Refunds...Loss or Opportunity?
Refunds.......Loss or Opportunity?
I have been involved with Retail in some form or another for 41 plus years now, and the one thing that seems to remain a constant in the retail industry is the refund. But, how companies have handled it over the years has been a topic of hot controversy. So, I can only give you my thoughts from my perspective. For me, the refund is a real opportunity to turn that customer into a life long partner. And yes, I said partner, because I truly believe that retail in it's purest form is about relationships and for providing the needs of those who seek your services.
It is sad what I have seen and experienced over the years when it comes to refunds. Some companies that I have worked for had such onerous policies that it was almost more pleasant to go to the Dentist and have a root canal, while others make it a simple experience.
It is human nature to dwell upon the negative. Just look at the water cooler or other such gathering place in your business and just listen. Rarely is their anything positive been said and shared. Always some damming juicy tidbit.
What a wide variety of companies have done today is to take the actions of a few and make a broad assumption of behavior for the rest of the buying public. Most people have then as such become accustomed to a battle at the return counter. Don't believe me? Stand back and watch peoples behavior both their physical postures and their attitudes. Always on edge and negative.
What I have done with my customers is make the return painless and I will say that 9 times out of 10 I can find the real root of the "problem" and turn the refund into another sale. Maybe not at that exact time, but most will come back if you treat the customer with respect.
Remember how I stated earlier how retail is about relationships? Look at it this way. Treat the person coming in for a refund with a pleasant smile and an honest and sincere attitude. Since most store owners and business managers aren't directly involved in refunds, it is important to tell your staff how you expect them to behave and treat your customers. The other thing is to give the staff a wide berth when it comes to handling the refund. The person who does this should have the authority to make decisions on the spot rather than asking for a manager, which just raises up the tension if handled improperly.
Simple questions will help you find out what is wrong if anything about the product. Rather than asking what is wrong with it, (here you will rarely get an honest answer, i.e. they will tell you that it is not broken when it really is, so as to avoid that hassle). Rather do this. What would you like to do today? You would be surprised at how many people will say that they would another product, exchange it for another one but maybe in a different color.
See what we did their? You put control into the customers hands. Some of course will ask for a refund and you simply give them one. Store credit in lieu of a receipt is an acceptable policy. Having your store's refund policy plainly stated on a sign and on a receipt will help to alleviate most misconceptions. Although those one or two who want to make life difficult will claim they don't know. Simply smile, and make the refund.
Isn't it funny how you can have a great day at the shop and you have one or two people who can make the day difficult and that is all you remember!
Refunds are opportunities with a silver lining. How you handle that opportunity is of course up to you. Go look at your books, and you will see that refunds an incredibly small portion of your P&L. Want to make it even smaller? Try the suggestions above and see how you not only make refunding a non-event, but how you will actually increase your sales and more importantly long term relationships with your customers.