January 4, 2010

Serving Customers Dumb Rule in Retail

There are still retailers out there that refuse to offer a refund when you return an article to them; rather they insist you get an in-store credit that can be used at a future date.

Why do retailers do it?
- To deter people from returning product. Which actually translates into ‘We really don’t care whether the garment meets your needs. You bought it. You keep it.’
- To prevent a short term cash flow problem. They don’t give the customer their money back. They take on a future liability when (and if) an article is eventually purchased.

This is a classic Dumb Rule as its impact on the business actually destroys customer value in the long run:
- The customer is annoyed because they have the hassle of returning the product.
- They are further annoyed because they can’t get a refund.
- They are further annoyed because in all probability they are unable to find a suitable replacement for their original purchase in the store at the same time the return is made.
- They reluctantly take the in-store credit and promptly tell others how upset they are and how rotten the service is at this retail outlet.
- They are really upset over the fact they have to go elsewhere and purchase another product.
- They will have to essentially pay twice for what they want at least until they use the credit at some time in the future.
- They leave; come back to use the credit and never return.

The retailer removes any possibility of repeat business and with it the longer term revenue annuity stream.

As well their serving customers reputation goes in the tank.

How can this be good for them? It can’t.

Fortunately this type of Rule is used less and less as businesses wake up to the fact that the customer drives the business and if they don’t treat people they way they want to be treated the organization will pay the ultimate price.

Cheers,
Roy Osing

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Related Blogs
Serving Customers NOT Providing Customer Service
The Four Steps to Dazzle Customers
Kill Dumb Rules
Bend the Rules on behalf of the Customer

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Posted 1.4.10 at 07:57 am by Roy Osing | Read Comments (0) | Leave a Comment