Retailers
handle returns with diplomacy.
By Carol
Schwab
Gone today, here tomorrow. And so it goes when customers return
merchandise. It’s never over until it’s over for retailers.
Overall, customer returns are estimated at 6 percent of all
retail sales according to a National Retail Security Survey.
And some categories may run as high as 13.4% for auto part stores
or furniture stores. Consumer electronics returns are 10.9%
and women’s apparel 11.5%. On the low end of the spectrum are
supermarkets, which run around .2%, drug stores at .5% and hardware
stores 3.5%.
So, what do merchandise returns mean to the region’s businesses
and how do retailers handle them? “We see returns as a service
to our customers,” says Cheryl McGinnis, director of customer
service at Famous Barr. “We want our customers to feel like
they have options in purchasing and returning,” she states.
“We have a really lenient policy, compared to our competition,
and we want it that way. We want to err on the side of leniency,”
she says. “If someone wants to return something, we always try
to work with him or her. We stand behind our merchandise. Even
if it is just something that doesn’t live up to our customers’
expectations.”
McGinnis says most of the returned items are in re-sellable
condition. “However, if the merchandise is defective, maybe
its fabric pills or a seam has come apart, it can be returned
to the manufacturer,” she says.
Returns that aren’t re-sellable aren’t given to charity. “We
don’t want to have the recipient associate Famous Barr with
damaged merchandise. As a company we want to feel proud of the
donations we are able to make to local charities,” McGinnis
says.
Like Famous-Barr, Schnucks also regards returns as a service
to customers. “We look at returns as an opportunity for great
customer interaction,” says Joanie Taylor, director of consumer
affairs for Schnuck Markets. “Our customers have confidence
in us, because we have a fair return policy.”
And, like Famous, there are always exceptions to their policy.
“It is often the way you handle exceptions that makes you stand
out. And, customers are very good about not taking advantage
of our policy.”
Taylor says returns are such an insignificant part of Schnucks’
business, that the company doesn’t even track them.
Most of the goods that are returned to Schnucks aren’t re-sold.
“We never put anything perishable back on the shelves. We don’t
know where that product has been and for how long. Maybe it
has been sitting in someone’s trunk for days. Once perishable
products leave our store, we can no longer guarantee their quality
and won’t resell them. Nor are they given to charity.”
Some of the products that customers bring back can be returned
to the vendor, such as tea bags without strings.
Retailers and manufacturers share the burden of returns. However,
they aren’t always in agreement with one another as to how they
should be handled. A retailer looks at the customer satisfaction
component, whereas a manufacturer will define a defective product
from a literal, technical point of view.
Some retailers expect manufacturers to be accountable for the
total cost of inbound and outbound merchandise as well as the
cost of the merchandise. Others may share the cost of the returns
with manufacturers.
A new concept, The Return Store, was introduced in June by Winn-Dixie
Stores, Inc., one of the nation’s largest supermarket chains.
The store serves e-commerce and traditional merchants and their
customers in handling merchandise returns. For instance, a customer
who has returns from several different stores, such as say a
department store, grocery store and discount store, can bring
back the items from these different stores to one convenient
location. The Return Store then returns the items to the merchants’
designated destinations.
Clearly retailers are sending the message that customer satisfaction
is paramount. Regardless of the impact of returns on the bottom
line, retailers remain customer focused.
