Many (un)Happy Returns
Were you one of the unlucky ones whose newest thing-a-ma-bob didn’t work as advertised? Maybe it was hurtled a little too vigorously down the chimney, or maybe the assembly line elf was asleep at the switch. Regardless, I’m sure it was frustrating as you agonized in the customer service line waiting to return that defective product.
If that did happen to you, my sympathies. But, as it turns out, there might not have been anything wrong with it after all.
Before the break, I read an interesting article on the ‘Retail Info System News’ website: “Consumer Electronics Returns Costs $16.7B Called Unsustainable”. You can find the original article here: http://goo.gl/Nd3Ub
This article discusses a study by Accenture which examined the high cost of returning consumer electronics. This includes receiving, diagnosing, repairing, re-packaging, shipping, then eventually re-selling. They found it amounts to $16.7 billion dollars a year.
That’s right. $16.7 billion.
Is this just a cost of doing business? Some would say so. But here’s the kicker. 68% of ‘defective’ product returns, when investigated, are deemed to have ‘No Trouble Found’. Only 5% of returned products are truly defective.
So what does this mean for the retail industry? It seems that a majority of returns are related to poor customer education. Here’s a great opportunity. Imagine implementing an in-store program that helps customers understand, setup, use and optimize the products they purchase. What a great way to improve the customer experience and turn customers into repeat, happy customers.
And, more importantly, save money.
According to Accenture “Reducing the number of NTF customer returns by just one percent would translate to roughly a 4% cut in return/repair costs. For a typical manufacturer, that represents approximately $21 million in annual savings; for a large retailer, about $16 million.”
Now that’s a kind of return we can all appreciate.