We presell your books into the marketplace and we are paid for those sales (90+ days later, which means in many cases we are covering expenses for expected monies from Simon & Schuster to pay on time). At the same time, we are receiving as many or more returns as sales every month, which we have to pay back. We receive checks for the entire list from Simon & Schuster. It’s not a book-by-book accounting system. This means that although we’ve been paid (or are expecting payment soon) for the entire amount reflected on your statement, we are on a constantly “revolving door” basis with Simon & Schuster, paying back as much as we’re getting month-to-month. Some authors have expressed concerns that we are sitting on your money, or using your money to float company expenses while we hold your returns. This is not the case, and Simon & Schuster’s accounting and payment process doesn’t work this way. We consider all sales “soft” sales until we have a better handle on your returns. We view our returns as a whole, not book by book, author by author. It takes a full year for us to have an accurate gauge on sales. We let go of reserves against returns after three quarters, which is the point at which we stop anticipating the highest level of returns from retailers.

Please watch Brooke’s video about returns for more information:
Understanding (and Getting Mentally Ahead of) Returns from Retailers

And read her Substack post: Things That Make Authors Cry