Nasty Return Policies Damage E-Shopper Relationships

The annual uproar among online consumers who try to return merchandise bought via the Internet generally occurs around the Christmas holidays, but some e-tailers make it tough on buyers all year long.

As someone who frequently shops online, I am highly motivated and persistent when it comes to researching the return policies of various Web merchants before I buy.

Recently, I decided to use shopping bot MySimon.com to do a price comparison among several e-tailers who all sold the same handheld organizer. Putting aside the price discrepancy among e-tailers — ranging from US$258 to $499 for the same item — wading through the often hard-to-find return policies was a nightmare.

For those who have not bought electronics online yet, be aware that return policies are usually strict, certainly not consumer-oriented and often deal breakers.

Quick Decisions

What stands out the most among many electronics e-tailers is the extremely limited time frame in which the buyer must decide whether to keep an item.

On my MySimon journey, it was not uncommon to find merchants with policies that allowed only three to five days from the time of delivery for a return to be sent. That short window did not work for me because I was looking to buy a graduation gift. By the time I receive the item, give it to the graduate and allow him time to take a look at it, far more than five days will have elapsed.

The limited-time return policies suggest to me that merchants are heartily discouraging returns, rather than positioning themselves as customer-friendly sellers intent on developing customer relationships.

Restocking Fees

As if the time-frame issue is not reason enough to opt for a drive to the mall, there’s the next dealbreaker issue of “restocking fees.”

What exactly is a restocking fee? I haven’t quite figured that one out. It seems that some electronics e-tailers have simply built this additional charge into their return policies, adding as much as 20 percent to the cost of the item if the buyer decides to return it.

In dollars and cents, that means if I go for the great $258 price on the handheld, and if I can think fast enough to get it delivered to me, wrapped, given to the graduate (who must decide if he wants or needs it) and then return it to the seller within the three-to-five-day period, then I’ll be blessed with a charge of almost $40, simply for the privilege of returning it.

Hello, Net merchants? Is this any way to earn our business?

Too Much Trouble

As a frequent online shopper, my overall observation is that returning merchandise bought on the Internet is too hard. This latest experience with the handheld organizer was more extreme than most, but even the most minor returns have been tough. For example, it took one e-tailer two months to credit my credit card after I returned a pair of shoes.

Take the case of Outpost.com. In general, the company is a well-organized, easy-to-use pure-play e-tailer. However, when it comes to returns, Outpost shoppers who want to return merchandise must call a customer service agent first and plead their case, before finally being given an item-return number that must accompany the returned merchandise.

Without question, requiring a phone call to get a item-return number is extremely poor customer service management. If an e-tailer wants to use a numbering system, then it should include an item-return number on documents sent with the merchandise when shipped. Not only will that process save customer aggravation about sitting on the phone, it will dramatically lower the volume of calls to the customer call center.

If the reason for return is also required, then put a few checkboxes with possible reasons on the shipping and return forms as well. It’s bad enough that it’s probably going to cost $5 to $10 to return items to many stores. Why should it also cost additional time on the telephone?

We Want Bricks

It’s no secret by now that online consumers like the option of returning their purchases to brick-and-mortar stores. Unfortunately, earlier this year, Boston, Massachusetts-based technology consultant firm Extraprise found that 68 percent of Web sites operated by the top 50 e-tailers do not have such a system in place.

Gap.com, one of the poster-children for easy returns, allows consumers to buy from the comfort of their own home and then return merchandise at any one of its hundreds of stores located throughout the country.

I used the Gap.com return system. Once in the store it took less than five minutes to return merchandise bought over the Web. Best of all, nobody mentioned a “restocking fee.”

Here we have yet another reason that pure plays probably need to start looking for some street-level affiliations.

Service, Please

In short, some e-tailers still don’t get it. We consumers are not going to be swayed by Web merchant demands alone into completely altering our buying habits. We’d like to see some integration between shopping systems we’ve enjoyed for decades and those that offer added value online.

It’s attractive to me, for example, that the handheld can be purchased online for $258, when most retailers charge $299. But I’m not going to work very hard to make it happen. And if I’m going to lose the approximately $40 I saved, if I have to return it for some reason, the value is lost.

Also lost, in all likelihood, is the possibility of a long-term relationship with that merchant.

What do you think? Let’s talk about it.


Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.


15 Comments

  • Restocking fees — what a horror! I believe that they make up the difference between what a drop shipper pays for an item, and what they can bounce it to a jobber for. Worse, the restocking fee is hidden inside the fine print of return policies. Almost all of my competition charges return fees; I don’t, meaning that my prices can’t be as low as theirs (shoe biz has a 30% return rate.) Just wish more consumers knew that the #1 thing to examine in on-line purchasing is the RETURN POLICY!

