Legendary Returns

Most people in the retail business have heard the lore of the tire return at Nordstrom. Even though Nordstrom is a high-end department store that has never sold tires, they accepted the return in order to please the customer. Although there were some odd circumstances, the tale is nevertheless true and serves as an important example of going the extra mile for the customer.

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Another company with an impressive return policy is Costco. They used to take anything back anytime, but in 2007 found it necessary to limit electronics to 90 days. Even so there are always limits, as this story explains. But I have a story of my own. My neighbor's treadmill finally broke after 4 1/2 years of above average use. He ordered parts to repair it, but when they arrived he found they didn't fit. On a whim he explained the situation to Costco, where he originally bought the treadmill (and still had the receipt), and they offered to refund his money. Although he subsequently used the refund to buy another treadmill from Costco, Costco lost money on that deal but retained a very loyal customer.

The NRF estimates retailers loose about $9.6B yearly from fraudulent returns, so retailers must find the right balance between customer service and loss prevention. To help, many are using software that tracks returns so they can detect fraud, limit abuse, and most importantly -- take care of their best customers. (For example, consider Oracle Retail Returns Management.)

When I recently went shopping for deck tiles for my patio, I chose to pay a little extra at Costco for the security of a good return policy. Sometimes the return policy can actually make the sale.

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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