BrainTrust Query: What's the best approach to return policies in a dicey economy?
My dishwasher has a temperament. For years we've gotten the best results from a tablet type detergent. But while on a recent trip to Costco, I saw the leading name brand liquid at a good price and decided to see if perhaps it would make things easier on my dishwasher. My reward for considering my dishwasher's wellbeing was hardened spaghetti stains and spotty silverware.
OK, OK, I get it. So now what do I do with this 1.5 liter bottle of liquid dishwasher detergent that I purchased so hastily? Frantically, I looked through my receipts but could not find the one from Costco. "Not to worry," I said to myself. "It's Costco. They take everything back." And sure enough, they were able to bring up my transaction electronically and cheerfully returned the purchase in cash. The item had no receipt, was used twice and they asked no questions. This is not a plug for Costco but it got me thinking about our current economic situation and the trend to towards clamping down on returns.
Retail refund policies have been an ongoing concern for retailers over the last decade. The explosion of fraudulent refunds has driven retailers toward policies and guidelines designed to protect the retailers themselves. Yes, we need to combat refund fraud. Yes, we must educate and control habitual returnees. However, we must also make sure our customers feel confident about their purchases.
Friends always ask me where the best places to buy things are and I always take into account the chain's after-service policy when making a recommendation. Buying a plasma screen from Joe Schmo who doesn't even want to talk to you after you leave the store is not the best way to have a great plasma TV experience. But a chain that will take back a used product because it didn't work or, more importantly, did not meet the customer's expectations, is serious about maintaining customer loyalty.
Giving sales associates the tools to expedite the refund process is also critical in providing a smooth transaction for the customer. The end goal is for the customer to think positive thoughts about the brand and, in this retail landscape, getting the customer to think positive thoughts is how we overcome the consumer confidence stigma.
Discussion Questions: How do you see the current economy affecting return/refund policies? How do you balance the need to control fraudulent refunds with the danger of turning off honest customers? Are there best practices, such as the ability to bring up transactions quickly without a receipt, that retailers should adopt?