'Tis the Season for Returns
By David Dorf on Dec 30, 2008
Now's a good time to return that pink bunny suit (aka the Pink Nightmare) your aunt bought you so that you can instead buy the Red Ryder you've always wanted. Now is the time when the gifts gone wrong are made right.
I have a friend that bought iPod drumsticks in late November for Christmas. When his daughter finally opened the gift, they found that one of the sticks did not work. Unfortunately Buy.com's return policy is for 14 days, so he had to exchange many emails and phone calls to get them to relax the policy. In November the NRF said that 52% of surveyed retailers planned to relax their return policies for the holiday season. For example, Amazon.com modified their return policy:
Items sold by Amazon.com and shipped between November 1 and December 31, 2008, may be returned until January 31, 2009 for a full refund, subject to our other returns restrictions.
That's good customer service. (Speaking of good customer service, shortly after Christmas I received an email from Amazon.com thanking me for my holiday purchases and giving me a $3 credit to download music. I used the $3 and found an album I also wanted -- a win-win promotion.)
Creating a return policy that promotes good customer service but also prevents fraud is a tough proposition. I think the only good policy is one that's flexible. Retailers need policies that are dynamic, taking the customer, the product, and the situation into account. This used to be the domain of the store manager, but emotions and prejudice can get management into hot water quickly. A better approach is a scientific scoring mechanism based on policies and rules assessed in real-time.
Return authorization software that's directly connected to the checkout can reward the best customers by accepting returns out of policy and penalize those customers that habitually return products. Its all about mining the data to determine the right decision free of bias.