Should Shoppers Look Forward to Many Happy Returns?
Return policies really do factor into how consumers perceive retailers. Those with liberal policies such as Costco, L.L. Bean, Nordstrom and Trader Joe’s tend to generate the warm and fuzzies from their shoppers while those that are more restrictive are viewed in a different light altogether.
Here’s a personal case in point. On a recent trip to the mall, our 20-year-old was looking at dresses at one of her favorite fast-fashion chain stores. Having found a dress she liked, she wondered if it would "go" with a particular pair of shoes in her closet. She fretted about buying the dress because of the store’s return policy, which offered store credits only. Her decision was to pass on the dress and here, she explained, was her thinking. "I would probably spend the money with them anyway if they gave me a return, but I just don’t like the idea that they are trying to force me into shopping with them." She later purchased a similar garment at another chain with a policy that included a choice between giving a refund or a store credit.
Retailers, it has been well documented, have been on high alert in an attempt to reduce the number of fraudulent returns that cut into their profits. Offering store credits is one way retailers have attempted to hang onto revenues. Another tactic, as a recent Associated Press report points out, is using data to "identify chronic returners and gangs of thieves."
The practice of using third-party providers to create "return profiles" on people has some privacy advocates claiming that retailers are crossing a line that shouldn’t be crossed.
Lisa LaBruno, senior vice president of retail operations at the Retail Industry Leaders Association, said merchants have no choice, considering the billions of dollars lost every year to fraudulent returns.
"It’s not to invade the privacy of legitimate customers at all," Ms. LaBruno was quoted by the AP. "It’s one of many, many, creative solutions out there to help combat a really big problem that affects retailers, honest customers, the entire industry and the public at-large."
- J.C. Penney, Best Buy Customer Data Collection Stirs Privacy Concerns – The Associated Press/The Huffington Post
- Will Change in REI’s Return Policy Affect Its Business? – RetailWire
- The Return of Customer Service – RetailWire
- Is Free Return Shipping for Online Orders Next? – RetailWire
How much of a factor are return policies when it comes to purchasing decisions? Where do you draw the line between customer friendly return policies and fraud prevention?