I recently received an email that is being circulated around the web about the 15% restocking fee at Best Buy in the US (Best Buy Canada does not charge this Restocking Fee). I thought it raised an interesting point about serving the organization versus serving the customer.
This particular customer was upset because they had been required to pay $45 to return a GPS when they decided to return it in favour of another brand. They were further angered because since the amount was over $200 and they had paid cash, they had to wait for a cheque to be issued from head office in 7 to 10 days.
When Best Buy US was contacted, they confirmed that when certain non-defective items are returned (i.e Notebook Computers, GPS, Digital Cameras, In-car Video Systems, etc.) they do deduct a 15% restocking fee. Their rationale is that people might borrow these items, use them and then return them to Best Buy like a lending library. The restocking fee is to discourage people from purchasing items before a weekend, special event or trip and then returning them afterwards.
Resultant, the store ends up subsidizing this customer because they now have an obviously open package, potentially causing future buyers to avoid purchasing unless discounted. Their basis is that this way the customer who "changed" their mind bears some of the loss associated with this opened product.
When you compare this policy to some of the stories we hear -- returned tires at Nordstrom when they don't sell tires, or fur coats from Macy's used for a weekend benefit ball and returned -- you can clearly see the difference in their customer-focus.
While I don't agree that customers should take advantage of companies who put customers first, I think we must consider what message our policies are sending. For example, do we insult 99% of our customers with a policy of no more than 3 items into a change room to prevent the 1% who is intending to steal?
Have a look at your policies and ask yourself -- are they for the organization, or are they for the customer? Something to think about!
Cheers!
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2 comments:
Something that many consumers don't realize is that there is a cost above and beyond restocking that retailers are absorbing when the customer changes his or her mind. Almost all consumer purchases are made with credit. Processing charges to retailers for having the ability to take your credit card range anywwhere from 2 to 5 percent of the transaction, depending on the card (Visa, MC, AM/EX) and whether or not your card has special offers attached to it (miles, cash back, etc.) Assuming you paid by CC and then wanted a refund to your card, the costs to the retailer for basically a no sale are 4 to 10% of the purchase price. Many small retailers can not stay in business giving up ten dollars for every hundred dollar return that is non-defective. Keep in mind that there are also costs associated with marking down the product after return, or total loss if the product can not be re-sold. Its nice to be able to offer a no-hassle return policy, but it is often abused by a select number of individuals that necessarily raises prices for everyone to cover costs the consumer never thinks about.
I bought a $300 Eee PC 900A (Linux version) last week. I got great customer service from several staff at Best Buy. I visit this particular store rather than a nearby Circuit City since the service is far better. I am a regular customer who often recommends their products to friends and family.
Within a day of using the Eee PC at home, I realized that the particular model I bought had a design flaw which made it essentially inoperable very soon after initial setup. The specific flaw is that the 4GB solid-state drive completely fills and there is no way to free enough space to keep the system running properly. Eee PC tech support suggested I either install a different OS on the machine, or else return the product to the store.
I decided to return the product, since I felt that Best Buy had acted in bad faith by selling me a computer which would not function without significant technical skill to reconfigure it. I fully intended to exchange it for a similar model which did not have this flaw.
When the store did not have any similar models in stock, I requested a full refund, fully intending to buy a similar model when it became available at this store. The store manager refused to refund my purchase unless I paid a 15% restocking fee on the defective product (he did not agree it was defective, but neither he or his tech had any technical basis for that opinion, and neither had any experience with either this model or the Linux operating system).
The manager and other staff continued to argue for one hour, suggested that I should have known better before buying the computer initially, and claimed that I was not a regular customer since my phone number did not show up in their systems. At the end of the hour, the original clerk I brought the return to announced that "Corporate" had put the return through and waived the fee. How "Corporate" even knew about the situation was not explained. The manager, thankfully, chose not to override Corporate's decision. I asked him to remove the remaining defective product from his shelves. He told me there were no others left, but this was later contradicted by another supervisor.
It's beyond me to understand how a manager could consider it to be good business to alienate a good customer in order to collect a $45 fee.
I will be writing more about the situation on my blog over the next few weeks, as well as filing several letters of complaint with Best Buy.
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