Know-How Exchange : Strategy

I think the classic tale of Nordstrom's liberal return policy tells it all (whether or not the story is actually true is the subject of debate).

https://www.snopes.com/business/consumer/nordstrom.asp

It's all about the bottom line. If you think people will abuse it, don't do it. If you think the positives outweigh the negatives, go for it.

If you consistently advise merchants on the subject, I would think that you should have some historical data to show that "returns went up by 8% while gross profits increased 240%" or something along those lines.

Absent that kind of data, test it out and see what happens. You can always change your policy later, just keep track of which sales have the liberal policy so customers don't accuse you of pulling a fast one.

Personally, I think if your client does not have a household name, it should give more consideration to your idea that a liberal return policy will create a better selling proposition.

Paul

One point worth mentioning regarding e-commerce:

It is a "hand-off" environment. Customers cannot hold, touch, smell, or test the product(s). Therefore, a risk is involved in the customer's shoes. Recognizing this risk and sharing the responsibility by offering a return policy not only earns respect, but instills a sense of security...a foundation of trust.

A "No Return" policy in a digital environment is quite alarming. Particularly because the customer feels like they are stuck...thereby increasing the risk factors. Certain items such as software, food, and video games (products that can spoil, be copied, abused, etc) may certainly warrant a no return policy WITH PROVISIONS.

Provisional policy is the "meeting in the middle" answer to the dilemma. If you offer a fair return policy provided the item is not damaged, opened, used, spoiled, etc. MINUS shipping expenses and within a predetermined time frame (i.e. 30 days); customers will be more likely to take the risk and feel comfortable you are not trying to stick it to them. I think you catch my drift and perhaps use similar arguments.

I think your best answer is to concentrate on the psychological aspects of e-commerce, trust, etc. mentioned above. Formulate a convincing reasoning with examples. What examples? Well, go to every major online retailer to receive instant comparisons (Amazon, Walmart, Target, ebay, Microsoft, Dell, etc).

If you require an outside consultancy to assist you with creating some professional strategies based on your actual situation(s), please feel free to contact us (just click on my name). We would be more than happy to help!

Thank you. I hope this helps!

--Blaine Wilkerson
Pres., Jett Enterprises

In my experience, the more liberal the return policy, and the longer the warranty period, the less likely people are to take advantage of it unless their problem is serious.

For example, if a product doesn't perform precisely as advertised, but generally works, if it has a long warranty period, people will postpone complaining about it on the basis that "It has a long warranty, so I'll wait until it really breaks down".

In terms of liberal returns, the more liberal, the greater the word of mouth.

How many quibbles have you heard from someone who returned an item that just didn't suit them, to find all they can get is a credit note with a short expiry period, not a cash refund. There's nothing else they want in the store, so they either take something else they don't really want, or take the credit note, visit the store frequently and more despondently to find they still can't find something suitable, and eventually the credit note expires.

Doesn't sound like a basis for positive PR or WOM advertising, does it?

On the other hand, if the product had been accepted back without any fuss, and the cash refunded, how likely do you think that customer would be to recommend the store to a friend?

Obviously there are going to be some exceptions for hygiene or other logistic reasons, but you get the picture. No-one needs an angry, sad or disappointed ex-customer out there.

Hope this helps.

ChrisB

It's about TRUST.

If you are going to sell online, you have to put in measures to build and earn trust. A broad returns policy is one of those critical measures.