How it works
Many parts, such as starters, alternators, turbochargers, injectors, brake shoes, calipers and batteries, are sold on an exchange basis. The supplier adds a core charge, a refundable deposit, to the price of the replacement. When the shop sends back the old part in acceptable condition, the supplier credits the core charge. The returned cores are often remanufactured. California's Bureau of Automotive Repair publishes a short explainer on how core charges work.
Why core returns leak money
Each unreturned core is a deposit the shop paid and never got back. Common causes:
- The old part is thrown away or left at a roadside job.
- The core is damaged, drained wrong or missing pieces, so the supplier rejects it.
- The core sits in the shop past the supplier's return window.
- Nobody checks that the credit actually arrived.
Steps for clean core returns
- Note on the work order that the part has a core.
- Tag the old part with the job, unit and supplier.
- Store cores in one place, kept clean and complete.
- Return them on a regular schedule, with the original invoice reference.
- Match supplier credits against the cores sent.
Core charges on customer invoices
If the shop keeps the core and returns it, the core charge usually does not go on the customer's final bill. If the customer keeps the old part, the shop may pass the core charge on. California's Write It Right guidance says that if a customer requests a replaced core part sold on an exchange basis, the core charge may be included in the estimate and invoice. Rules vary by state, so check yours.
Tax note
Some tax rules treat core charges specifically. The Canada Revenue Agency, for example, publishes guidance on how GST and HST apply to core charges. Check the tax rules in your state or province.
Mobile businesses
Mobile technicians should bring cores back to the shop the same day and log them, because cores left in service trucks are easily lost.
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