Target ups customer service ante with one-year return policy
Target is standing behind its brands — all of them. Yesterday the retailer announced it would give its customers a full-year to return or exchange any item that is part of the chain’s portfolio of 32 private label and exclusive brands. All told, that covers 70,000 items.
To be eligible for a return or exchange on Target’s brands, customers will need to provide the store with a sales receipt or the credit or debit card that was used to make the purchase.
In addition to its own brands, Target is extending one-year returns and exchanges to items purchased as part of its baby, college and wedding gift registries. All registry items must be returned unopened to be eligible.
"It’s a bit reminiscent of Costco’s liberal return policy," Edgar Dworsky, founder of Consumerworld.org, told the Star Tribune. "It certainly is an unusual move."
Target previously offered customers 90 days on returns and exchanges, the same as rival Walmart, according to an Associated Press report. Amazon allows its customers 30-days for returns.
"At Target, we’re putting our guests first and are committed to offering a shopping experience that’s inspiring and rooted in ease," said Kathee Tesija, chief merchandising and supply chain officer, Target, in a statement. "Our enhanced return policy offers our guests convenience we think they’ll appreciate, while providing additional assurance of the quality of owned and exclusive brands found only at Target."
Target’s new return and exchange policy is the latest in a series of moves made under the leadership of CEO Brian Cornell who joined the retailer last July. Mr. Cornell took over at Target as it struggled to overcome the damage caused by a massive data breach that compromised customers’ accounts in 2013. At the same time he inherited a business in Canada that was losing billions. The decision was made to exit Canada back in January after Mr. Cornell and his team determined it would take until 2021 for the chain to reach profitability.
Under Mr. Cornell, Target has lowered the minimum for free shipping on online orders to $25, launched the Ava & Viv plus-size women’s fashion line, focused new store expansion plans on the chain’s CityTarget and Target Express smaller formats, developed a strategy to differentiate the company’s grocery business and announced plans to invest over $1 billion to "to drive industry leading digital sales growth" and "become a leading omnichannel retailer."
- 365 Days of Awesome: Target Has a New Return Policy For Its Exclusive Brands and Registry Gifts – A Bullseye View
- Target latest pitch… generous one-year return policy – The Associated Press/The Charlotte Observer
- Target extends its return policy to one year on select items – Star Tribune (tiered sub.)
- Target free shipping deal undercuts Amazon, Best Buy and Walmart – RetailWire
- Target develops line just for its plus-sized ‘guests’ – RetailWire
Discussion Questions
What will Target’s new return and exchange policy mean for its business? Will retailer rivals such as Walmart follow Target’s lead and offer more generous return and exchange terms?
I expect Target will get flooded with returns as a result of this policy—especially by Millennials who want to rent rather than own.
Upscale retailers have had to limit the returns of expensive dresses because women would wear them for one night and return them using the store’s liberal return policy.
Ultimately someone, probably their vendors, will have to pay the price.
Target is not taking the lead, they are trying to catch up. Kohls will take back anything no matter how long ago you bought it. I’ve seen people return things unused from a decade ago. To me one year doesn’t seem like much of an advantage. Primarily because if you haven’t returned the item in a few months you probably won’t return it at all. The free shipping with a $25 purchase is pretty standard. Not so sure I’d be bragging that it’s some kind of achievement or competitive advantage. What next, brag they are open on Sunday too? Don’t show me that you are just a “me too” company, show me something that other retailers can’t or won’t do.
A year for returns?! This extremely liberal policy combines a great PR opportunity with an invitation for abuse. I suspect Target did the risk analysis and determined that the PR value outweighed the losses and policy abuse that would be incurred with this policy. The apparent margins of Target’s private label or exclusive lines can absorb the financial losses. I hope that Target gives the employees that work the returns counter a bonus for each transaction that is more than three months after the purchase. The stories that will be given as reasons for the return will be fascinating!
I suspect rival retailers will sit back and watch—and enjoy.
I’m with Hy here.
First of all this isn’t all that revolutionary, and secondly what are the odds I’m going to hang on to something (and the sales receipt) for eleven and a half months and then decide that I’m going to take the trouble to return it?
If you ask me, Home Depot’s return policy is still more liberal since they accept tools back that have been clearly used for a specific job and then returned once they’ve served their purpose.
Or if you want sort of the ultimate return policy what about the original Sears’ Craftsman guarantee that would let you bring back a 60-year-old broken screwdriver and replace it without question or receipt?
The policy is a good one and will get the chain some good press, but I don’t think it will change things much.
As to other retailers, you have to ask what the PR value is of being the third, fourth or fifth large retailer to adopt a policy is.
Doesn’t Walmart already have a very lax return policy?
Target has upset many customers over its return policy. This move loosens it up but adds more complexity. I am not sure this will build any more customer goodwill. They needed to just simplify their policy, like Kohls.
Target is now in the rent-a-product business. This will be most seen in their clothing product sales. I do not see this as such a big deal unless you are a Target vendor who will have to eat these returns. More importantly, what is Target doing to improve their customer service before and during the sales process?
