Why... Do We Return?

Retailers are getting fed up with increasing return rates for their products.  Widescreen TV's bought just for the Super Bowl and then returned.  Computers, books, appliances... you name it.  Even my wife will bring home several pairs of jeans and return all but a couple (after some gentle prodding...).  It costs the stores quite a bit of money to receive and restock the items, especially if they can no longer be sold as new.

So they are beginning to fight back.  The first salvos were in the form of strict policies on certain items, especially electronics and software.  Some retailers simply refuse to accept returns for any reason besides defects, and some have gone so far as to maintain and share lists of customers that habitually return products.

That's one approach.  One that, in lean manufacturing terms, focuses on the customer instead of the process.  An increasing number of more savvy retailers are trying a different tact.  Instead of blaming the customer (who could remain a future customer if treated right), they are probing the process.  Why does the customer need to return the item?  Apparently actual defects are a small percentage of the problem.

The U.S. electronics industry last year spent about $13.8 billion to re-box, restock and resell returned products, according to a study by technology consultant Accenture Ltd. Especially galling to manufacturers is that many returns are preventable: Only about 5% of returns were because a product was truly defective. Instead, most consumers give up on products for other reasons, such as the device being too confusing to use, the study found.

And those enlightened retailers then probe deeper, and come up with some innovative solutions that improve the customer experience.

Some manufacturers, including TV maker Vizio Inc., have begun including more information on packaging to help consumers avoid buying the wrong products. Other companies such as Seagate Technology are replacing lengthy instruction booklets with simpler guides to get users up and running faster and with less confusion. And a few companies, including retailer Best Buy Co., have set up consumer concierge services, sometimes for a fee, to resolve complaints before customers have a chance to return the product.

Of course then there's still the method to effectively render an item unreturnable except if defective...

Sony has taken a different approach with some of its products that makes it harder for consumers to bring them back. The company in 2006 added an option allowing consumers to engrave their name or other message on a Vaio computer. It expanded the program to its digital cameras last year. Sony says the program was started to let customers personalize products, but a side benefit for Sony is that engraved products can be returned only because of defects or other reasons that are the company's fault.

Return rates on engraved Sony Vaios are negligible, compared with about 5% for non-engraved PCs, the company says, saving more than $1 million so far. "I have a feeling that people are understanding the condition that you can't return it," Mr. Abary says. "But also once they have engraved it, they feel like it's a part of them."

Well, ok.  I'm still dubious as to whether that's a good thing.  But the bottom line is that it pays to ask "why?" a few times and focus on improving the process... not alienating the customer.