...countries whose marketing and retailing models include liberal return policies. It's good business, attracts customers, increases much-needed cash flow and traffic, and abuse is negligible.
This is part of a reply I made to a comment about liberal return policies made earlier. We get threads on this every once in a while.
I'm not sure that there are "hidden costs," at least when regarding B&M stores. I worked part-time for years at stores, including a major technology store in Houston. We had the occasional abuse, but policies such as a 7 day return policy for notebooks, took care of such occasions. In another situation, one man who had a networking company bought dozens of books and returned all of them over a period of about a year. Finally, we took him aside, showed him his return record, and apologized that we hadn't been able to satisfy his needs. The man was embarrassed, apologized, and was a good customer after that. Some you can't control, like the local politician who bought several computers to network his campaign office, lost the election, and returned the computers. However, we just knocked 10% off the computers and they were quickly gone. In our situation, we didn't lose money on returns - they have their own customers.
We learned, as have retailers like WalMart, Target, etc., that when someone returns something, they usually go back into the store to spend more money. And there are customers who only look at returned merchandise; they would come in once or twice a week and check out the returns trying to find a good deal. I became one of them. The last technology items I bought at a Best Buy were returns or discontinued demos. In one instance, when I was trying to find a hot Sony dSLR that everyone was out of, the sales person checked his computer, found a returned one in a different state, called that store to ask about the condition, and then had it shipped to the local store so I could buy it, at a discount, but also with enough profit left for the store's efforts. Many people here have a negative opinion about Best Buy, but that experience led me to return to that store quite often. Returned items still retain their warranties and return privileges, so they are a safe buy. A few manufacturers required or encouraged that returns be sent to them so that they could be checked out and sold as refurbished or to replace defective units. However, we rarely did this as we found it was far more profitable (and less work) just to mark them down a little and sell them again. Returns never were around long. Last summer, a B&H salesman told me the same thing, describing customers who come in regularly to check out returns and used items...he even referenced that GH2 bodies usually went out the same day they came in. None of this is scientific, but he obviously had the same opinion of the policy as I am describing here.
As another person wrote, some stores encourage returns. It's just good customer service and marketing, and builds customer loyalty. And, it seems to be spreading. I have lived in Beijing for ten years, although have just moved to Korea. When I first went there, they had the same kind of draconian no-return policy (and I'm including "No Return if Opened" in that) as found in many countries. It made me scared to buy anything, and I rarely return anything. For one thing, it's just a hassle, and no one wants to give the impression that they made a mistake. Well, over the last decade, with the influence of American marketing and management, and with the arrival of stores such as WalMart, Carrefour, Apple, and others, that has changed. Now, many of the bigger chains have adopted the idea, and seem to be somewhat proud of it. When I bought an iPad at an Apple reseller in BJ a few months ago, I knew what I wanted and had no intention of returning it (like most people), but the sales woman went out of her way to explain I had two weeks to return it "no questions asked" and even circled the return period on the receipt. Very good customer relations training. As I said, I just moved to Seoul. There is a big store called eMart nearby. I bought some, what I thought were, bicycle goggles there. I realized, when I got home, they were ski goggles because they had limited ventilation. Of course, I had opened the box. Why they were in the bicycle section I don't know, but it was a stupid mistake on my part. I took them back and they returned my money without even looking at the goggles. With plenty of smiles. I turned around, went back into the store and bought the proper ones, and a few other things I hadn't planned on getting. No one has lost, and I left with a good feeling about the place. Some stores have actually extended their return privilege time period, and Costco used to have an unlimited return period (which changed; I'm not sure what it is now), which their staff went out of their way to point out to me when I bought a watch there. This kind of good marketing makes an impression on people, which can pay off later.
Tesco operates a similar large store here called Home Plus. It's the second biggest retail chain in the country. I don't know what their return policy is in the UK, but here it is decidedly American. I returned two shelving units without any questions being asked - they didn't even look at the boxes. Again, I walked back into the store and bought two more, bigger and more expensive ones. The next time I went to that counter, it was to apply for one of their frequent shopper cards. Who loses?
I can't prove that there are no "hidden costs," but my experience has indicated that it is a very good policy and beneficial to everyone. I'm sure that some MBA candidates have written dissertations on this and perhaps I'll try to find one.
Lastly, I should point out that I travel a lot every year because of work, spending about 3 weeks in the UK, a month in the US, and also go to Hong Kong, and some other places quite often. I have never found lower prices than those in the US. The model seems to work. If the above-mentioned Tesco Home Plus had the same return policy as another poster mentioned exists in the UK, I'd be shopping only at eMart.
I have read numerous threads on this over the years and I've always noticed that the people who criticized a liberal return policy as something that leads to unethical behavior or is somehow negative come from countries that don't have a tradition of that policy and clearly don't understand the competitive advantages of such a policy. By the way, no one in this thread has written those views, but I have encountered them quite often in the past. On the other hand, how many times have we read compliments about Amazon's handling of returns, even covering shipping in some cases? Quite often. No amount of advertising can buy that kind of praise. Well worth any "hidden costs," if any.
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"Knowledge is good." Emil Faber