    • I totally agree! How can someone writing about the industry not know what the purpose of the “restocking fee is.”

      It is the AM ount that the dealer will have to mark the product down to unload it later as an open box customer return. Add the cost of having someone open and verify all the parts are there and repack it “correctly” after 9-10 times the customer just stuffed it all back in and there you have your $40!

      The comparison to the gap was also wrong. The Gap has GREAT margin and more often than not, unless you wore and washed the clothes, can resell at full price.

      You told a story of shopping for best price so the dealer’s margin was already low. Consumers always cry that “relationship” stuff in cases like this. If you were all so concerned with relationships you would pay a little more at a local electronics store that had on site support and repair, and where you could touch the product. But that’s not really what you care about…you care about price! In the end you would always go back to Simon or what ever and go with that low price. So stop crying and go local or go price…you’re not going to get both! If you do…that company will be another dot-com casualty in less than a year.

      • Okay. Talk about “crying.”

        Based on your comments, I guess it’s completely wrong for someone to be upset with bad customer service. Good to know.

        Greenberg wasn’t asking for the moon. He was simply requesting a clear, simple return policy that took into account the realities of shopping, in particular shopping for gifts. He even made suggestions for e-tailers to execute the policy.

        I think that maybe you guys should be a little less defensive — spend a little less time assuming that customers are enemies, trying to undermine businesses by mispackaging returns. Instead, perhaps consider that Greenberg is not the only person who feels that e-tailers could make the return process easier and more sensible.

        And I think one can safely assume his comments about the restocking fee were a little tongue in cheek.

        • The issue of restocking charges was badly summarized in the article because it automatically assumed that such charges are always the basis for a negative issue between customer and supplier. In our case, we supply a lot of product customized to the individual customer. For returns, we charge a restocking charge, but to allow the customer to make any return of customized product, even where the customer incurs cost to do so, should reasonably be viewed as a positive sales tool. All sales policies can be picked apart in isolation – shipping and handling charges seem to be accepted at face value by far too many customers without price shopping. Book sites routinely differ by as much as $1 in S&H charges for the same item, but consider that, on an average $20 book purchase, that $1 is actually a 5% price difference. Look at TV specials and weigh the S&H charges as a percentage of the selling price. Once paid, there is no getting S&H monies back. No, for standard items, restocking charges are worth looking at as a customer service culprit, but are by no means a major source of customer dis-service.

          • Good concept on the article – customer service needs to be more friendly. However, bad use of examples. You use electronics as the example yet then compare it to Gap’s return policy. I agree with the previous post about Gap’s ability to utilize that inventory again. When it comes to electronics, you don’t have that luxury; prices and models change too quickly. What was, for example, Gateway’s return policy three or four years ago when they only sold via catalog? About the same that it is now that “online” is available; they are technology products. Those products are highly commoditized and have margins that don’t allow the merchant to just absorb high returns as matter of business. Just try to go to your local computer dealer who will build you a computer from scratch and try to return your computer 30 days later. Gap can do it but that dealer sure won’t, even though he has a physical store. The fact that he has a physical store doesn’t cure his ills, nor yours as a consumer.

            The point is that returns policies must vary by product…and do at most e-tailers. There are MANY bricks and clicks retailers with different online returns policies. Is that right? Perhaps not in some cases, but returns, pricing, etc. is largely a function of the channel you bought your product through.

          • Almost every medium – small sized local pc shops charge a 10 – 20% restocking fee. This is not unusual.

          • I AM a bricks ‘n clicks merchant with over 1,700 items for sale on my 2 year old site.

            What has astonished me is the ridiculous and inconsiderate nature of some people who shop, both online and at retail stores. With these few, they have no concern whatsoever for what their lack of planning or thought when they decided to make a purchase. They just buy and return for little or no reason. They don’t give a d**n about what it does to the merchant.

            I think the whole system’s wrong. Neither brick nor click retailers should take back good merchandise. Customers who buy through mail-order or online should check the merchandise immediately for damage and be required to reject it or accept it at the time of delivery (yes, UPS & Fedex would have to wait). If it isn’t broken or the wrong item, then it’s a “done deal”. What a bunch of cr*p it is to send something back just because the person you bought if for doesn’t like it. Why should the merchant bear the economic loss for the customer’s bad choice?

