What's the Difference Between a "Consignment" and a "Sale or Return"?(legal aspects of conditional sales)(Brief Article)

Business Credit, September, 2001 by Brinkman, Daren R.

Understanding the Legal Differences in Conditional Sales

A wholesaler of goods may, at times, wish to accomplish a conditional sale of its goods to a retailer. The retailer may wish to obtain certain levels of inventory that it could not otherwise finance, and the vendor may be able to obtain certain sales that it would not otherwise have by agreeing to take some level of the delay and risk associated with the resale of its goods. Sometimes, however, vendors can become confused or not even recognize the legal distinction between the two types of legal structures involved in a conditional sale: the consignment or the "sale or return."

Consignments

Perhaps the most familiar of these two legal forms is the transfer of goods by a vendor...