Holiday Shoppers Should Consider Return Policies

Newswise — Returns to U.S. businesses are now estimated to exceed $100 billion a year...and are still growing.

"When U.S. consumers return goods each year whose total value exceeds the GDP (gross domestic product) of two-thirds of the world's nations, it's time to pay attention," says Thomas Speh, professor of marketing at Miami University's Richard T. Farmer School of Business and an internationally known expert* in the supply chain field.

But most of us don't. Although the holidays are a peak time for not only buying, but returning few of us think to check on return policies when purchasing a gift. For example, if you buy a remote and find it's impossible to program will the store take it back even if it's not defective?

We should not only ask about return policies before making a purchase, but be "willing to walk" if the response isn't consumer friendly, says Speh.

"But people assume they won't have a problem and don't ask," he says.

The fact is that policies vary tremendously. Catalog and Internet companies typically have liberal return policies regarding returned goods, often allowing purchasers to return goods even after they've been worn or used. But consumers lulled into complacency by such policies need to be aware that retail establishments vary tremendously in how they deal with returns. For example, some will not take an item back after packaging has been opened while others insist that an item be brought back within 30 days of purchase.

Savvy businesses plan for and deal with product returns and realize that such policies impact not only on customer satisfaction, but also their bottom line, says Speh. Among those companies that excel at dealing with returns are Amazon.com, Estee Lauder, eBags and Roadrunner Sports.

*Speh was the 2003 president of the Council of Logistics Management and is co-author of a leading textbook on business-to-business marketing. He is also co-author of an article on returns that appeared in the Harvard Business Review and has written more than 40 journal articles and research monographs, two books, and has spoken at numerous seminars, executive programs and conferences on chain supply management worldwide.