overstockl - procedures change Overstock.com GAAP gross...

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New streamlined return process results in change in revenue recognition Overstock.com has changed its customer service and return policies and procedures to improve the shopping experience for customers. As a result, the way Overstock.com records revenue on some of its sales will change in the third quarter and thereafter. As of July 1, 2003, the majority of customer returns will be handled through the Company's Salt Lake City warehouse, regardless of whether they were originally shipped by Overstock.com or shipped by an Overstock.com fulfillment partner. In addition, returned products that Overstock.com resells will be shipped to consumers from the Company's warehouse in Utah. As a result of this change, starting with its third quarter 2003 results, Overstock.com will record revenues generated from the Company's fulfillment partners on a gross basis instead of on a net basis as was previously the case. (Prior to the customer service and return policies and
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Unformatted text preview: procedures change, Overstock.com GAAP gross sales included only the commission portion earned on products shipped by fulfillment partners.) "We have always been committed to delivering a seamless customer experience, and I believe this change is good for Overstock.com's customers because it enables us to exercise comprehensive oversight of the entire consumer experience," said Byrne. "This change in operating procedures is causing us to switch our accounting from net treatment to gross treatment on products that are drop-shipped on our behalf. Therefore, we anticipate third- quarter GAAP revenues will increase dramatically. I emphasize, however, that this does not change the underlying economics of our business one iota, though it may help investors better understand those economics."...
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