Numerous PA authors are commenting that their royalty statements are showing returned books which, of course, reduces money owed by PA to their authors. Where are all of these returned books coming from?
During the past three or four years PA has offered their authors gimmick sales stunts, such as, "Buy nine of your books and we will send a free copy to Tom Hanks." Or any other celebrity that you can possible think of. When the free books reached their destination they were returned to Lightning Source International, en mass.
On June 1, 2005 PublishAmerica (PA) signed an Agreement with Lightning Source International (LSI) to provide exclusive POD services to PA. In other words, LSI became PA's sole printer and wholesaler. In the Agreement, paragraph C. Returns states in part, "... That books will be non-returnable if the client designates any title as returnable, returns will be made in accordance LSI's then current returns policy..." There were two other options and PA chose the second option which was "Yes-Destroy." That meant that ALL PA books sold through LSI were returnable.
Loads of PA books began to be returned to LSI and according to the Agreement LSI destroyed the books and billed PA for return fees. PA became concerned that there were so many returns that it was possible LSI was cheating them. So they exercised the third book returns option which required LSI to send a copy of each returned book to PA. And in accordance with the Agreement LSI began sending a copy of each returned book to PA, not the returned book, but a copy of it. They printed PA a new copy of the returned book and charged them $2.00 for the service. Of course, this was exactly what the Agreement specified. Loads of those free books were returned by Tom Hanks and all of the other famous people who had become an unwitting part of PA gimmick sales offers.
If PA had exercised a No Returns option then LSI would have notified every purchaser that PA books were not returnable. No one knows of any bookseller who will order books without a return policy.
In late 2009 LSI terminated the PA contract for PA's failure to pay money owed LSI. Since LSI was PA's exclusive wholesaler/printer PA no longer had a commercial printer and to this date they have not been able to contract with any other printer. Naturally, PA sued LSI but the case was settled without a known outcome. In the suit one can use PA's money demands to calculate that there were at least 4,000 books returned. These books being part a special sales offer were ordered by PA and sent by PA so they did not pay nor owe a royalty to the authors.
Since LSI terminated their Agreement with PA near the end of 2009 is it possible to order and receive a PA book from any book seller other than PA? So where are all of these returned books appearing on authors' statements coming from? Could they be the books returned to LSI that LSI charged PA for? Is PA trying to recoup some money from authors that they are not entitled to?
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