            Sometimes I’ve heard “it wasn’t what I expected”. Again, what a bunch of cr*p. There’s a good picture, description, dimensions, weight and material listed. If that isn’t enough information, then they shouldn’t buy it!

            It costs merchants about as much to reprocess and dispose of returns as shoplifting costs them. I believe the similarities don’t stop there. The customer who returns something because they made a bad choice is being very inconsiderate and, in my opinion, is causing harm to the merchant for no good reason which is itself immoral. So . . . buy what you want and live with your choices!

          • I don’t know why everyone is so upset about a restocking fee. If someone buys something from a store like Best Buy or Circuit City, they have restocking fees. If a customer opens a computer item, uses it, returns it, then the store has to resell it at a lower price (since it’s opened) or return it to the vendor. The store takes takes a hit on it from people who just want to try things out. (Let’s face it, there are a lot of dishonest people out there) Stores are there to make money, to pay their employees, etc. They are not a rental store out to let everyone try out a new product.

            Of course if the item is defective, that is a different story. In that case, the customer deserves to get a new product, or a refund.

          • With all due respect, Merchant, are you out of your freakin’ mind? Or at the very least, are you simply in the wrong line of work? Perhaps becoming a jailhouse guard would suit you better.

            Customers are not there to do you favors. Customers are not there to cuddle you. Customers give you money. You give them a product. You are free to charge what you like for that product. For all I care, you can charge more money because you think customers are an evil breed that has it in for you.

            But if it is costing you as much to reprocess returns as it does to lose products to shoplifters, holy cow, don’t you think you are doing something wrong?

            If you’re in business to make money and don’t care about serving customers, go right ahead. But it’s a simple fact that in order to make money in business, one must understand that customers are human beings, who change their mind, sometimes for very good reason, sometimes not. Learn to like it, or get out while the gettin’s good.

            The idea that it is immoral for shoppers to return a product that they are not satisfied with is about as bizarre as they come. Why should customers be sympathetic to your needs when you are so unsympathetic to theirs?

          • If you think consumers should not be able to return items, why don’t you implement a no-returns policy at your site? Then you can sit back and watch your traffic evaporate.

            Unfortunately, consumers aren’t psychic. When I wander down a store aisle, I can’t mind-meld with the merchandise to see if its biorhythms match my own, or telepathically contact my sister to see if she will adore the gift I want to buy her. So I do the best I can — and if it doesn’t work out, I try again.

            Not every aspect of a job is pleasant — accepting returns is a courtesy provided by retailers so consumers will have more confidence when they make a purchase. Learn to live with it if you’re in the game for the long haul.

          • Good for you! I think you have a very valid point. I too AM an "e-tailer" and I recently had a woman return a dress a month after she bought it, worn I AM sure. I even have a return policy on my site which states I do not accept returns without a valid reason, and by the way it does NOT seem to hurt my business. I sent the dress back to the woman with a note asking why she had returned it. I didn’t hear from her for almost a month until I realized that she had taken the charge off of her credit card and out of my bank account. It seems there is legal stealing…buy something, keep it, and then call your credit card company and they will (no problem) take it off! BEWARE… The credit card company told me, "well did she sign something that said she couldn’t return it?" of course not, she bought it online, but SHE STILL HAS THE DRESS… I AM so angry. Good for you…I like your attitude.

  • this was a great article, because it highlights the assumption that we make about on-line buying.

    i have been fortunate that the companies i have dealt with – talbots, cloudwalkers, shoedini, and nordstroms have great policies about returning items. it is not a hassle. however, it would help immensely if websites were more user friendly and upfront about their return policies.

  • Actually, the comments so far seem to miss one of the main points of the article — return policies can be hard to find, and can be deal breakers. For commodity items — say, electronics (sony model xyz1234) you usually know what you are buying before you order it online. For items like we sell (movie/tv/pop culture t-shirts, mugs, toys) there’s more personal taste involved. We’re proud of our service reputation, and our policy is up front, 100% guarantee, for one month. We find it pays off in customer loyalty.

  • As an online merchant I feel you are being extreemley biased. In a perfect world the customer can buy a product at a lowcost online store, use the product for 2 months and then return it at the sellers expense. The seller would then ship it to the manufactuer at the manufactuers expense and everyone wins. In the real world the only loser is usually the merchant who must absorb all the expenses involved. The Gaps and Home Depots simply call the manufactuer at the end of the month and tell them what they have in returns, and are given a credit. Most small businesses donot have this luxery. Considering the site you write for I was very suprised to read such a one sided story. I dont expect a retraction, but it might be nice to see a story outlining all the advantages the online store offers.

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