Returns

Publishers ship far more books than will be sold to retailers. These books are either sold to consumers or returned to the publisher for credit. An author's royalty statement will for a time reflect a "Reserve for Returns" - a percentage of sales revenue being held back in anticipation of books being shipped back to the publisher. Over time, the reserves are liquidated to reflect actual returns. This number is used to calculate an author's sell-through percentage -- a tool used by publishers in determining whether to offer future contracts, the size of future advances, and other negotiating points.