Today’s post looks at the strange nature of persistent returns or requests for refunds, what does this tell us about society? Are we losing our basic values of right and wrong? Part two of the story about losing all my coffee cups will follow next week.
While scanning news bulletins earlier this week, this article caught my eye “Do you buy,wear and return?” To set the record straight, I am not in the habit of visiting women’s fashion or style blogs, the headline intrigued me on two levels:
- As a student of human behaviour I am interested in what might motivate people to buy, wear and return or buy, use and return.
- If this is a growing problem, there might be a business opportunity for any one who can help solve it.
The article hints that the majority of clothes purchasers are guilty of this practice. That it cost retailers $8.8 billion last year and at least one major retailer, Bloomingdales, is planning to take action to reduce it. Somewhat concerning is that offenders include customers shopping at Victoria’s Secret stores.
One of the tactics to make it difficult for customers to wear an article of clothing in public and then return it is to fix large unsightly tags to the garment at various places. A type of tag that must be cut off and can not then be re-attached. – That’s a business opportunity for someone.
As I understand it, the problem is worse in the higher end stores, where economic hardship is not the motivating factor.
A store manager in a mid price range national chain of clothing stores told me that the chain’s policy was to request a receipt before issuing a refund, however if a customer made a big enough scene, a refund would normally be given to avoid negative publicity – especially if the store was full of customers. This store had already called the police to arrest a brazen shoplifter who had stolen an article of clothing from the store, then brought it back the next day for a refund. He had got away with the same trick at other stores in the chain until someone started connecting the dots and checking security camera recordings.
What then drives people to take advantage of lenient return policies? Greed? Buyers remorse? Or satisfaction from putting one over on a retailer?
At the other end of the scale is James Altucher’s story about the low rate of refund requests for his book after he promised to refund people the purchase price if they could satisfy him that they had read the book. Less than 0.5% asked for their money back.
What about on-line businesses? It seems that those offering good value in any price range have low rates of refund requests and happily honour them. It is generally cheaper to tolerate and have a system to handle, small numbers of refunds than to investigate and argue about each one.
What do these two extreme examples tell us about society? That relatively wealthy clothes buyers are dishonest or enjoy gaming the system and on-line book buyers are saints? Not at all, I don’t think we can draw that conclusion. It is a question of beliefs and values.
However my personal philosophy is that I will only return something I have purchased if it is defective, unable to perform the task it was designed for or I have made a genuine mistake about the size or fit of an article of clothing. I once requested a refund for a high ticket on-line course because it did not provide the results claimed unconditionally in the promotion that attracted me, I was one of a large number of buyers taking the same action.
Many returned and refunded items do not get resold. The cost of re-packing, re-entering in the system and re-stocking inventory can be higher than the cost of writing the item off, throwing it in the garbage or donating it to charity. It’s the same as fraudulent insurance claims, the prevalent belief that it’s ok for the big corporation to carry the cost is wrong. That cost is carried by all of us in the form of higher premiums, or in the retail clothing trade, the $8.8 billion a year will be added on to the price of other clothes.
Although corporations have a unique character and momentum, they are owned by shareholders, many of those shareholders being pension funds. Scamming a big corporation could have the consequence of reducing a deserving and possibly struggling, pensioner’s income well before it affected the salary and bonus of its CEO – generally the perceived target of corporate attacks by both the media and the public. Has the media gone overboard in championing consumer rights and promoting the belief that corporations are evil empires controlled by greedy, merciless executives?
It comes back to character and the golden rule, if we would not like to be on the receiving end of those scams, we should not be participating in them either.
What do you think? Am I just an old Boomer yearning for the solid, honest values of a bygone age?
Leave a comment with your thoughts.
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