In 2008, the handling of returned T

In 2008, the handling of returned TV sets cost PCL an average of US$6 million, equaling about 5% of its annual TV sales. The costs covered freight from the dealer to PCL's warehouse, repair and refurbishment costs at the factory workshop. While PCL spent a hefty sum each year servicing returned goods, about 37% of the returned goods were no-fault-found (“NFF") returns, translating to a loss of US$2.2 million for PCL. NFF returns also included demo sets and slow-moving goods that were not supposed to be returned [see Exhibit 2].