It’s something publishers complain about often in private: their suspicions that some booksellers, particularly the big ones, use returns to manage their cash flow — that is, that when money’s tight, they’ll get rid of stock by returning it for a credit on the publisher’s account to buy more books … and thus keep “buying” books for no more money up front. Many publishers have even darker suspicions about what would seem to be the solution to the problem: “non-returnable” deals, which some big retailers are willing to do. However the suspicion is that some of those retailers secretly violate agreements to buy books as non-returnable by re-routing them as returns through wholesale suppliers such as Baker & Taylor or Ingrams (who do not do non-returnable deals with publishers). The wholesalers then credit these returns to the retailer (i.e., give them money or credit for them), and return them to the publisher, who then has to pay the wholesalers for the returns.

It can be a devastating tactic — orders for the big retailers can be in the thousands, meaning the returns also represent the loss of a huge amount of production money. That’s one reason many pubishers, including most of the giant conglmerate publishers, won’t do “non-returnable” deals. Meanwhile the tactic has put more than a few small, trusting publishers out of business.

It’s always dangerous for publishers to complain about these tactics in public, but now one little indie has had enough. As Jim Milliot reports in this Publishers Weekly story, Jasmine-Jade Enterprises, a publisher of what they call on their website “romantica,” has filed a $1 million civil suit against Borders and Baker & Taylor, charging them with breach of contract and fraud for violating a non-returnable deal. Jasmine vice president Susan Edwards says the two companies “conspired” to defraud her company via “tens of thousands” of returns. Spokespeople from Borders and B&T had no comment.