Why you should have a liberal return policy, even if you can’t measure the ROI
February 16, 2012
Everyone knows the story about how Nordstrom took back a set of tires. But is a super-liberal ‘Nordstrom like’ return policy right for your business? Is it worth the cost?
And since you’re running an internet-based business, not a brick and mortar business like Nordstrom, maybe this isn’t the best example.
So let me tell you about our return policy. It’s liberal. It’s expensive (for us). And lots of people abuse it. Yet it’s totally worth it. Let me explain…
We’ve had a super-liberal return policy since the first day we lauched Printfection back in ’06. Every piece of custom printed merchandise we send out on behalf of our store owners comes with a 100% no-questions-asked money-back guarantee:
We do whatever it takes to make sure your customers are happy. We even pay for exchanges, including re-printing and re-shipping costs. Instead of shipping the old items back, your customers can donate them to a local charity or give them to a friend.
So imagine you’re using Printfection for your company merch store. One of your employees or fans orders a small t-shirt and realizes they should have ordered a medium. We don’t even make them send back the small. We let them keep it, and send them a medium free of charge. Same for returns: we give refunds without making the customer send back the item. It’s basically honor-system refunds.
Obviously this is really expensive, even at just 1% of orders returned or exchanged, it adds up fast.
I can’t tell you how many times we’ve talked about “tightening up” our return policy. It’s a frequent conversation at our monthly financial review meetings. Especially since we know some people take advantage of us, blatantly abusing our generosity.
But I’m thankful we haven’t caved. This kind of policy is basically a super-cheap marketing expense. Similar to how Zappos upgrades everyone to next-day-air shipping free of charge to WOW them.
So if you’re thinking of liberalizing your policies – do it!
Best of all, liberal policies work for more than just returns. All of your policies should be remarkable. Not many companies do it.
Even though it’s hard to measure the ROI of our policy, we try to do it qualitatively. Anytime you have a program that’s hard to measure, make sure you’re sharing the remarkable feedback (you will get tons of it) across your company, especially from the bottom up, so management can see how it’s working!
Here’s one recent example (of thousands) of how a customer was taken aback by our return policy:
Thank you for your generosity. You are truly a unique company that I am bragging about. I purchased one shirt from you for my daughter. It was too small. My husband quickly ordered another one so that it would be here for Christmas. Unfortunately, it was too big. Ugh! We showed her the shirts on Christmas Day and she loved them. At 10 years old, she understood that it was the thought that counted. We told her we would get her the correct size. When my husband called yesterday to reorder and complete a return, he was shocked that you were so kind and generous. He quickly called me on my cell phone and shared the news with me.
Never in our lives have we done business with such a friendly and cooperative company. We will be sharing our story with our friends and family. You have blessed us.
your happy customers,
If that’s not return policy ROI, I don’t know what is! Thoughts?