An Explanation of a Core Charge on an Invoice
A customer who purchases auto parts pays a core charge for certain remanufactured parts if requirements are not met for the return of the replaced part, also called a core. The parts seller or the car repair business includes the core charge on the final invoice sent to the customer, which could be the car repair shop that ordered the part or an automobile owner in for repairs that required the part. Parts sellers and repair shops use a process for invoicing the core charge that includes a grace period for returning the part.
The core is a used and non-functioning auto part that can be recycled and sold as a remanufactured part. Some of the recyclable auto parts that manufacturers consider core parts are water pumps, alternators, master cylinders for brakes, brake shoes and air conditioning compressors. Often, the core is one portion of an auto part that can be remanufactured and resold. The return of core parts to the manufacturers lowers the cost of the auto parts and related auto repairs.
A customer pays the core charge as a deposit on the recyclable auto part if he does not have the old part in hand at the time of purchase. An example is the auto repair mechanic who purchases a master cylinder for a brake job. He pays the core charge when he purchases the part but receives a refund of the core charge when he removes the old master cylinder and returns it to the parts seller. The amount of the core charge depends on the part and can range from less than $20 to more than $100.
An invoice includes a core charge if the sale or service involved a recyclable core part. State regulations require auto repair shops to include certain information on their invoices, including a list of all parts used, the core charge, if any, and requirements for a refund of the charge. An exchange agreement in an invoice allows the customer to pay the core charge and keep the core part, but it also provides for a refund of the charge if the customer returns the core part. The auto repair shop passes the core charge on to the customer if he prefers to keep the core part.
The auto parts and repair industry uses the core charge and the possible refund as an incentive for customers to return the core parts. The invoice includes the time period allowed for return of the core part if the customer wants a refund of the charge. Parts sellers might require customers to pay shipping costs to return the core parts. The customer risks loss of the core charge if she fails to follow the parts seller’s requirements for returning the core part.