Refunds, exchanges and returns: For business, it’s not just customer service

For the business owner:

In the marketplace where millions of transactions are made daily, a fair refund and exchange policy is an effective sales tool as advertising, promotion, and merchandising. By taking constructive action, a business can turn customer discontent into greater customer loyalty.

Successful retailers agree that, in the long run, business profits are tightly tied to the company’s ability to satisfy the customer. While a store may take the stance that all sales are final, such as, the desire for good customer relations generally dictates that an exchange or refund program be in effect. Following are some useful guidelines for setting up a system to handle refunds, exchanges, and returns.

Company management first must decide on a refund/exchange policy. In making this decision, consider the company’s suppliers and their “take back” policies, manufacturers’ warranties, and service center set-ups. State and federal laws also enter the policy picture, and the laws should be checked out with your company attorney. When finished, the detailed policy probably will be a blend of policies; yours, the suppliers, and the laws that govern refunds, exchanges, returns, warranties, and service contracts.

Although the “blend” mentioned above sounds complicated, your policy should be reduced to its simplest form so both company employees and customers quickly and easily understand it.

A “No Quibble” or “Satisfaction Guaranteed or Your Money Back” policy is ideal. This may not be possible in your business, but the policy should be kept simple, understandable, and as consistent as possible.

Use your policy in advertising and post it in your stores for everyone to see. Print it and use it as a bill stuffer from time to time. Not only does this remind your customers that they can count on your company, it helps prevent misunderstandings from arising and can help resolve them when they do occur. Many retailers set aside a special area or station to handle bring-backs and make it accessible to customers.

It is important that employees be instructed to stick with the policy and not make oral promises as to exchanges, returns, refunds, and warranties that are inconsistent with the policy.

Do instruct employees to remind customers to save receipts should merchandise need to be returned. This procedure is often done at the check-out counter by a cashier, although salespersons store wide also should mention receipt-saving if, in the employee’s judgment, an exchange might be possible. Whenever possible receipts, themselves, should carry information on your refund and exchange policy.

Better Business Bureau’s role in consumer complaint handling

Most business owners know that not all customers will be happy with an exchange, return or refund policy. As such, accredited business owners have the optional support from the Better Business Bureau.

Recognizing that consumer confidence is basic to the health of the American marketplace, one role of BBB is that of an unbiased third-party seeking voluntary resolution of legitimate consumer complaints.

BBB’s policy is that consumers first must attempt to resolve any dispute directly with the business involved. If then the matter cannot be resolved, BBB will attempt to bring about a resolution using conciliation and arbitration techniques.

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1 Comment

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One response to “Refunds, exchanges and returns: For business, it’s not just customer service

  1. Mark Burrows

    Wait a minute, isn’t this what I have been preaching all along? I’ve explained before that some of the big box stores have policies where they advertise a no hassle return system, but when you do return it, they ding you with a repackaging fee or a fee to put it back on the shelf even if the shrink wrap has not been removed.
    Now, I have contacted manufactures and inquired if they charged their distributors a fee to return units to them for evaluation, product testing, and benchmarking and then repackaging. I have not yet found a manufacture that said they would do such a thing.
    They restore everything back to factory standard after the testing, and repackage it as new if there are no physical markings or indentations. If there are scratches to the surface, a new shell is not a problem. They have these service centers set up in thousands of cities world wide with all the certified parts and packaging materials, and are paid by contract directly by the manufacture. It is cost effective and fast for putting things back on the shelf for sale. Ironically, they are conditionally superior to units coming off the factory assembly line where they only test a few units for every allotted batch where they stop everything then test all the automated systems along the line and then start a new batch allotment.
    So, a unit that has been put back into the sales as new, after being tested by an authorized manufacture service center has gone through every testing protocol and if there was any fault found it was either corrected or the unit was reduced to parts and sent back to the manufacture.
    So, from my understanding, unless a store is selling grey market products, not an authorized dealer, or selling on the basis of purchasing from a wholesale store and not the authorized distributor, any business should never have a problem standing behind refund or exchange policies. They should be able to send the product back to the distributor for replacement.
    I have also stated often that people are starting to find their way back to the smaller business, the people who truly stand behind what they sell, stores that recognize you when you come in. Small business depends on loyalty and although they can’t compete in the price department, they can succeed in the humanity department.
    They will knock of a few dollars if you want to banter a little, but keep in mind that often the sales staff in small business are on commission. The big stores get a wage, that’s why there is never anyone around to help you. They get increases when they show results, but when they hit the top of the pay scale, that’s it, they hide, let the new guys run around, but unless they get bored and quit, there are no new guys. So your purchase is between you wandering around and lining up at the sales counters with the other customers with vacant looks on their faces not sure if they bought the right thing or not.
    I challenge you to find the BBB sticker in the windows of these big box stores. If you do, I know I won’t be happy about it.

    Mark Burrows

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