It’s seldom mainstream news, when a retailer changes its return policy. When venerable LL Bean did just that, it was. National media as well as the trade press noticed.
Bean, the direct marketer of camping and sporting apparel and its signature rubber-bottomed boot, had long defined a position of treating customers very well. This included a very liberal return/exchange policy of anytime for any reason with or without receipt. Founder Leon Leonwood (aka LL) Bean (1872 – 1967) was reputed to have said “no one ever won an argument with a customer.”
Back in the day, service at Bean’s flagship store in Freeport, Maine or from one of its mellow phone reps for catalog shoppers, was deservedly legendary. Case in point: I once ordered a set of bike panniers from Bean on sale. They were fine, but eventually one of the brackets, which attached them to rear rack, fell off. Some months later while vacationing in Maine, I stopped at the store to ask whether I could buy a replacement bracket.
The salesman looked at one of the panniers and left to do a few minutes of research. He returned, apologized that that product was discontinued, and without my asking (or expecting), offered me the full cash price and an apology.
That was then. A recent visit to a Bean store, is a different experience. The number of sales associates seems reduced and those remaining are seen neither as eager or knowledgeable as in days past. Gone is the free shipping on all items. Returns will be allowed only within one year of purchase, and only if the customer has a receipt.
Bean is privately held and does not release detailed financial statements. Estimates from Privco show less than 1% annual growth over the last five years despite increasing the number of domestic retail locations by a third (from 31 to 42). For Bean, sales growth has no longer been a walk in the woods.
Bean came to believe, not implausibly, that a number of customers were exploiting their return policy. For example, by returning merchandise bought from third party discounters for full price from Bean. In the face of no growth, they assume the tired strategy of squeezing expenses including returns. But at the expense of diluting their primary value proposition of exceptional customer engagement and service.
“Fraudulent” returns – return of merchandise not bought from the retailer or used for more than a trial period – can be a real problem.
The Wall Street Journal reports that some sellers, such as Best Buy, tightly monitor returns. They refuse to grant returns to customers, whom their system flags as being “excessive returners.” This can happen even if the return conforms to Best Buy’s stated return policy – with receipt, within 15 days of purchase, and unopened. Of course, Best Buy unlike Bean, was never known for customer service or customer loyalty.
What else could Bean do?
Rather than jeopardize its brand image and position and surprise customers by declining their returns, it could institute better sales tracking. Thus, if Jane Q. Customer chooses to return a pair of boots, its purchase would be available at any of their sales terminals. This is already common practice. Bean could brag about the new full year to return policy with no receipt required.
The news has event has by now been largely forgotten, but the underlying problem remains. Beans still needs to grow sales. This might start with revamping their rather tired and tiring ecommerce site. But that’s material for another post.