Say my publisher sells 100 of my books for $10, and I get $1 for each book sold. To make this even simpler, assume I have already earned back by advance. So that means I get $100, right?
Not really. First, royalty checks come months after a given period of sales. Like sales from July-December might result in a check next March.
But even then, I don’t get $100. I get maybe $60, at least to start. The rest is held as a “reserve against returns.” Because books are returnable. Just because the bookstores ordered 100 copies doesn’t mean that they sold 100 copies to customers. They could have ordered them, not sold them, and be, at this very moment, boxing them up and planning on returning them for credit.
This stems from the Depression, when bookstores were reluctant to stock books that might not sell. The last I heard, about 20% of all hardcovers are returned, and up to 50% of all paperbacks. (Anyone got better numbers?)
As time goes on, the publisher assumes fewer and fewer books will be returned, until finally, years later, you have all of your $100.
Now Hachette UK has announced that it will no longer accept returns on backlist books. While this is being pitched as some kind of “green” move, I’m sure it’s just one step in eliminating returns. It’s probably time, at least for backlist. At the same time, I wonder if it will stop publishers, once they have all adopted this practice, from still holding reserves against returns.