Black Friday and Cyber Monday have come and gone. Christmas is approaching. It’s the “sales season” for ecommerce. And just after the sales season comes the “customer service season.”
When I was an ecommerce employee for LivingDirect, a retailer, we sold compact appliances — air conditioners, icemakers, refrigerators, and the like. During the holiday season, we sold many thousands of wine refrigerators.
We would sell the appliances during the lead-up to Christmas. The gift giver would receive and wrap the item, and then on Christmas morning, the gift recipient would unwrap the gift, plug it in, and (usually) all would work well. But in a few cases, the compressor was damaged in shipping and we “ruined Christmas,” as customers told us.
Certainly we would replace the item and attempt to file a claim with the shipping company. But what if the item was purchased on Black Friday? By the time we attempted to file a claim, a month had passed. While UPS and FedEx typically honor delayed damage claims, freight carriers do not.
This example demonstrates some of the problems faced by ecommerce returns.
Ecommerce returns
How should an ecommerce store handle returns? Draconian merchants charge for shipping (both ways) and a hefty re-stock fee — 15 to 25 percent.
I’ve never seen a company entirely deny returns. If a company disallowed all returns, it would presumably be hit with so many credit card chargebacks that it could no longer process any cards.
Taking the hard line of charging shipping both ways plus restock fee is seductive in the short term — “I’ll make my customer pay for returns!”— but deadly in the long term.
Successful ecommerce depends on repeat business. It’s all about building a brand that customers can trust. And if you welcome shoppers on the frontend when they have money to spend, but screw them on the backend, you’re not going to have customers for long.
This brings me to the returns policy for FringeSport. When I founded the company, I had a simple three-step process for success: great products at great prices backed with world-class customer service. And world-class customer service, to me, required Fringe to be “the Zappos of functional fitness.”
Zappos famously offers a 365-day return policy. So that’s what we did at Fringe in the early days. Free shipping and free returns for 365 days. It worked well for a while. But as we grew, a few cracks started to show.
Abuses with returns
For example, an ad agency for Nike bought $3,000 worth of gear for a photo shoot. Then the agency took the photos and immediately returned all the gear.
We had a customer keep a full garage worth of gear for 11 months, then return it on our dime, and upgrade to a new kit. Then it happened again. And this started to be a semi-regular occurrence.
The final straw was when a commercial gym outfitted its facility entirely with our products and then returned it all nine months later.
Those experiences caused my mind to shift. I no longer wanted to be “the Zappos of functional fitness.” Instead, I aimed to be “the REI of strength and conditioning.”
So we changed the returns policy. We still support our customers but in a more limited way that allows us to stand behind everything we sell with the best return policy in our industry. But we don’t allow customers to return their well-used barbells after 11 months on our dime and with no restocking fee.
Revised policy
Here is our current returns policy.
- “We stand behind every customer and every sale.”
- “We only sell what we love to lift on.”
- “If you are unsatisfied with anything you bought from FringeSport, you can return it for any reason for a full refund within the first 30 days after purchase. We’ll even pay shipping to get it back to us!”
- “Beyond 30 days, we’ll accept a return within the first 365 days for a full refund provided the product is unopened in the original box.”
We still have our “crazy” return policy: For the first 30 days there’s free shipping, free returns, and no restocking fee. And we still have a 365-day returns policy. But after the first month, our customers pay return shipping, and the products must be new.
“We stand behind every customer and every sale.” That is important to me. It’s our mark of commitment to our customers. We also offer a trade-in program, and we’ll even help our customers sell our products used on their local Craigslist.
Our very lenient return policy is for not everyone. But it’s what our customers deserve. If you’re thinking about returns policies, consider how they could be a competitive advantage.
Our returns policy definitely sets us apart from all the rest.