Return Policy Update

This practice covers the return of surplus inventory and ordered-in-error material. Good inventory management practices coupled with the Seco discount structure which is independent of order size, should help minimize surplus inventory. Nevertheless, Seco recognizes that surpluses may build from time to time. Ordered-in-error is generally defined to mean any Distributor or end-user error resulting in the purchase of an incorrect product or quantity of product. Seco will accept returns for the above reasons on a monthly basis under the following procedures and conditions:

Procedures:

• The Distributor must submit a list of material by using either the on line RMA Request or by sending a request to customer Service. The preferred method is that the request be completed and transmitted on-line. Whether submitting a RMA Request on-line or via email, phone or fax, all return requests must be preapproved by Customer Service.
• Customer Service will provide the Distributor with a return Material (RM) number, label, packing list and return material listing.
• The return must have the pre-printed label clearly affixed to the return package, include the completed pre-printed packing list and is subject to inspection prior to issuance of credit.
• The Distributor will be advised of any non-conforming material.
• A final credit will be issued by Credit & Claims, within 30 days of receipt of material.

• The frequency of returns is at the discretion of the distributor
• A handling fee of $25 will be charged for each return that has been submitted electronically through Seco’s website. A handling fee of $75 will be charged for each return request submitted by telephone, fax, or email.
• Total value of all returns is limited to 5% of the previous 12 months purchases. Seco will consider specific, unusual returns for exclusion from the 5% cap at the written request of the Distributor. Acceptance of returns excluded from the 5% cap are at the sole discretion of Seco.
• Returns must be received at Seco within 30 days of the issuance of the RM number. After 30 days the RM number is no longer valid and a new request must be submitted.
• Products must be purchased within the previous 24 months from the date of return.
• Material must be current stock standards (“S” or “E” status), new and unused, in original package quantity with the package seal unbroken, and in resalable condition.
• Quick response items with a “C” stock status are not returnable (see section 1.4).
• A 10% repackaging charge will be applied, on a per item basis, for any item requiring repackaging.
• Monthly returns are credited at an average price of all invoices and credits issued for the item within the past 24 months.
• Material must be sent back freight pre-paid.
• Material must be securely packaged for transit. Damage by the carrier is the responsibility of the Distributor.
• No over shipments of pre-approved quantities are permitted. Under-shipments from approved quantities are permitted. Any quantity in excess of pre-approved quantities must be held for the next return.
• Any non-conforming material or not meeting the return conditions will be returned to the distributor.
• No advance deductions are allowed. A credit memo must be issued to the Distributor from Credits & Collections before taking a deduction.
• Any unauthorized deduction or unresolved dispute will result in the loss of the 3% Prompt Pay component of the Business Practices discount. All outstanding issues must be resolved within 30 days from issuance of credit.

Returns in this category include: Seco shipping errors and QC returns. Outgoing product returns are covered under section 1.3.

• The Distributor must submit, in writing, a list of material for return to Customer Service using Request for Quality Return Form QCF-70. Customer Service must pre approve all returns.
• Customer Service will provide the Distributor a Return Material (RM) number, label, packing list and return material listing.
• The return must have the pre-printed label clearly affixed to the return package and include the completed pre-printed packing list and is subject to inspection prior to issuance of credit.
• No advance deductions are allowed. A credit memo must be issued to the Distributor from Credits & Collections before taking a deduction.
• Standard items sent back on a QC claim will be fully credited if the claim is justified. No replacement order will be automatically started by Seco. The distributor is responsible for sending a new PO for replacement tools if needed.
• Special items sent back on a QC claim will either be repaired or remade (if the claim is justified). The repaired / remade tools will be sent back on the original customer PO at no charge.
• A final credit will be issued by Credit & Collections, within 30 days of receipt of material.
• Shipping errors and quality returns are not subject to 5% annual cap.
• Seco will allow a $5.00 transportation credit for shipping errors and quality returns.

Seco recognizes the need for new Distributors to put in an initial inventory of products to support a Distributor start-up. Seco encourages new Distributors to consult the local Technical Specialist or Application Engineer to help define the requirements of the local market and build its initial inventory based on those needs. Nevertheless, selection of this inventory is speculative and may result in surplus or dormant stock.

Distributors are encouraged to keep these initial inventory purchases low and build inventories as demand and experience develop. However, a single initial stock order will be accepted with the approval of the Regional Manager. Any product purchased on this initial order may be returned at any time up to 6 months from the date of invoice. This one-time return will not count against the monthly return limit, nor will a handling charge apply. The return must be pre-approved and an RM number obtained.