Our Returns Policy provides customers with information on how to request a Return Merchandise Authorization [RMA], how to return a product, etc. One of the most overlooked sections in our policy is our “Basic RMA Policies” which states that “returns must meet all applicable criteria”. It later goes on to say: “RMAs must be valid, unexpired, and issued for the product being returned”. We then go on to explain timeframes and acceptable shipping methods.
Recently a customer returned an item that was received incorrectly, but exceeded our approved timeline, and so their return was refused. I was later asked to review the customer’s RMA and rethink our set timeframes and associated policies in order to improve in the area of customer experience. In an effort to see where we stand as opposed to other major retailers I began to review our returns criteria and compare it to that of others. According to consumer world we are more consumer friendly than most of the major retailers reviewed. This brings me to my next point…
Where do we draw the line between our company responsibility and that of the customers’? As I reviewed the RMA it was clear that we did all we could to get the item back. The customer requested an RMA, and in less than an hour received an acceptance email informing them to refer to our Returns Policies before returning the item. The next morning the customer was sent a return label so that they would not incur return shipping costs [which was never used]. Exactly a month after the accepted RMA email was sent to the customer, they returned the package, which was refused by our warehouse. It is the customer’s responsibility to get the product back to us within the specified timeline, and it is our responsibility to do the best we can to help customers with that process.
It is important to note that if the customer had called our Customer Service department to inform us that they were late in returning their item, the RMA may have been approved for return despite the required timeframe. We strive to give our customers the best experience we can offer. However, there are times when all we can do is assist our customers, and let them do the rest. We will be reviewing different ways of improving our RMA timeframe; for now we hope that customers will understand that we want to help them as much as we can, but in the end we can only help them as much as they allow us to do so.
I encourage feedback and comments from others dealing with similar issues. When should we meet the customer in the middle and when does it become completely unprofitable to do so? According to Maxim Mironov’s Optimalogica blog “1 % returns costs you 0.45 % of sales”. What is even more interesting is the question he then poses “On $10 million sales 1 % returns increase means $45,000 lost in costs. At 4.5 % margin to off-set this loss you need $1 million extra sales. Are you getting this much because of a nicer policy?” While these numbers may not match ours perfectly it is good to understand that even with a good returns policy we aren’t able to make everyone happy. We just have to decide if that is something we are ok with and if the dollars make sense.