|"bullet-proof" return policy?|
My distributor charges a 15% restocking fee for non-defective items, which is not unusual. In order for me to recover my "free" shipping expenses, as well as other costs, I've raised the restocking fee to 18%. It's all very clearly stated in my return policy.
This doesn't stop customers from saying that they refuse to pay the restocking fee, though, which means that I either beg the distributor to waive the 15% fee or I wind up paying for it myself. And, of course, the credit card companies side with the customers.
Is there any language in a return policy that's "bulletproof," leaving the customer no choice but to pay the restocking fee?
Thanks for any reply.
The reality is that you're always going to have people that don't agree with your restocking fee, whether or not they know about it. You may have to change to your process, so that the customer is forced to pay the restocking fee before they're allowed to send the product back.
[edited by: lorax at 11:06 am (utc) on May 20, 2009]
[edit reason] no link requests please - see Charter and TOS [/edit]
Without it, you don't stand a chance standing up to the credit card companies. With it, you still don't have much of a chance, but at least it's a slight improvement over 0%.
I don't think written language is really the problem. In fact it is quite clear. The problem is that some customers will say something is defective when it's not in order to avoid the fee. There are several options:
If you don't believe them you can have the item sent back to you for a personal inspection.
You can have the item sent back to the manufacturer. Here you are allowing them to do the inspection for you and you need to accept their decision. Wanting a refund rather then a replacement is usually a sign that the item is not defective, but they are returning it for other reasons.
If it's not defective then a restocking fees applies, unless you choose to waive it for reasons of your own. It falls upon the customer to prove it was defective if push comes to shove.
Customer issues defective chargeback -> you respond saying it was inspected and not found defective -> chargeback is reversed -> customer has option of court to prove the item was defective.
All this jazz about the credit card company always finding for the customer no matter what they say is hogwash, in fact I have found them to be extremely fair.
from a customer standpoint, re-stocking fees suck.
unless you get a ton of returns, i would eat the fees.
i think they are necessary for some products that are commonly abused/returned, but for most items i think it sucks (for the customer)
If your margins are that tight, you might reconsider offering free shipping.
We offer free shipping, but the average cost of shipping is approximately 5% of the total sale. For us, the benefit of offering free shipping outweighs the risk of eating those charges on returns-but it doesn't for every business model.
You could try a hybrid-like $5 shipping on all items within the US.
Shipping in and of itself isn't a big percentage of costs, but 15% of the wholesale cost of an item is, given that my profit margin is usually 10% or less. That means I need to make 1.5 or 2 more sales to recover the restocking fee on a single sale.
What I've been doing lately when a customer refuses to pay the restocking fee is have him send the product directly to me. I then hold it until someone else buys that item. The problem now is that sales are starting to slow with the summer weather, and I'm having to sell some of the more expensive items at cost on some online forums.
In the end, it's all about keeping the customer happy. I just wish they'd consider that the lowest price comes with certain downsides, but they want it both ways.
Also depends on the location. Here in the UK I'm pretty sure re-stocking fees are illegal.
|I just wish they'd consider that the lowest price comes with certain downsides, but they want it both ways. |
So very true. Maybe you could offer a 10% "order cancellation" insurance at the time of sale. Like vacation insurance when you buy plane tickets.
I don't give them a choice about the restocking fee...it comes out of the credit. No credit is EVER issued until the merchandise is returned to our warehouse (save where the manufacturer has OK'd a field destroy). If the product is not in 100% resellable condition, we ship it right back to them and provide them with an explanation of why credit has been denied. ...and then I start preparing my case for the chargeback. So far, I've won 5 chargebacks this year and lost once (to AMEX, but they have no regard for merchants anyway).
Usually, if I explain the necessity of the restocking fee, they understand. I tell them that it takes considerable time and energy from my warehouse to process returns -- they have to receive the product, check to make sure it's what was actually shipped and is resellable, return it to inventory, etc. This process costs money, on top of which we have lost the profit from the sale. Therefore, if you want our time, you have to pay. No business can/should allow customers to carelessly waste their time; we exist to make a profit and need to feed our families. If you can't respect that, we don't want your business. Plain and simple.
|In order for me to recover my "free" shipping expenses, as well as other costs, I've raised the restocking fee to 18%... |
You may change the wording and see how it works.
Offer free shipping if product stays with customer. If product is returned in resalable condition, the purchase price, minus 20% shipping and handling fee, will be promptly refunded.
@ HugeNerd... I like your policy and thoughts!
Our returns policy is easy. Before you return something, you have to pass through our automated returns procedure to generate an RMA... at which point the client must agree to our 15% restocking fee, otherwise, the website won't generate an RMA number, so they cannot return.
I'm not trying to sound pompus in my processes. In fact, I run a small business with only a handful of staff and rarely get returns. But why shouldn't you charge a restocking fee? I have had to pay 2% in card fees, shipping fees and a few £££ worth of packaging (which is probably too battered to use again). If they want to waste my time and money, I shall waste theirs....
...and on the phone with a customer, NEVER mention restocking fees (or refunds minus shipping) unless asked....you're just setting yourself up for problems.
Get the items shipped back to you, then deal with it.
Process it, issue the credit, end of story. Worst case scenario they file a chargeback for the difference - which seems to seldom happen.
Otherwise, they end up doing a chargeback WITHOUT even returning the merchandise.
In the UK its not an option - if you sell mail order to consumers your customer has 7 days from the day after receipt in which they can return for ANY reason and you must refund the full purchase price including shipping and cannot charge restocking fees.
Great law for consumers - rubbish for honest merchants.
Dowser, that's terrible. A really anti-business attitude.
I've given the replies to this tread a lot of thought. Customer service is first and foremost, and arguing with a customer doesn't win points. I've decided to just continue on a case by case basis. If the item is something I can sell again soon, I'll just take it back. If it's not, then I'll push the restocking charge, or ask the distributor to waive the charge.