Not every customer is satisfied with the product they purchase. The old saying of ‘You can’t please everyone all the time’ is true. This is reality and business management must accept this basic principle. What is important is the trend involved with returns. If they continue to increase from one period to the next, something is amiss.
There are several definitions for the term ‘allowances’. In payroll, allowances are the amount of adjustments to an employees paycheck to determine the final federal income tax to withhold from each paycheck. An employee prepares a Form W-4 to determine the number of allowances in calculating the withholding amount. An allowance is similar to the number of dependents in your household. Single equals one, married equals two and add one for each child you care for in your household. With sales, allowances refer to the amounts granted to a customer to solidify the sale or eliminate a return.