Will Apple’s sales improve due to faster refund times?
Easy returns, while costly to retailers, are becoming an increasingly important element when it comes to achieving e-commerce success. Companies such as Amazon.com and Zappos have raised consumers’ expectations when it comes to processing returns. Other retailers are faced with the option of matching levels of service or being viewed as less customer friendly. The latest retailer to up its game when it comes to returns, albeit quietly, is Apple.
According to StellaService, via Reuters, Apple has cut the amount of time it takes to process returns and offer refunds to its online customers from an average of 10 days to under a week. The company has been using FedEx’s 2Day service instead of regular ground shipping to speed returns to its distribution centers. Apple, according to the news service, is not charging customers extra for the expedited shipping.
"This is the first time we’re seeing an investment like this on the returns side," Kevon Hills, vice president of research at StellaService, told Reuters.
According to the 2013 UPS Pulse of the Online Shopper survey, 62 percent of consumers who purchased goods online had a return in 2013, up from 51 percent in 2012. Sixty-seven percent of consumers said they would shop more often at a retailer if returns were made easier. Forty-eight percent said they would no longer shop at a site that made returns more difficult.
Discussion Questions
How will faster refunds affect consumer perception of Apple’s customer service levels online? Will the benefits of this investment outweigh the costs for Apple?
It is so important to look at the entire path to purchase – and even return. Apple is smart but Amazon is smarter. I ordered the wrong thing, printed out the label and put it out for UPS the next day. It was picked up at 4pm. At 6pm I received a notice from Amazon they were crediting my account that day.
It isn’t like customers are that upset that a return may take awhile, it is the halo effect of an almost immediate return.
I think this may be looking at the Apple phenomenon from a slightly warped perspective.
The “old” Apple model was to drive sales through relentless innovation and style and not worry so much about little details like having a competitive returns policy. But, as innovation has slowed at Apple, the company is forced to look at more traditional approaches to building and holding customer loyalty.
We’ll have to wait and see how the economics play out, but a growing emphasis on service over innovation isn’t encouraging for Appleistas.
The analyzing, purchase, and the return or keep are all in the lifecycle of the shopper. With the shopper of today, retailers must excel in each area to own more and more shopper mindshare. This year I have shopped more Amazon Prime than I’d like to admit, but why? As Bob mentioned – the return process just amazes me. On a recent return, I dropped the UPS box off at the UPS Store and when I got home my account was refunded. Meaning I could buy more without my wife knowing….
Returns can mean more sales. Retailers make sales fast and simple and thus returns must be the same. They are a selling opportunity and hats off to the Apple team.
Returns are an issue for consumers engaged in e-commerce, so retailers need to be competitive in this area. Being a leader, or being as efficient as the other best retailers, is important to be considered a retail leader. However, it is only one facet of being a leader and will not, by itself, determine the leadership position of Apple.
I’d say there is a correlation between how fast a refund comes, and future purchases — especially with the original vendor. As an Apple user from the beginning, I have found Apple over the years to be “arrogant” (we don’t care, we don’t have to), monopolistic (we won’t have this for two more weeks — we don’t care that this isn’t good business), and evasive (not willing to admit that a product isn’t ready or has flaws). This is NOT the way to do business if you care about your image and product, problems which, so far, Apple had eluded. Now, reality is dawning, and Apple may see the value of adopting more “traditional” procedures; if they give back the money quicker, maybe it will be respent with them quicker, while the transaction is fresh and positive. But, why is a week so great, when immediate would be ideal?
I really don’t see how service could possibly improve. I have had several Apple products develop problems under warranty and the problems were solved within 24 hours in both cases. Solutions DELIVERED to my door; I didn’t have to take anything anywhere, I didn’t have to pay any postage or even take anything to the post office. Apple took ownership and completely satisfied me in every way. I have NEVER experienced this level of service from anyone.
Now you are telling me that Apple is improving on perfection, not because consumers are complaining, but because they think they can do even better than perfect!
The benefit to Apple, from my experience dealing with them is that I will choose their products whenever I can. As to cost, I think equating customer service on a cost per customer basis is the kind of thinking that has gotten GM, Ford and others into trouble. Customer service is integral to brand. If any customer is given the choice of receiving Apple service or GM service they will choose Apple every time.
When consumers know that a company is as interested in their satisfaction as their own bottom line and that in every case their satisfaction trumps a short-term company gain, they will choose to do business with that company every chance they get. This is one of the reasons Apple is the most valuable company in the world.
How easy are you to do business with?
A big part of that answer will come at the “refund moment of truth,” when the customer wants their money back, for whatever reason. This is one of the reasons that made Nordstrom so successful. Same for Zappos.com.
Easy returns and refunds create customer confidence and trust. And, who do you want to do business with? Someone (or someplace) you have confidence in and trust.
Apple’s reputation is already excellent. This will only make it stronger.
Old school retail oxymoron: the better you handle returns, the better your sales are. Not sure why that is, other than a pure customer service play, but now that Apple is also a physical retailer, they have that data too (the stuff that took me 30 years to gain).