To Return or Not To Return: A Puzzle of Consumer Behavior

[HawaiianShirts]

I was moving some product around Saturday at my store (because that's what I do when the department becomes disorganized, which is any time a particular co-worker is there). I noticed something on one of the monitor boxes that I've seen before but never really thought about. It was the sticker that said, in effect, "Call us first."

I'm sure everyone's seen them before. You buy some new electronic gadget or piece of self-assembly furniture, and either on the outside of the box or on one huge piece of paper inside, the manufacturing company says: "We're here to help! If something is missing or if the item inside this box doesn't work, DON'T TAKE IT BACK TO WHERE YOU BOUGHT IT FROM, call us instead!" Then they list their phone numbers and might suggest how they could help.

Now, I'm not arguing with that idea. It should suggest to the customer that a problem with the product is more likely the manufacturer's fault, not the retailer's. But I wonder:
1. Why do they make such a request of the customer? Would it not be easier to just let the retail stores deal with returns?
2. Do customers EVER pay attention to it? From the rate of returns and exchanges in my store it would certainly appear that they don't.

Any thoughts?

[DannyboyO1]

Last item I had something like that on was a video card from Best Buy. There are plenty of good reasons to try and handle all claims in-house. It keeps the retail store from getting accurate figures on your failure rates. There's no refund given that way, and accountants are always happy with that...

But it doesn't work. Simply put. Because it does not go far enough.

I had snagged this snazzy card so I could run Bioshock. And it was just plain time for an upgrade. No big deal. 'cept, after an hour or so, it'd start giving artifacts and screwed up color tables, continuing after the program was shut down, but going away on reboot.

Doesn't take a genius to determine hardware issue. I spent the next day upgrading power supply, and then doing temp diagnostics until I caught the VPU failing when WELL within operational limits. Called the MFG as the box said, talked to their reps, ran down the diagnostics, and repair attempts.

"Yes, that sounds like our hardware is the only thing left. We'll happily get that replaced, just mail us that one and as soon as we recieve it, we'll send you the replacement."

"So. I have to pay for shipping?"

"Yes, we're not required to reimburse for shipping." Legally true. It's considered the equivalent cost of driving the thing back to the store.

So I drove it back to the store, for the same cost of driving to the adjacent fedex place, but minus the postage.

Honestly, I was willing to work with them just because they asked nicely... but asking nicely isn't worth $10 shipping and 2-3 weeks turnaround on a replacement unit. Especially when the sum total of my experience with them at that point was a faulty VPU.

[trunks2k]

Now, I'm not arguing with that idea. It should suggest to the customer that a problem with the product is more likely the manufacturer's fault, not the retailer's. But I wonder:
1. Why do they make such a request of the customer? Would it not be easier to just let the retail stores deal with returns?

Because it costs both the retailer and the manufacturer some amount of money to deal with returns most of the time. If the retailer sends back a perfectly good product as defective because a customer said it was, then the manufacturer has to spend money to spend money to process the "defective" item. Its cuts costs and the middle man to just have the customer call directly. It's cheaper to send a replacement part than to get the whole thing back, put in the missing part, repackage it, and send it out again. Also saves the retailer from selling back opened products at discounted prices.

There's also the more nefarious purposes of hiding failure rates. But that sort of thing would depend on the manufacturer I would suppose.

2. Do customers EVER pay attention to it? From the rate of returns and exchanges in my store it would certainly appear that they don't.

Any thoughts?

I doubt they do. I'd bet most people will just return the item if they can't get it to work or it appears broken to them rather than try to resolve the issue with the manufacturer.

[dougall]

Speaking as someone from the UK I would always return as the retailer is responsible for that sort of thing under the The Sale and Supply of Goods to Consumers Regulations 2002.

(yes I just googled that)

[marasbaras]

I'm a native English speaker and reader ... so, I have little trouble understanding those sheets. I ignore those sheets. If hardware comes faulty, the store WILL replace it for me. After I blow $400 on a video card, I'm not waiting 2-3 weeks so that I can use it.

And, yes, something similar happened to me.

[Rapscallion]

Speaking as someone from the UK I would always return as the retailer is responsible for that sort of thing under the The Sale and Supply of Goods to Consumers Regulations 2002.

Yup - the UK is quite clear in that the contract of sale is between the retailer and the manufacturer. Unfortunately, this isn't the case in Americalandia.

