I'm grateful to Murray Armstrong, President, Ace Hardware International, for writing the foreword to Making Money Is Not Illegal, Immoral, or Fattening. Murray knows international retailing.
In the foreword, Murray advises us about returns: "A customer will come into the store with an item to return, and the salesperson will treat the customer with suspicion rather than servicing the customer. 'Why are you returning this? What's wrong with it? The product wasn't like this when you left the store with it.'"
Then Murray writes about the importance of a policy on returns: "Include in this policy, 'We guarantee your satisfaction' and 'Your receipt gives you the right to return whatever you buy here.'"
Murray emphasizes that doing this isn't being soft in your business dealings. Keeping customers happy about a return results in many hard-currency customer return trips.
Yesterday, I took my grandson, Eli, to return a toy. I'd made the terrible mistake of selecting a Star Wars kit for him, not realizing Star Wars is so last year. When we entered the store, I was ready to give a long explanation and then wait for a bunch of paperwork to be completed. Instead, Lynn looked at the toy, checked my receipt, kept smiling, and said, "Would you like the refund as a gift card?"
Quick, painless, pleasant.
Holding the gift card instead of cash had an interesting effect. Hey, it was like free money. As the research about gift cards says, I found no problem spending more than the value of the card, increasing the profit for the store.
Of course, it didn't hurt that the upgraded purchase was for my grandson. He'd granted me wisdom suited to Obi Wan Kenobi: I now realize Clone Wars is where the action's at.
At least for him for this month.
This article is good at illustrating how uderstanding customer requirements (in this case, for a no-hassle return) is a key to excellent business operations. However,even though a no-question return policy may buy you greater customer loyalty, do not forget that if you are not going to ask, you will have to analyze sales and returns data to understand why the sale was not a good event for the customer. As noted in my book, "Management Strtegy, Creating Excellent Organizations," every excellent organization must identify customers and their requirements, and use this information as the center-piece of its efforts towards self-evalauion, improvement, and long-term planning. The excellent retailer has got to cover the whole field of play in order to come out on top.
ReplyDeleteRich Mallory
Mallory Management
rich@mallorymanagement.com