February 11, 2008
Changing Their Minds Costs Retailers £12m Every Week
By Bernice Hurst, Managing Director, Fine Food Network
Another day, another consumer study. This time, TOTAL, the world’s fourth largest energy group and Europe’s leading fuels refiner, asked British pollsters YouGov to question just under 2,000 adults about their shopping habits. The findings of what marketing executive, Neil Robinson, described as “a light-hearted look into the shopping habits of Brits…indicate that the UK is a Refund Nation, where British shoppers are open to trying new things, but enjoy the freedom of returning purchases if there is a change of mind.”
Essentially, Total’s research revealed that “eight out of ten shoppers admit to returning products in pursuit of a refund and more than two million would bend the truth to get their cash back, putting more than £12 million a week back into their pockets.”
In some cases, shoppers shopped because they enjoy the activity and had no intention of keeping what they purchased. Some of the behavior was described as mischievous but others admitted to telling blatant lies, with women far more willing to be devious. Men are often more “aggressive in vocalizing their displeasure, being far more likely to pursue all avenues available to get their money re-credited.”
Reasons given varied from not wanting to try clothes on in the shop to changing their minds in the harsh light of home or receiving unwanted gifts. Some people admitted to not being able to afford shopping but enjoying it so much they buy an item only to get it refunded later.
Top refund lies in the study included:
Pretending an item was a gift;
Buying something at full price, then returning it to buy the same item at a discount;
Purchasing two sets of clothing (e.g. bikinis or footwear) and then returning one item of each size, pretending they were mismatched at purchase;
Deliberately damaging an item;
Altering an item of clothing to fit, then returning it (e.g. shortening trousers)
In spite of this, the survey also found that three out of ten Brits “simply can’t be bothered” to return genuinely faulty items.
Discussion questions: Are returns and refunds part of the shopping thrill? Should retailers take them in good heart or find some way to discourage customers bringing back purchases whether their reasons are acceptable or “mischievous?”
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Believe it or not, in a simpler, less cynical time “Taking it home to try it” was actually considered a successful selling tool for clothing items. For the sales person to get the dress in a bag and out the door of the store and into the customer’s house was considered good psychology.
Now, this did not mean the customer could take it home and wear the dress for a month to decide if she liked it, nor did it mean take it home and wear it to a party and then return it. (And it certainly pre-supposed that if you returned it, it would be with its tags still on, and accompanied with a receipt.) But, being able to to examine a new dress for practicality in front of a mirror at home, with shoes and accessories you already own–or to model and then elicit hubby’s help in choosing between two garments–or getting a friend’s or daughter’s opinion on stylishness, fit and color was very useful–and, considered to be quite reasonable. There are many legitimate reasons for “taking it home to try it,” (and occasionally returning a garment), which have nothing to do with “changing your mind.”
Stores have every right to be very restrictive in terms of demanding a receipt or proof of purchase at time of return, but to put shoppers on lists of chronic returners or to play games with sales prices is very short sighted, indeed. Treating customers like “the enemy” instead of recognizing them as the store’s life blood is usually a serious mistake.
Our research shows that hassle-free refunds are a cost of doing business in most categories. Retailers have trained us that refunds are OK and in most cases without any questioning on why. The refund “lies” listed are rarely even needed when most retailers don’t even ask.
Technology companies have started to crack down on returns, mandating that returns only accepted if the product is not open or is defective. In theory, a great idea and feels like the right thing to do. In reality, it likely breeds deliberate destruction by some.
Two ways to reduce returns:
1) Make the policies a bit more restrictive and better communicate product attributes in-store. Seems obvious that if I know what I’m buying and really understand the product, I’ll return less. We’ve seen several categories where this very much holds true.
2) Be careful about the price-quality tradeoff, particularly in-store and opening price point brands. If a product meets/exceeds expectations, shoppers will be more satisfied. A simple notion but one that is easy to forget in today’s crazy economy.
