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Jewish World Review March 28, 2001 / 26 Adar, 5761

Richard Thompson

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Consumer Reports


Dishonesty about returns can hurt consumers, too

http://www.jewishworldreview.com -- YOU'RE at the returns counter with the DVD player that you bought the other day. The sales clerk asks why you want to return it. What do you do?

You lie, of course.

So, instead of admitting buyer's remorse or that you didn't understand how to program it, you say the product doesn't work.

No harm, no foul, right?

Wrong, say retailers and manufacturers.

Since 90 percent of the consumer electronic products returned are not defective, telling the truth can help reduce costs for retailers and manufacturers. If they knew the real reason behind the returns, then they could improve the shopping experience and perhaps even ultimately lower prices for consumers.

The tricky part, however, is finding out why without scaring away the customer.

That was part of the focus of the Reverse Logistics Executive Council held this week in Memphis at the FedEx World Technology Center. More than 20 people were in attendance representing Sears, Kmart, 3Com, Philips Consumer Electronics Co. and FedEx Corp.

The council is a not-for-profit organization that holds three focus group-style meetings a year where manufacturers and retailers can share ideas about processing returned merchandise, among other things.

Without question, the returns process is important. If consumers couldn't return a product, they are less inclined to buy.

According to the Yankee Group, returns exceeded $1 billion this past holiday shopping season.

While return rates vary depending on the industry (ranging from 10 percent to 35 percent), getting those products back from consumers can cost companies a lot of money.

Tony Sciarrotta, director of returns management at Philips, said the $2 billion company processes about $100 million in returns.

Manufacturers are turning to the retailers for help. They want retailers to ask consumers more questions at the returns counter, not necessarily to find out what's wrong with the product, but to gain more experience with the returns process.

Some retailers are resistant to the idea. They don't want to risk coming off as pestering a consumer who only wants to get his money back or a store credit.

So manufacturers and retailers have to find another way to figure out why people return products. Holding focus groups is one solution, but how do they go about getting participants?

Retailers know who return products, but Sears, for instance, considers using customer data to find participants to be a violation of a "sacred trust" of their consumers privacy, said Clay Valstad, Sears manager of central return operations.

Richard Thompson writes for The Commercial Appeal in Memphis, Tenn. Comment by clicking here.

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