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Is your product return policy customer-centric?

April 10th, 2010

Back in February, 2010 I posted some thoughts called Moments of Truth (MOT).  Here’s another one that you might want to share with your clients and ask them whether their “Returns Policy” is working to their advantage.

I’m in Australia at the moment and I just returned from a visit to the Ballina’s Big W store owned by Woolworths (for the benefit of our readers abroad, one of Australia’s “leading” retailers.)  The experience I had was less than great.

Let me explain.

Yesterday I purchased a food steamer.  When I got it home and opened the box it was obvious that it had already been opened because the secondary wrapping was lying on the bottom of the box .  I noticed hat a critical part of the product was missing so I took it back to the store today and requested a refund.  This was a Moment of Truth. I was quite OK with the fact that the product was incomplete.  I was even OK with the fact that I had been inconvenienced by having to return it.  I wanted a refund rather than a replacement because I was not satisfied with the quality of the product after seeing it and sensing that the box had already been opened.

At that instant, things started to go downhill.  The store assistant who’s name was Ashleigh BTW, looked at the diagram on the box with her associate  and advised me that all of the components were in fact there.  I knew differently because I have several of these appliances and I knew how they work.  I told her that it was not complete and that I would like a refund at which point she advised me that it was “company policy not to give refunds when the box had been opened!”  In other words, even though I was not happy with the product that was now my problem because I had opened the box.  Unfortunately, I did not know I would be unhappy with the product UNTIL I had opened the box. Her associate went off and looked at the product display and discovered to her surprise (but not mine) that there was in fact a part missing. Ashleigh then told me they’d give me the missing part but could not give me a refund because of company policy.

I advised Ashleigh that I would like to speak to the store manager about it.  After a surly expression and some raising of eyebrows she advised her associate to get the store manager.  The store manager was not willing to come and meet with me (another MOT) which confirmed that s/he wasn’t really interested in talking with a customer but s/he must have told the store associate to go ahead and give me a refund together with a lecture on what the refund policy is and to advise me that “they will refund it on this occasion but next time they will not do so!”  So we have yet another MOT – this time a really bad one.

I said to Ashleigh that with the greatest respect I was not interested in being lectured on their store policy, all I wanted a refund so that I could get on my way and the Woolworths folk could get on with their work.  At that point she threw the box that the the appliance came in down on to the counter and proceed to process the refund.  All in all it was a very unpleasant experience.  I asked her not to be rude to which she responed with: “you are being rude to me!”  Wow!  What great customer service training they have in that store — argue with customers if you believe you are right!  Interestingly, it is the Coles-Myer Group (Woolworths direct competitor) that has been using Principa’s Towards Awesome Service training program with 20,000 of its team members.

Now let’s think about this for a moment.  In the US, where I live most of the year, if I’m unhappy with a store purchase for any reason from practically any store, and certainly from all of the major retailers, I simply take it back and a refund is processed immediately, without any questions or any unpleasantness.  If I don’t have the receipt they will give me a store credit.  The result of this “policy” is that I have no hesitation going back to that store over and over again to buy merchandise in the full knowledge that if I’m not happy for any reason the store will refund me.  In other words, the store understands the concept of risk reversal, the concept of the lifetime value of a customer (which in my case is several thousand dollars with Woolworths) and the power of a guarantee for building customer loyalty.  As a relevant aside, I also own several thousand shares in the company which I’m now considering selling because this returns policy does not auger well for long term growth in shareholder value.

Woolworths clearly do not understand these concepts.

The experience I had today is NOT Ashleigh’s fault.  She is simply following company policy.  The fact that the store manager could not be bothered to visit with me is appalling and probably reflects the culture that Woolworths has developed.  This is turn reflects top managements’ real view how to treat customers–a necessary evil.  After all, a fish stinks from the head down so responsibility for what a customer experiences at store level comes to rest at the foot of the CEO.

May I suggest that you talk to your clients about their customer service policies and perhaps pull out TAS as a catalyst to help then re-define the concept of customer centricity in their business.  People notice these things but they don’t necessarily make much of a noise about them.  They just don’t come back to the business  and an opportunity is lost.  The cost of lost opportunities (read lost customers and/or lost transactions) is one of the biggest expenses incurred by businesses and they don’t even realize it because there is nothing that shows up on heir P&L.

  1. April 12th, 2010 at 05:27 | #1

    For any business in a competitive environment, the extent to which you empower your team is a game winning strategy. It’s practically become cliche but the people at Southwest Airlines (one of the most consistently profitable businesses in the world!) understand the following fact “…the other guys can match our fares, our frequencies, our equipment, and our facilities–but to date, they have not been able to match our high-spirited, energetic, enthusiastic, warm and caring, customer service-orientated people.” It’s their spontaneous, “whatever-it-takes” to delight the customer that its team members exhibit consistently … I have never been told that “it’s company policy” … the only “company policy” that counts at Southwest is: delight the customer! And they do that consistently.

  2. April 10th, 2010 at 18:53 | #2

    Ric,

    Enjoyed the article – and even during “busy season”! This may explain, in part, why Woolworth’s “Five and Dime” can no longer be found on Main Street, America!

    As a “service provider” I know that I have to make a conscientious effort to remain visible to both existing and potential clients to remain their trusted advisor. Unfortunately, it is extremely easy to fall into the trap of being “too busy” with client work to continue feeding the pipeline. The cost of lost opportunities is too great when building a practice.

    Thanks,

    Ron

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