With few exceptions (high ticket electronics being one of them) it seems that the retailers with the least restrictive return policies enjoy the higher satisfaction and customer service rankings. Legends such as L.L.Bean come to mind. Not only are legitimate shoppers put at ease with the remote shopping experience (catalog or online)–but I can’t imagine the “pranksters” get much fun out of returning something to a place that never asks questions or puts up a fuss?
Liberal return policies also encourage impulse shopping. The “Chief Procurement Officer” in our house regularly orders things in multiple sizes or colors, with every intention of returning one or all if it just “doesn’t work for her.” The cost of shipping is accepted as a trade-off for time/fuel/aggravation spent going to the store. Not a bad trade-off for the retailer (total sales versus some restocking costs) if my household is any example.
#1 reason Americans return clothing: they didn’t try it on in the store. #1 reason they didn’t try it on: the fitting rooms are disgusting. The UK may be Refund Nation, but Americans share that culture. Regardless of the sensationalist examples given by the TOTAL survey, most apparel refund activity is retailer self-inflicted.
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Believe it or not, in a simpler, less cynical time “Taking it home to try it” was actually considered a successful selling tool for clothing items. For the sales person to get the dress in a bag and out the door of the store and into the customer’s house was considered good psychology.
Now, this did not mean the customer could take it home and wear the dress for a month to decide if she liked it, nor did it mean take it home and wear it to a party and then return it. (And it certainly pre-supposed that if you returned it, it would be with its tags still on, and accompanied with a receipt.) But, being able to to examine a new dress for practicality in front of a mirror at home, with shoes and accessories you already own–or to model and then elicit hubby’s help in choosing between two garments–or getting a friend’s or daughter’s opinion on stylishness, fit and color was very useful–and, considered to be quite reasonable. There are many legitimate reasons for “taking it home to try it,” (and occasionally returning a garment), which have nothing to do with “changing your mind.”
Stores have every right to be very restrictive in terms of demanding a receipt or proof of purchase at time of return, but to put shoppers on lists of chronic returners or to play games with sales prices is very short sighted, indeed. Treating customers like “the enemy” instead of recognizing them as the store’s life blood is usually a serious mistake.
Our research shows that hassle-free refunds are a cost of doing business in most categories. Retailers have trained us that refunds are OK and in most cases without any questioning on why. The refund “lies” listed are rarely even needed when most retailers don’t even ask.
Technology companies have started to crack down on returns, mandating that returns only accepted if the product is not open or is defective. In theory, a great idea and feels like the right thing to do. In reality, it likely breeds deliberate destruction by some.
Two ways to reduce returns:
1) Make the policies a bit more restrictive and better communicate product attributes in-store. Seems obvious that if I know what I’m buying and really understand the product, I’ll return less. We’ve seen several categories where this very much holds true.
2) Be careful about the price-quality tradeoff, particularly in-store and opening price point brands. If a product meets/exceeds expectations, shoppers will be more satisfied. A simple notion but one that is easy to forget in today’s crazy economy.
With few exceptions (high ticket electronics being one of them) it seems that the retailers with the least restrictive return policies enjoy the higher satisfaction and customer service rankings. Legends such as L.L.Bean come to mind. Not only are legitimate shoppers put at ease with the remote shopping experience (catalog or online)–but I can’t imagine the “pranksters” get much fun out of returning something to a place that never asks questions or puts up a fuss?
Liberal return policies also encourage impulse shopping. The “Chief Procurement Officer” in our house regularly orders things in multiple sizes or colors, with every intention of returning one or all if it just “doesn’t work for her.” The cost of shipping is accepted as a trade-off for time/fuel/aggravation spent going to the store. Not a bad trade-off for the retailer (total sales versus some restocking costs) if my household is any example.
#1 reason Americans return clothing: they didn’t try it on in the store. #1 reason they didn’t try it on: the fitting rooms are disgusting. The UK may be Refund Nation, but Americans share that culture. Regardless of the sensationalist examples given by the TOTAL survey, most apparel refund activity is retailer self-inflicted.