A TGtbT.com Teeny Tip:
An interesting discussion on how to set a return policy, from Groupon.
What might you change, to make your business more customer-friendly?
How much of your return policy is designed to “protect” yourself from the one-in-a-hundred PITA…and is it worth it, to cut into every possible sale that goes south when the customer realizes “all sales are final”?
And how much do you think a return policy costs you…in terms of fulfillment, and in terms of reaching out to your customers and building their confidence in your business… and in terms of advertising expense. Since I have always maintained that the cost of satisfying a customer is PART of your advertising and marketing budget. Satisfy her for a $15 cost, or spend $1500 on TV ads… hmmm…
Just something to think about….
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Auntie Kate The Resale Expert 
We have a three day return policy – for furniture. I am telling you – it is brilliant! We are very relaxed on our returns (even if it means on occasion the shop will have to take a hit). Our customers trust us and they know they won’t get stuck with something that won’t work. They get a full refund – no questions asked. I would say, conservatively, that our return policy results in more than 20 sales per week, that might not have otherwise occurred. I highly recommend it!
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Thanks for chiming in, Kellie. I most heartily agree: a gracious return policy is the CHEAPEST form of customer service any shop can offer!
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I have had a seven day return policy for at least 15 years. Yes, we sell mostly clothing but even our furniture and home decor is returnable. Our return policy says, “You may return any item within 7 days with your receipt and tags attached. Items must be returned in the same condition they left the store.”
It really removes any concerns for those who are buying for others, like grandmas. If they are not sure something will fit or someone will like it or if their toddler is having a meltdown in the store, they will go ahead and buy it with the return policy.
Our return percentages have been less than 2 % every year. The good part is that most people who return something purchase more merchandise when they come back because there is new merchandise that wasn’t there the first time they were there. It reinforces to them that we get new things every day.
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We also offer a 48-hour “on-approval.” There is a small amount of paperwork, and the off chance that a consignor will use her credit before we know that an item is “for-sure” sold. It does ease customers’ minds to know they have an option to return and they need to leave our OA tag attached to the purchased item. For people who aren’t 100% sure, it often tips them over the edge; I’d guess that we get only about 25% returned. (or maybe it’s the 80/20 rule rearing its head again, lol.)
Speaking of math…Kate, your numbers don’t add up! 99.9% would be .01%, not one in a hundred – just trying to keep you honest! Thanks for the blog post!
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So you’re saying that only one in a thousand, instead of one in a hundred, is a PITA? That’s great! Maybe we should do a scientific study. “Excuse me, ma’m, do you consider yourself a PITA?” 😉
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We are the “all sales final” type of consignment shop – I am worried that something will come back broken or damaged in some way – artwork frames can be scratched, delicate items chipped, pillows smoked around – plus all the big furniture – the way many people load things in their cars and trucks makes me cringe, since I know they’ll come out the worse for it. For every one person who shows up with moving blankets and tie down straps, we see 30 who just jam it in the back of their SUV.
I’m sure you’re right, that it’s better to have a friendly return policy, but honestly, in the time we’ve been here, I’ve only been asked about returns a couple of times. The vast majority seem to assume that all sales are final with consignment.
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We have handled the return policy by have a “24 hour try it”. A customer can pay for an item, we fill out a little paperwork. If the customer finds that the item works in their home, then the sale is complete. If not, they have 24 hours, that means the next business day, to return the item for a refund. The “Try It” seems to alleviate the fear of those who are not sure, for our customers that just like to be sure they can return things, and for our interior designers and stagers.
It has worked well for us. The only issue is that the consignor may come in to be paid during the 24 hours. We pay the consignor out. If the item does come back the next day, we retag as a “store account”.
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Yes, Ruth, that’s a great solution. It’s what I called “On Approval”, as seen in our Sales Counter Forms Layout Ideas Kit over at our Products for the Professional Resaler.
Of course, this option needs to be well-publicized with signage, and sales staff need to be sure that customers understand they are welcome to use the service. Without that, customers tend to assume All Sales Final in resale retail.
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