How generous is this return policy? Consumers have to keep the receipt for an item for 12 months and it has to be unopened if a registry item. That is not competitive with the retailers who allow returns of even opened items for store credit without receipts. If Target wants to differentiate itself from the competition and offer a truly customer-oriented shopping experience, playing catch-up and touting conveniences already offered by other companies will not make Target distinctive, it will only keep Target competitive with the other retailers who have done these things first.
I think it’s a good move, but it does not address the basic issues that Target is facing: Out-of-stocks, poor grocery selection, many dated stores, poor training of sales associates and higher prices. Perhaps this and other recent moves are attempts to move the brand away from its cheap chic image. If so, that would be counter to the numerous signs in-store touting “Expect More, Pay Less.”
I’ve found returns at Target to be a no-hassle affair. I simply give them my REDcard and the card is credited. My guess is many of the returns and exchanges will be handled in the same way—sans receipt.
Is the change revolutionary? No, but there is something to be said for making small improvements. Just as death can occur through a thousand small cuts, perhaps revitalization can happen as a result of a thousand small acts of healing.
Nice benefit for customers, but it all revolves around how it is executed. As I read the terms as announced, I see this process infuriating customers rather than bringing customers closer to Target. Let’s see, I need the original receipt and the same credit card. Even after 30 days that is a challenge.
It is all an empty promise. Want a good return policy? How about No Questions Asked? That keeps customers coming back to shop (not to return).
Taking a page from the U.S. federal government by throwing money at problems is not unique or solution-oriented. Open disclosure of how IT security issues are being dealt with would go further to bring back the disenfranchised or doubtful consumers. Another option would be to expand consumer access, as in, more stores of any size or composition and more product, as in, what the local consumer wants. Moving into the omni-channel era with new and proven technologies is a frontier that would most likely pay off. As for what Walmart might do in response, I trust they will continue with efforts to find a permanent home for the product and services they offer in more and more places with newer technologies as they are proven viable.
This offer should drive incremental sales for consumers in categories associated with high risk—electronics particularly. At the same time, the percent of consumers who return items in more than 90 days is relatively few, so the offer has some consumer value without a lot of inherent business expense.
I anticipate that retailers such as Best Buy will quickly match, while others such as Walmart will probably not. So this appears to be a competitive move against the lower end of the marketplace.
Note that this is limited to the 32 private label/exclusive brands only. Now how big is that business? If it is less than 10%, isn’t all this talk simply “Much ado about nothing”?
I think Target’s really on to something this year. Sure, it had a major setback when it closed all its Canadian stores, but its moves ever since have been spot-on.
There’s no telling if Walmart will implement a similar policy, since the retailer hasn’t updated its free shipping threshold in response to Target’s new amount.
Costco is the king of returns and it seems to work for their business, so let’s see how this works for another retail giant.
After 90 days you start to forget where you bought it. Never mind where the receipt is.
In January, my company (LoyaltyOne) did research that clearly shows that returns are a high-risk touchpoint in the retail engagement process. Some numbers worth noting from the nationwide survey of 1,207 shoppers: 51% said store returns added to their post-holiday stress; 61% said they would stop shopping at a retailer after a poor return experience and 87% said they would share information about a negative return experience with friends and family.
On the positive side, 79% said a positive return experience at a store they rarely visit would motivate them to shop more often at that store.
Target and other retailers will do well to pay close attention to high-risk touch points like the returns process. Customers are increasingly fickle and their loyalty is divided. It’s no longer just about attracting shoppers in the store, it’s about cultivating their loyalty through the entire sales and return process.
The truth is, anything but a hassle-free return usually causes a negative experience. Complaints stem from unclear return policies and policies that are inconsistent across all channels. It’s important to note, too, that consumers become unhappy quickly when their loyalty to a store is not taken into account.
I’d encourage retailers to review the profiles of customers who’ve made returns, pre-return and post-return. Assess their spend behavior before and after, paying special attention to high-value shoppers and shoppers who have reported negative experiences through proprietary customer service channels and social media.
Customers want to shop with confidence. Give them a liberal return policy and that just adds to the value proposition. You can compare it to Costco, as the article references, but I’d rather compare it to Nordstrom. While Target is a value priced retailer, they are working very hard to deliver a high level experience. It’s difficult, if not impossible to be the low price retailer and the highest ranked customer service provider at the same time. However, Target is finding a balance that other major retailers have struggled to find.
The generous return policy is a strong confidence builder. Low advertised prices, a great online presence and a good in-store experience puts Target in a strong position. No doubt that competitors will try and match Target’s return policy. Yet, Target was there first and I’m looking forward to what other value they offer their customers once competitors start to copy them. I’m sure they’ll “pull something out their hat.”
This is the first step to improving customer service (i.e. happiness) for Target. Frankly, this should be applied to all products which Target retails. Why only use this for select items and not just everything? As the market becomes more demanding, and retailers more customer centric, returns will have a longer timeframe and more generous exchange terms will abound.