Returns Refund Determination (RRD)

You can use this process to make decisions regarding the amount of credit to be issued for returned material. Returns refund determination (RRD) is a financial process, providing a business-oriented approach to reconciliation. Refund decisions can be based on inspection results and the return reason, but can also include business considerations, such as company policy, competition, or workflow.

For more information about inspection results, see Inspection and Logistical Follow-Up (LFU).

In RRD, you can process:

Customer returns
Using the customer refund determination (CRD) process, you decide how much credit the customer is to receive and create a credit memo request.

Note
CRD is an optional process. If in the returns order, you select Immediately as the form of refund control, then you can create a credit memo straight away. You can also have the system create the credit memo automatically if you customize the returns order type accordingly.

End of the note.
Internal returns
Using the internal refund determination (IRD) process, you decide how much credit the supplying plant in a different company code is to receive and directly create an internal credit memo.

Note
IRD is an optional process. You can make IRD mandatory for certain combinations of return reason and inspection code in Customizing for Advanced Returns Management by choosing Supplier Returns Configure Refund Procedure for Intercompany Store Returns . IRD is always mandatory, however, if you split a delivery item on the Material Inspection in Warehouse screen in order to record different inspection results.

For all other scenarios, you can choose to use IRD or allow the system to create the credit memo automatically by means of collective processing for billing documents. For more information, see Billing Processing.

End of the note.

Prerequisites

A returns order in CRD or an inbound delivery in IRD is available.

For more information about creating returns orders, returns purchase orders (rPOs), and return stock transfer orders (rSTOs) for outbound and inbound deliveries, see Returns Document Creation.
You have made all the necessary settings in Customizing.

For more information, see Customizing for Advanced Returns Management.

Process

You select the appropriate documents for RRD.
Before you start, you need to decide whether to use:
- Customer refund determination (CRD)
  
  In CRD, you process refunds to customers. These returns may have been forwarded to another plant or vendor.
- Internal refund determination (IRD)
  
  In IRD, you process cross-company returns (returns stock transfers between plants in different company codes). These returns may have originally been returned from a customer, forwarded from another plant (intracompany or cross-company), and may also include returns to vendors.
The selection of returns orders (in CRD) or inbound deliveries (in IRD) can involve combinations of complex search criteria (see Selecting Documents for Refunding).
You create manual splits if necessary.
You can split the returned quantity to apply different refunds to the subquantities (see Creating Manual Splits).
You determine the refund for customer returns or internal returns (optional).
You determine the refund amounts based on the inspection results of an item or its split quantities and on financial considerations:
- For customer returns, use CRD (see Determining Customer Refunds).
- For internal returns, use IRD (see Determining Internal Refunds).
You create a credit memo request in CRD or a credit memo in IRD.

Depending on the settings in Customizing and user preferences, the system can create the credit memo request or credit memo automatically.

Alternatively, you can reject refunding, if you have authorization.

Result

The advanced returns process is completed when the items are fully paid.

For more information about document status in Advanced Returns Management, see Returns Overview.

Example

The following table describes returns scenarios in RRD:

Scenarios for CRD and IRD
Returns Type	Scenario Description
Customer returns in CRD	A number of customers are returning large quantities of incompatible electronic products. The inspection codes confirm the incompatibility. The CRD process is straightforward, but the selection of the returns orders is complex, involving specific ranges of a product series delivered to some customers. The returns manager responsible for CRD uses the Advanced Selection Criteria to find the combination of products and customers to automatically generate credit memo requests for the proposed refunds. A customer returns a damaged product. The warehouse manager, also responsible for CRD, creates a credit memo request for the full amount, instead of the suggested 50% because the customer is a premium customer. For more info
Supplier returns in IRD	A branch (considered as the supplying plant in IRD) returns a batch of damaged items to its distribution center (DC). The inspection at the DC (the receiving plant) confirms the damage. Based on the inspection code, the returns manager responsible for IRD decides to split the batch manually to refund only some of the items. A supplying plant returns an item with extensive transport damage to the receiving plant. Although the damage is total, the returns manager for IRD chooses to reduce the refund to 0% because the supplying plant is responsible for the transport.