Nordstrom, Macy’s, Bed Bath & Beyond and now Amazon have policies in place making it easy for customers to return merchandise. A New York Times June 13th article focused on those liberal return policies and how sales associates are being penalized because customers are sometimes abusing the system. So the questions are:
- Should customers be able to return merchandise months after the purchase?
- Is it fair to penalize the associate who helped the customer?
The article states, “unlike returns at online retailers, those at many department stores have a side effect: they can unexpectedly lower a worker’s paycheck weeks or months after a sale is made”.
“Many years ago Macy’s had a 10-day return policy,” said Ken Bordieri, president of groups of retail workers in the country. Then Macy’s eliminated the time constraint on returns, which had been six months, in 2010. “When you have a return policy that says ‘We’ll take anything back anytime,’ well, then returns go up,” Mr. Bordieri said.
The article does not focus on or provide consul about the length of time customers should be allowed to return merchandise nor the condition of the merchandise when it is returned to the store. What about the Macy’s customer who brought back a perfume bottle with only a drop left? The question about the effect of returns on both the company and the associates should be addressed. Should the sales associate be charged back? What is a reasonable return policy?
My business centers around customer service and care; I am a long time customer advocate and see the transaction from the customers’ point of view. On the other hand, I am a business owner. I don’t agree that a return policy should be so liberal as to encourage returns from customers who have used the product and want to “upgrade” their purchase at the expense of the company and the associate. Certainly, a 90-day return policy is more than fair to the customer. Within that time period, a customer should know if the product is defective, doesn’t fit, isn’t the right color or, with the perfume example, doesn’t smell good.
Policies should also be in place to empower the associate. In some cases, exceptions about returns must be made; perhaps the customer was on a long vacation or a family member was ill or the appliance stopped working after 100 days. Training for associates should include softening the message to the customer. “I will check with my manager and get back to you” is much better than, “It’s after 90 days so there is nothing that can be done.”
The associate should also know that his or her pay check will not be affected after that 90-day period. No matter how liberal the return policy, a sales associate commission will not be charged back after 3 months.
The article goes on to imply that some sales associate “quietly” tell customers who are hesitant to purchase something that they can always change their minds and return anything for a credit or replacement. That practice should be closely monitored and managed. I’m sure every company has detailed reports about the percentage of returns by associate.
Well-seasoned sales associates are as valuable to a company as its customers. Being fair to employees is an integral part of the customer experience equation.
What do you think?
How long should customers be allowed to return merchandise?
Should sales associates be penalized for liberal return policies?
I do not think there should be returns unless there is a serious flaw in the product (like failure in a cell phone during warranty). But articles like towels, clothes need to have a time limit
As I see it, this isn’t a chicken or egg issue. If the culture, set of sales processes, and associate enablement and empowerment is in place to be liberal re. returns, then employees shouldn’t be penalized irrespective of how they proceed on the customer’s behalf. There’s a piece of urban legend that a Nordstrom associate issued a credit, or gave back the purchase price, for a set of returned tires – – even though Nordstrom doesn’t sell tires. Maybe a bit far-fetched, but emblematic of how culture and training impact customer relationships.
Also, if the company has a thorough data record of a customer’s purchases, the amount and frequency may enter into the associate’s decision on how to proceed with a return. Better customer, more liberality.
“Certainly, a 90-day return policy is more than fair to the customer.” This might be true, but based on what? What would make, say, 80 days unfair, and 100 days too fair? It seems the ’90-day’ period is arbitrary, and we have to press really hard on this range question before asserting fairness.
Still, I understand. For retailers, purchase returns and allowances are a tangible, expected cost of doing business, tracked through a general ledger account.
Most retailers share the risks by building the associated costs into what they charge. As everyone knows, when retailers can’t afford the risk of a product coming back to inventory, we see the disclaimer, ‘all sales are final.’ Sometimes, even this is used as a marketing schtick, to convey to a customer that he or she is paying a stupendously low price. Act now!
I don’t agree that 90 days works as a rule. Suppose I purchase a winter coat in mid-March on an end-of-season close out. 75% off! The salesperson at the outdoor products store assures me it’s “fully waterproof” and will retain its warming loft in the heaviest rain. I take him at his word because I’m not carrying my glasses and can’t read the fine print on the garment label, which doesn’t offer much information anyway.
Fast forward to mid-November, when I use the coat for the first time (disclosure: I live in Virginia). It’s raining heavily, and after three minutes the “loft” is thinner than a french crepe, and I’m near hypothermia. Yes, I will carve out time the next day to take this limp, wet outerwear to the store and request a refund – or at least an allowance. In my view, the salesperson misrepresented the product, and ’90 days’ doesn’t cut it.
I can make a case in this instance for penalizing the salesperson with a commission clawback (as we express it in Sales). This assumes he still works there, and hasn’t gone back to college. If so, then what? But in many (most?) instances, products are returned for reasons that are outside the salesperson’s control. Products have unusual defects. Customers change their minds. They find lower prices elsewhere. Is it fair to penalize the salesperson with a commission clawback if, for example, a buyer sourced a cruddy product, but didn’t tell anyone on the selling floor about the incumbent problems? Here, I’d be more inclined to penalize the buyer rather than the salesperson. Stuff like this goes on all the time, and nobody who works in retail needs to hear, ‘life is unfair.’ They already know.
IF (big IF!) the retailer wants the sales staff to absorb returns and allowances risks, then the retailer must compensate them appropriately with higher commissions. Retailers can’t have it both ways – low pay for sales staff, and high risk that they have to give back whatever small earnings they achieve.
How much higher should the commissions be? I can’t answer that – but data on the returns history of products could make the risk – reward calculus more equitable.
Gautam, Michael and Andrew…. just got back from a July 4th Holiday vacation. I appreciate and value everyone’s comments. Retailing is definitely in an turmoil. It’s so difficult to find dedicated and knowledgeable retail associates. Companies are trying to cut costs at every turn and long term associates are sometimes the first to go, which is penny-wise and pound foolish. I still think there should be some time limit for returns, sales people should not be penalized after a specified number of months and as always, employees must be empowered to bend the rules when necessary. Have a wonderful week. Richard