down.
• The return window. How long after delivery a retailer can send product back.
• Freight responsibility. Who pays to ship the returns, you or the retailer.
• Restocking fees. Whether a fee applies to returns.
• Credit, replacement, or refund. What form the RTV takes.

The safest version for a new brand limits RTV to genuinely defective or damaged goods, not unsold inventory. If a retailer insists on returning unsold stock, that is closer to consignment, and you should price and plan for it accordingly.

Frequently Asked Questions

What does return to vendor (RTV) mean?

Return to vendor is a retail process where a store sends products back to the original brand or supplier for credit, replacement, or refund. It applies to defective, damaged, wrong, expired, or recalled goods, and sometimes to unsold overstock, depending on the vendor agreement.

Why does RTV matter to a small brand?

Because it shifts inventory risk back to you. If a retailer can return unsold product, you carry the cost of anything that does not sell, and the credit comes out of your margin. Returns often arrive after the selling season, when the product is hard to resell, which is why limiting RTV to defective goods protects a new brand.

What is the difference between RTV and consignment?

With RTV, the retailer buys and owns the inventory but can return certain goods under agreed terms. With consignment, the retailer never buys the inventory at all and only pays for what sells, returning the rest. A broad RTV policy that includes unsold stock starts to resemble consignment, so treat it that way when you price the deal.

Sources

• Speed Commerce, “What Is Return-to-Vendor (RTV)?”. Definition and the RTV process for defective and returned goods.
• The Agile Brand Guide, “Return to Vendor (RTV)”. Vendor agreement terms, return windows, freight, and reason codes.