Everyone hopes that the products they buy will work or be exactly what they need but there are times when things just don't work out. We would just love to go and return the product for our money back or exchange it for a working unit. This isn't always the easiest process because of the various return and exchange policies that the retailers create. They claim it is to improve customer service by providing better pricing but generally they are there to cover the retailer's and manufacturer's costs.
Return policies are there for when a customer wishes to return a product for a refund or a different product. In general, there are three types of policies that a retailer will have when a customer wishes to return a product:
- Full returns or exchanges within a set time frame
- Returns or exchanges minus a restocking fee
- No returns or exchanges
The most common type of system is the one that includes a restocking fee. This was first implemented by electronics retailers and is a growing trend in the retail business. As margins and prices become smaller for retailers and manufacturers, the no return policy is becoming more common. The rarest of these is the full return policy.
So, why is it important to know the return policy when buying a product? Buying product from a retailer that has a poor return policy can result in a large cost to the consumer who wishes to return it, or even worse, being stuck with a product that they do not like or wish to own. This makes research into the product you buy very important as well as who you are buying the product from.
What exactly are restocking fees? Retailers generally put these fees on top of products that are returned because the items can no longer be sold as new. As such, they are unable to recoup any profits they may have received if the product were not returned. The restocking fees help recover these lost funds and also discourage renter customers who purchase a product for a set period of time and then return it just to try it out.
Restocking fees vary depending upon the retailer. They may only be charged for some products or only if a product is returned for a refund. The fee amount typically runs around 15% of the purchase price but be sure to check as it can range from 5% all the way up to 50%. Thus, a $600 computer system that is returned for a refund can result in a loss of $90.
Exchange policies may vary from the standard return policy at retailers. An exchange will happen either if a product is broken at the time of purchase or if the consumer wishes to get a different product instead. Often there is a time limit from the date of purchase as well. Once again, policies will tend to vary from retailer to retailer in each of these conditions.
For the most part, a product that is returned for exchange will be treated like a standard return. It will be subject to any restocking fees that the retailer might have. This means that returning a product for a different item will typically result in a net loss for the consumer. They end up spending more to get an equivalent product or resulting in a product of lesser value.
In the case of a defective product, most retailers will allow the product to be returned for an exact exchange. The reason is that they can return the product to the manufacturer as defective and have no net less. This is not the case on some types of products. For example, most OEM products are not allowed to be exchanged by the retailer and must be exchanged through any manufacturer warranty policy. This can add extended down time compared to a product that can be exchanged at a retailer.
Read The Fine Print
The important thing that consumers need to do is read the fine print whenever they are buying a product. Even though a retailer might generally have a favorable return and exchange product, a great deal may be on an outlet item that is exempt from the standard policy and have no returns. The fine print will also spell out any fees and conditions to any returns or exchanges on a specific product.
The fine print will also dictate any time frames that may come into effect with a purchase. This can have a huge impact, especially for products ordered over the internet. Generally a product is purchased when the order is placed, but the product may not be received for a week or more depending on the shipping. An internet retailer with a 14 day return policy may result in consumers being unable to return a product within that time window.
Items that are purchased as gifts can present additional problems. Most companies require that the purchaser return the item with their receipt. Retailers have now implemented new policies that require that gift recipients must have a gift receipt in order to exchange or return a product. Even with the receipt, the same policies may still apply to the gift recipient as it would if they had purchased the product. To make matters worse, many online retailers have no gift receipt system and this means that the recipient can't return or exchange the product. If you are purchasing an item as a gift, check for any additional retailer policies.
Research is Key
Because of the complexities involved in retailer return policies, it is extremely important that consumers have all the information before buying. This includes research about the product in question to make sure they are getting exactly what they want and expect as well as the return policies. A retailer that charges just a little more but with a better return policy may end up being the better company to buy from in the end.