Mind you, I'm in wholesale, so that's another different ball game

Rapscallion

[Irving Patrick Freleigh]

Company policy at my store regarding opening boxes of furniture to replace defective parts states that we must then hold the item we took the part from in the backroom, call the company to have them send us the missing part, put it in the box, seal it back up and re-sell it.

We never follow this policy. If we open a box to get a part for the customer, we defect it and send it to the DC.

Nobody from corporate or the manufacturer has ever complained.

[Naaman]

Speaking as someone from the UK I would always return as the retailer is responsible for that sort of thing under the The Sale and Supply of Goods to Consumers Regulations 2002.

(yes I just googled that)

Depends. We recently got a new washer\dryer delivered from a major retailer it had the "Call us first!" leaflet in the manual pack. Something went wrong with the belt after a week and a half so we called the number and had an engineer out in 2 days, booked as a 'first call'.

Exchanging it would have taken a week if we wanted to get it picked up (and a refundable pickup charge) or same day if we could cram the thing into the car (we couldn't).

[Andara Bledin]

It depends on the item, really, and how quickly I want to be able to use it.

I went directly to the manufacturer over a defect in a monitor on behalf of my company. They were local, and getting an RMA was easy, and we could send a driver out to do an exchange. Actually, we ended up doing that nearly half a dozen times because the problem was a design or materials flaw. They were very accommodating. Since the item had been mail order to begin with, dealing with the manufacturer was preferable.

For most items, however, it's much easier and faster (and sometimes cheaper) to simply return to the store for a replacement.

^-.-^

[SpyOne]

1. Why do they make such a request of the customer? Would it not be easier to just let the retail stores deal with returns?
2. Do customers EVER pay attention to it? From the rate of returns and exchanges in my store it would certainly appear that they don't.

Any thoughts?

I think I can explain that pretty well.

Answering the second question first, the reason most people return the product to the store (and get a replacement) is speed: if you are missing a part, the manufacturer will ship you one that may take several weeks, but if you go back to the store it is just minutes/hours. Even if you wait until the next time you are going to that store (a week?), you still get it fixed faster.

Here's why the manufacturer wants you to go to them instead:

You bought a barbecue grill and one of the parts that is painted in heat-resistant enamel is dented, and the paint is chipped. One of two things is about to happen:
A) you write to the manufacturer (or call their 800 number, or whatever), and they send you a replacement part. This costs them their cost for that part, plus shipping.
B) you take it back to the store and get another one, or they let you take an undented part out of one in the store. Either way, the store is going to return the one with the dented part to the manufacturer. Now the manufacturer is out the entire wholesale cost for one complete product (and may have had to pay the store back for shipping). They have the product in their hand, and with a replacement part it is good as new, but it cannot be sold as new. So, they'll get less money reselling it as "reconditioned", where they'll have to offer another price break because they don't have a lot of them to sell.
That is, they were getting $60 a unit for them wholesale (and the stores charged $99), but that was because they were providing thousands of units to the store. The reconditioned ones won't sell at $99, and the stores buying them probably won't offer 60% of the lower retail price because you don't have hundreds of them to offer, you have 41.
So, they have to refund the $60 originally paid for the unit, then sell it for maybe $40, so they lost at least $20 on the return. All for a part that retails for $5 (and really costs much less) and about $3 in postage.

And that's why they all ask you to try to handle it through them, rather than return it.

Not to mention the large percent of returns that are caused by customer ineptness: there is nothing wrong with the product, but the customer couldn't make it work. So the manufacturer loses mone (as above) over something that could have been fixed in 5 minutes on the phone. "No, sir, you have that part in upside down. Just turn it over and everything should work fine."

[Irving Patrick Freleigh]

1. Why do they make such a request of the customer? Would it not be easier to just let the retail stores deal with returns?
2. Do customers EVER pay attention to it? From the rate of returns and exchanges in my store it would certainly appear that they don't.

Don't know the answer to number 1, but I do know that next to none of my customers pay attention to it.

Today again I had to dig through a big boxed dining set to retrieve a chair crossbar for a customer who had a cracked one.

If I take an outside call for furniture and it's somebody wanting us to open up a new item to exchange a broken part, I always mention the number in the manual and ask them to call it. This usually elicits one of two responses:

1. Strategic silence, in which the caller falls silent hoping I'll tell them what they want to hear, or
2. Say something like "Oh, so you don't stand behind the products you sell?" or some such thing. Inevitably I have to give in and tell them to just bring their damn part for a replacement.

I forgot to mention that a few years ago I ended up having to go compactor-diving when a customer suddenly discovered she had a bunch of broken parts for some furniture item she purchased.