On the narrow issue of accounting for leaky buckets. In fact, at least under US GAAP accounting (the official audited accounts submitted to the Securities & Exchange Commission), such returns are a liability. (Actually, they are netted out of assets on the balance sheet and out of revenues on the statements of earnings and cash flows.) If you look carefully at the footnotes for a firm's 10-k filing, you will say a boilerplate paragraph on how it has estimated the appropriate provision for future returns & refunds. So if Acme Bucket Corp estimates, based on past experience for example, that 1% of it's buckets are leaky, it has to write down 1% of it's inventory and 1% of its bucket revenue. Spencer Banzhaf