Customer return policies – good or bad for business?

This probably doesn’t apply to most services companies, but definitely for product companies.  Lately, I’ve been noticing store return policies that are very strict.  Maybe I’m just so spoiled as an American because I know in other countries, you buy it and that’s it, no returns.  For example, Babies R Us doesn’t let anyone return items unless it’s on your baby registry or you have a receipt.  I find it strange being that it’s a baby store with pregnant women and new mommies galore.  How can a sales clerk tell a woman, “Sorry you have to suck it up and keep this product because you ain’t going to get any store credit or money back here”?  OK, maybe an exagerration, but you get the point right.  Then I’m thinking that maybe Babies R Us is so strict because they can be.  How many baby superstore chains are there in the US?  Not many.  Kudos to Babies R Us for taking advantage of their semi-monopoly over selling baby goods to the masses.

One store that I really like is Target.  If you buy something online, you can return it to the store no problem.  If you buy anything, you can often times return with or without a receipt.  If you have your receipt, then I believe you have 90 days.  If you do not have your receipt, I believe that your return price is the current price.  Also, if you paid with a credit card, sometimes they can look up the item via credit card scan and prodduct bar code scan.  This is a really convienient feature.  Because of Target’s return policy, I am more apt to buy items that I’m on the fence on and see if I still like it when I get home.

So now this brings us to the question, does your customer return policy really affect your business?  I often think of post-sales experience as still part of the end-to-end customer experience.  If you want to create the best customer experience that you can, then yes you should pay careful attention to your business’ return policy.  If you are one of the few stores in the area that sell widgets, you may have more flexible for your business return policy.  Would a customer go elsewhere because of the return policy?  Probably not because they may have nowhere else to go to buy these widgets.

In general, it’s going to be a question that you have to answer for your own business.  Ultimately, you want your customers to be happy.  If you have a loose return policy, there will be a time period during which your customer takes home that product and then no other customer can buy that product because it’s not on your shelf.  If the customer ends up returning the product, it’s lost shelf time.  On the other hand, you may get customers who are not so afraid to spend more money at your store because they know that they could return it if it doesn’t work out.  I’m this type of customer.

Sophia Perl

Sophia Perl is a product manager for a database tool at IBM. She has over 10 years of software development and management experience. Sophia holds a BS in Computer Science from University of Southern California and an MBA from University of California at Davis. She is the creator of iPhone apps PicPredict and Eventabulous.

One thought on “Customer return policies – good or bad for business?

  1. I believe in the return policy. As long as you have your receipt there shouldn’t be a problem. That is what I like about my baby registry, keeping track of all my items for me incase I have any returns.

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