Return Policies from the Consumers Point of View

1
Return Policiesfrom the Consumers Point of View

• Dr. Dale S. Rogers
• Center for Logistics Management
• University of Nevada
• Reverse Logistics Conference
• Lake Tahoe, NV
• September 13, 2000

2
Presentation Agenda

• Background of focus group study
• Purpose and goal of study
• Methodology used
• Focus group participants
• Question by question analysis
• Key messages

3
Purpose Statement

• The purpose of this project was to determine
  return habits and examine attitudes surrounding
  return policies and processes for both brick and
  mortar and e-commerce retailers.

4
Methodology

• Focus groups
• homogeneous populations
• within the U.S. Canada
• Facilitators
• Deana Rogers 5
• Olatz Apalategui 3
• Eugenia Parker 2
• Genet Sauer 1
• Shannon Thawley 1
• Group 1
• Total 13

5
Methodology

• Developed
• Questionnaire - adjusted after first session
• Bio form
• Incentives
• T-shirts and food

6
Focus Groups
7
How often do you usually return something to the
store?

• Return rates varied
• Majority of college students do not return items
• Stay at home moms are more likely to return items
• Men do not like to return items

8
Why do you usually return something to the store?

• Defective/damaged
• Wrong size
• Did not like it
• Buyers remorse
• Duplicate gifts
• Found item cheaper somewhere else
• Didnt try on clothes before purchasing
• take back what you dont want
• Grandma buys it

9
When you have a quality problem with a product do
you usually return it?

• For college students, it depends on price
• Most women will return items - freedom at 40
• Hispanics not aware they can return items
• Hispanics intimidated by return counter employees

10
Do you prefer shopping at a particular store
because of the stores return policy? If so,
which stores?

• Many shoppers select store because of return
  policies
• Women care about return policies more than men
• If stores tightened return policies most shoppers
  would continue to shop there

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Stores

• Preferred
• Nordstroms
• Target
• Mervyns
• Meijer
• Dell
• Wal-Mart
• Kohls
• Petite Sophisticate
• Abercrombie Fitch

• Not Preferred
• Burlington Coat Factory
• Kmart
• Brookstone
• Ames
• Shoppers Duemart (Canada)
• Motherhood Maternity

12
Preferred Stores

• Customer is right
• They are really nice
• Nordstrom's is a clear favorite
• Some stores are perceived negatively although
  perceptions do not match policy. Service desk is
  a clear problem in some places.

13
Would you switch from your current retailer/store
if they tightened their return policies?

• Consensus is that most consumers would continue
  to shop at favorite stores even if policy was
  tightened
• A few thought that stores return policy depended
  on the individual working the return counter

14
How much time do you think retailers should allow
consumers to return a product?

• Nearly unanimous that electronics should have
  longer return time than apparel
• Clothes - 1-2 months
• Electronics 2-3 months
• Longer for gifts

15
Have you ever heard of anyone that has given an
inaccurate reason for returning a product?

• Prom dresses wedding gowns
• Clothes abuse
• Theft returns
• Nordstrom loans

16
In-store credit vs. refund

• Generally, no one likes a due-bill
• If it is a store that is regularly shopped at,
  consumers do not mind in-store credit
• Cash/credit option (Meijer)

17
How do you feel about restocking fees?

• Most participants had heard of restocking fees
  but not personally experienced them
• General feeling was negative
• If customer understands policy they will accept
  them
• Canadians unaware of restocking fees

18
Purchase with intent to return?

• Women have many reasons not to try on clothes at
  the store
• Toddlers in the dressing room
• Shop for husband
• Time pressures

19
Do you think that different products should have
different return policies?

• Nearly unanimous that computers and electronics
  should have longer return windows than apparel
• Gifts should have longer return periods
• College students do not have many opinions about
  this
• Defective is defective

20
Receipts?

• As long as store policy is clear, having a
  receipt is not a big issue
• Several consumers like gift receipts
• Receipt-in-an-envelope controversial

21
Have you ever purchased a product off the
Internet?

• If yes, when purchasing a product off the
  Internet, do you take into account the return
  policy of the online retailer?
• Do e-commerce companies need to offer different
  return policies from the traditional stores?
  Why? How should they differ?

22
Internet Results

• Most college students and affluent women had
  purchased over the web
• Surprising number of college students have credit
  cards. Students likely to take return policy
  into consideration when buying over the Internet
• Experienced Internet shoppers consider return
  policies
• Fear of giving out credit card over Internet

23
Is it easier or more difficult than returning a
product to a traditional store?

• Generally, the belief was that it is easier to
  return Internet items
• Prefer on-line store that has brick-and-mortar
  location to return to
• They come pick it up

24
What do you think happens to the returned
product?

• For the most part, consumers do not know where
  returned items go
• There is a special little country somewhere that
  gets all of this stuff. If you knew where it was
  you could go there and get really good deals.

25
Return policies are too liberal, too conservative
or about right?

• Generally, respondents believed that return
  policies are about right. Some of the affluent
  women thought return policies were too liberal
  too wasteful in this country encouraged
  dishonesty - its okay to be dishonest
• Believe that stores should be profitable - higher
  costs passed on to consumers
• Customer service people should be paid more
  because it might make them happier

26
Hispanics

• If are treated well will return (are brand loyal)
• Majority agreed that not liking was not a
  valid excuse
• Dont feel comfortable about returning goods
• Especially when you look Spanish, they dont
  treat you well
• Women often are the ones that return the products

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Key Messages

• As interviews progressed the groups moved from
  wanting the store to take all of the risk to
  being consumers being responsible
• When people have information and can really see
  stores point of view they can be compliant.
  This was found in every group.

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Key Messages

• communicate return policies clearly
• Print policy on back of receipt
• Mention policy at the point of sale
• Envelopes with the name of store helps customers
  find their receipts easier
• Offer gift receipts
• If policy is clearly communicated consumers will
  generally go along. If they do not understand
  they will be angry

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Key Messages

• Folks with hard lives less likely to return
  items
• Men are much less likely to return items
• Customers like cash/credit option - Meijer
• Dressing room big issue to Moms. You cant
  chase a kid if you are naked.
• Tightening policy not a big deal for majority of
  respondents - however, they also said they prefer
  Nordstroms policy

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Key Messages

• Items that look like they have been returned
  (package damaged - no tags) are unlikely to be
  purchased

31
Key Messages

• Not much difference between the U.S. Canada
• Not much difference between Hispanics and Whites.
  Hispanic men appear to be less likely to return
  items than white males

32
Key Messages

• Internet customers likely to have higher
  education than non-Internet users
• Most college students have credit cards and feel
  comfortable purchasing over the Internet
• Internet consumers look at return policies before
  purchasing
• demographic groups?