Now that all the wrapping paper and ribbons have been cleared away (almost?), we are faced with the issue at hand: returning those gifts that a) didn’t fit, b) didn’t work or c) didn’t thrill us. This can be a daunting process especially as many retailers have strict rules about returns. According to these findings, product returns cost manufacturers and retailers more than $100 billion each year.
Some companies have dealt with this issue by instituting even stricter return limits. This can include limited time frames, non-refundable shipping costs, and personalized products that can only be returned if totally defective. The interesting thing is that researchers are finding regulations like these to have an adverse effect on the brands’ bottom lines.
Recent data shows that companies have more to gain from allowing their customers to “return almost any product at any time,” stating that when a retailer has a “lenient product-return policy” customers are “more willing to make other purchases.” This could be because of the psychological effect that this policy has on buyers. When you know your satisfaction is guaranteed, it becomes much easier to make those purchases in the first place.
The research also shows that policies such as these help to build goodwill in the minds of customers which provides a “touch point for building a successful buyer-seller relationship.” One area that this practice is becoming more commonplace in is the automobile industry. Several automakers currently offer 30, 60 or 90 day “satisfaction guaranteed” programs where you can bring the vehicle back with no questions asked. Another way that retailers can benefit from these findings is by providing free return shipping.
By building more customer satisfaction and reducing perceived risk of purchases in the area of product returns, many brands can look forward to experiencing revenue increases through more future purchases from sales. While it might seem like a totally different issue, smarter business practices often fall under the category of marketing because everything a company does speaks to its audiences about its identity and what it stands for. Does your brand need help to speak more clearly what you’re all about?