Angie asked the following question when she commented on my last blog entry:
What are reserves against returns?
I’ll try and answer the best that I can! Reserves against returns is when your publisher holds back (meaning they don’t pay you) a portion of your royalties until they’ve received a greater majority of the returns on your book. When a publisher receives returns, they deduct your royalty amount for each return against your amount earned.
For example, if you earned $500.00 in royalties, your publisher may decide to hold back $100.00 of this amount in reserve. As time goes on, maybe a year or so later, you might get $25.00 worth of returns – this $25.00 represents the amount in royalties you would have received if those books had sold. Once most of the returns are in, the publisher would then pay you the $100.00 minus the $25.00 in returns, netting $75.00 royalty check to you, the author.
I noticed from the link that I posted that the author did not receive a royalty check on her April 2009 statement. This happens when you receive your first one or two statements, you might not get a check, or you might get a small check. I sense that this author will receive a royalty check on her next statement, or the one after that.