HarperCollins recently announced a new publishing imprint that will stop paying for returns.
Reserves against returns is one of the dirty little secrets of the publishing industry. It's a practice that was established after the Depression to entice book stores (once mom and pop stores, now chains) to order more books in the hopes that something would fly out of their stores. The way it is set up is that the stores can order as many copies as they want and then return what they don't sell for credit. No other industry I know of does this, so it's actually an out-dated practice.
The way this actually works is that in order to make sure the publisher doesn't overpay the author on books that might be returned (God forbid!!), 25 to 33% of an authors' book sales are not paid to the author until 2 years after the book is published just in case the books are returned.
So what this means is that in order to fund the publishing industry, authors lend a quarter of their book sales income to the industry until so much time has gone buy that there is no excuse not to pay them.
The reserve against returns policy, and returns in general, is something authors (and agents who make their living from a percentage of author's sales) should be over-joyed to see disappear from the industry.
But the model that HarperColliins has put forth is just moving the burden of author funding from the back end to the front end.
Let me explain.
They want to do away with author advances, which means that authors should write a completed manuscript and then wait up to a year and a half after signing a contract to see any money (because it takes at least 9 months to go from manuscript to published book, and sometimes, another 9 months to do an edit/rewrite before that).
This too is wrong.
I believe that even the never-before-published author should receive at least minimum wage for a completed novel. As a former journalist who can write to fit and under deadline, if I were to write 300 pages nights and some weekends, it would take me at least 300 hours (probably over a year). At minimum wage ($6.55), that would be $1955. Add in another 10 hours for editing and round up $2500 (so you can pay a 15% commission to your hard-working agent), and the absolute minimum a publisher should pay an author in 2008 is $2500.
I also believe that authors with a track record should be compensated accordingly.
And, for what it's worth, as long as I am posting my publishing beliefs here, I believe that authors should be paid within 30 days of sales, not every six months, since we now live in a universe where publishers can track book sales down to the minute.