US retailer L.L. Bean faced a backlash when it dropped its lifetime returns guarantee. Should retailers be offering a more generous returns window?
Last month, US shoppers were up in arms about clothing brand L.L. Bean. After decades of offering a lifetime replacement guarantee on returned goods, the retailer suddenly changed tack to enforce far stricter rules for exchanges or refunds.
Unsurprisingly, the move caused a backlash. Experts have severely questioned L.L. Bean’s decision to remove a key competitive differentiator, leading to the brand taking quite a beating over the past month.
For us in the UK, the L.L. Bean fiasco has raised a series of key questions that demand a response.
First, how worried should we be about exploitative returns? Also, how can our returns policies be first class without eating into profits? Finally, once the tap of unlimited returns has been opened, is it possible to close it again?
The myth of manipulative customers
The first question draws upon a common retail fear: customer opportunism. The worry is that with any generous policy, consumers will quickly exploit the retailer’s goodwill for their own gain.
This is the rationale behind L.L. Bean’s returns changeover.
“Specifically examining one major fashion brand, only 0.067% of its returns were rejected as fraudulent. This was also reflected across other retailers we looked into as well”
In a Facebook post explaining why it was withdrawing the guarantee, the retailer wrote: “Some view it as a lifetime product replacement programme, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”
However, this fear doesn’t seem to be grounded in actual customer behaviour. As a returns management platform, we handle the returns for a number of top UK retailers.
Looking through our data, we wanted to confirm whether L.L. Bean’s worries about fraudulent returns was mirrored across the fashion industry.
In fact, we found the opposite. Specifically examining one major fashion brand, only 0.067% of its returns were rejected as fraudulent. This was also reflected across other retailers we looked into as well.
Generosity means growth
Another key concern surrounds how to remain profitable when offering an especially generous policy. Does a broad returns window lead to additional processing costs without offering real growth opportunities?
That isn’t necessarily the case. John Lewis, which quietly slashed its returns window from 90 to 35 days last year, said that 90% of its customers already returned their items within this timeframe.
“What’s the harm in offering an extended window to exchange or refund purchases? Not only does it build trust between brand and customer, but it can also directly lead to further sales opportunities”
Our own data supports this. Over the past year, the average time for customers to return items is between 12 and 16 days, regardless of policy length.
What’s the harm in offering an extended window to exchange or refund purchases? Not only does it build trust between brand and customer, but it can also directly lead to further sales opportunities.
Just look at Asos. Tapping into the rise of the living-room-dressing-room, its policy of allowing customers to try before they buy helped contribute to a great Christmas for the brand.
Closing the unlimited floodgates
Of course, we’ve so far avoided the elephant in the room. If a brand is offering an unlimited or especially lavish returns policy, is it possible to reduce its scope without taking a hit?
For me, it all comes down to how a retailer communicates these changes. Let’s go back to John Lewis. Its returns overhaul last year, cutting its maximum return window from 90 to 35 days, was met with little backlash from the public.
The reason for this comes from how it explained the shift – it was simply adjusting the policy to better fit consumer behaviours.
L.L. Bean took a wholly different approach. Whichever way you slice its rationale, it ultimately blamed its customer base for taking advantage. This is why it experienced such a fallout, and why its brand suffered as a result.
If it had instead focused on how exemplary their new returns policy is (which is still 365 days with an unlimited policy for faulty goods), it would likely have fared far better.
L.L. Bean’s returns challenges is a study in how not to approach exchanges and refunds for modern retailers. The issue of exploitative customers isn’t as big as many think and certainly shouldn’t sit at the heart of policy direction.
By trusting your customers through offering generous programmes, there are significant opportunities for growth and ongoing customer retention. Don’t let L.L Bean put you off.