Should your stores have a lifetime return policy?

| by Nandini Jammi
Should your stores have a lifetime return policy?

“I’m sorry ma’am, we can’t take those back.”

Those are words no customer wants to hear, and some retailers go to great lengths to make sure they never do. This is bigger than just a 90-day money back guarantee — it’s the lifetime return policy.

Businesses with a lifetime return policy allow customers to return their purchases anytime, even if they’re used and worn out. It’s a retailer’s ultimate statement of confidence. “We’re not just here to make a sale,” it says. “We believe so much in what we sell, we’d take it back.”

The benefits of the policy are obvious: customers perceiving less risk tend to buy more and make riskier purchases that they may normally shy away from. It’s also a major selling point against competitors who still have a standard 30-day return and exchange period.

What kind of a business places the entire risk and burden of a sale on itself? A business that counts on the lifetime value of its customers rather than a one-time transaction.

Here are three reasons retailers with these incredibly generous return policies are doing rather well:

1. They sell products they’re confident in.

You can return a half-eaten wheel of cheese at Trader Joe’s. In fact, you can return any product you don’t like for any reason, even if it’s been opened. This may seem like a consequence-free invitation to try and buy and return everything in the store, but that doesn’t happen. Why isn’t this policy a disastrous free-for-all?

Here’s the secret: Trader Joe’s only sells really good food.  

“We taste everything before we put our name on it and offer only what we feel is extraordinary. We tried it. We like it. If you don't, bring it back for a refund or exchange — no hassles." (From an interview in BusinessInsider)

This holds great value for Trader Joe’s, which needs a high level of trust from its customers to sell the steady stream of new, limited-edition and seasonal products that line its mostly private-label shelves. The generous return policy gives its regular customers the confidence to try and buy new items.

Key Takeaway:Offer consistently great products and services to gain customer trust.

2. They align sales with helping customers solve a problem, not just make a sale.

Nordstrom’s customer experience is centered around helping customers make the right purchase — and for good reason.

Sales associates at Nordstrom are paid on commission, which gets taken out of their paycheck if a customer returns their purchase. In other words, if a customer isn’t successful, neither is the sales associate.

“Our salespeople should never pressure a customer. After all, if you pressure a customer they can simply bring the merchandise back. If our salespeople offer expert assistance and help the customer feel good about what they are buying, for the most part, the customer will leave happy with their purchases," said Nordstrom spokesman Dan Evans.

And if they don’t? They’ll find plenty of post-purchase support at Nordstrom. Store associates might help their customers find a better item or simply make a return. “We want customers to love the items in their closet that came from Nordstrom,” said Dan Evans.

Still, the policy has proven to be well worth it for Nordstrom.

“I can tell you that on a yearly basis, our returns stay at about the same percentage of our business,” Evans said.

Key Takeaway:Focus on creating a better customer experience, not just making a one-off transaction. The experience is what brings them back.

3. They're clear about the parameters around their return policies.

Doc Martens offers a lifetime guarantee, but it’s very careful to protect itself from wanton return claims. The company’s policy is plenty generous, but it’s also imposes a clear set of conditions around it to prevent customers from abusing it.

Dr Martens For Life policy

First of all, the guarantee is limited to a single collection of its finest, ultra-rugged boots. The company will repair or replace any pair of shoes from its “For Life” collection for the “rest of your life.” In short, buying a pair of these boots means that you’ll never be without a pair of Doc Martens.

But the company also communicates the policy’s limitations very clearly:

  • Covers the failure of any component = manufacturing defects only
  • Gives them right to refuse = unreasonable wear and tear, used for industrial wear
  • Must register your details to activate guarantee

The company’s policy stops short from accepting any and every claim for a new pair of shoes. It covers manufacturing defects, but not unreasonable wear and tear. It covers the shoes for a lifetime, but not if they’ve been subject to industrial wear.

Why does this work for Doc Martens? Because they are very upfront about the limitations of their guarantee. Here it is, displayed prominently in plain English:

Dr Martens for life policy terms

Such a generous policy wouldn’t even be possible without these conditions. This helps the company protect itself from customers who would abuse the policy and continue to be generous to its larger customer base.

Key Takeaway: Lifetime guarantees can (and sometimes should) have limitations. Just be very clear about them.

(Photo by Anthony92931.)

Topics: Consumer Behavior, Customer Experience, Customer Service

Nandini Jammi
Nandini Jammi is Chief Storyteller at Kayako, which offers a cloud-based customer service platform and on-premise help desk and customer support software. wwwView Nandini Jammi's profile on LinkedIn

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