The Tricky Business of Retail Return Policies



Accustomed to generous retail return policies, jewelry store shoppers aren’t afraid to bring merchandise back. Here’s how to craft a friendly return policy without sacrificing your bottom line.

 

When the issue of returns comes up, David Audette, co-owner of M.R.T. Jewelers in East Providence, R.I., sighs deeply.

For years, M.R.T. held a forgiving return policy, one that ­honored multiple generations of customers at the century-old store. “We’d even take back custom-built pieces if we felt we could use certain components again,” Audette says. “There was no way we could’ve been more liberal than we were.”

Now, however, Audette is rewriting M.R.T.’s return ­policy, carefully crafting guidelines to better insulate the business from losses. “The goodwill we’ve extended to customers hasn’t ­necessarily been returned,” Audette explains. “Jewelers need to take measures to protect themselves, and we’ve been lax to do that.”

The “Kohlsification” of America

Overall retail sales this past holiday season approached $692 billion, according to the National Retail Federation. Optoro, a logistics provider that helps companies manage ­returned merchandise, estimated that 13 percent of those purchases would be returned to stores.

Though jewelers generally enjoy a lower return rate compared with general retail, today’s consumers rarely hesitate to return merchandise. And some retailers, in fact, promote ­über-accommodating policies to woo customers.

“A forgiving return policy is like insurance to customers—hopefully, they don’t need it, but they sure like knowing it’s there,” says Waqas Saeed, operations manager at Sacramento, Calif.–based Sharif Jewelers.

Department stores such as Kohl’s and Nordstrom as well as online jewelry outlets including Blue Nile and The Jewelry Exchange all tout rather lenient return policies. Blue Nile, for instance, provides 30-day returns alongside free, insured shipping. Those actions feed into consumer expectations. Some customers make purchases knowing they might return an item, and many expect stores to bend to their needs even if a return falls out of bounds.

“Consumers aren’t gun-shy about returning items and generally have a hard time understanding a retailer who isn’t forgiving,” says Ryan Blumenthal, third-generation owner of Corinne Jewelers in Toms River, N.J.

For many jewelers, the prevailing marketplace reality puts them in a bind: Meet consumer expectations, occasionally at the expense of the store’s bottom line, or risk alienating customers.

jerry raine richard servis
Turgeon Raine cofounder Jerry Raine (pictured with store manager Richard Servis)

A Delicate Dance

At Long’s Jewelers, a five-store, New England–based chain, president Craig Rottenberg reviews the company’s return policy on an annual basis, specifically considering competitors and customers. Over the past five years, Long’s has ­increasingly erred on the side of accommodating customers. Today, customers have 30 days to return merchandise in the same condition in which it was purchased.

“That can make for some challenging days in January when we see a lot of holiday returns,” Rottenberg says. “It’s only human to ask if this makes sense.”

But rather than rejecting consumers’ escalating penchant for returning merchandise, Long’s embraces it to spur long-term business. “We don’t mind accepting returns so long as it’s not abused and in the spirit of serving customers,” Rottenberg says.

When Blumenthal arrived at Corinne Jewelers 15 years ago, he shuddered at a “very restrictive” return policy and responded by initiating a no-questions-asked, 30-day policy for all merchandise presented in its original condition.

“The net of it is that we’re not here for a one-time sale but for many sales over a lifetime, and we can’t have policies ­running against this,” Blumenthal says, adding that customers consequently see Corinne Jewelers as a “risk-free” shopping experience.

“The biggest hesitation we see at the counter isn’t price, but rather if the recipient will like the piece,” Blumenthal says. “When we say risk-free return, you can almost see the nervousness evaporate.”

Similarly, Turgeon Raine, a luxury jeweler in downtown Seattle, offers a 30-day, no-questions-asked return policy for any item purchased out of its stock. “With the jewelry business being so gift oriented, it’s hard for someone to spend a lot of money if this type of policy isn’t in place,” cofounder Jerry Raine says.

When a client presents a return, Turgeon Raine accepts the product back with a smile. Raine says today’s customers expect no-hassle returns, and making them clear hurdles or justify themselves to multiple people only frustrates. “Upset a client and that goes against you in the long run.”

Protecting the Business

Still, retailers cannot realistically cater to every whim and must draw some lines.

Sharif Jewelers places a 14-day limit on any return, requiring items to be in new and unworn condition. New watches and gold bullion, moreover, are final sales. Sharif Jewelers does permit exchanges, an olive branch of sorts.

“We wrote our new policy in a way that we’re covered,” Saeed says, adding that revising the return policy was a ­multiyear effort at the family-owned business.

Though Long’s possesses a relatively generous return ­policy, Rottenberg has nevertheless spelled out particular nuances to prevent costly returns. For instance, protective stickers must remain on timepieces. He is also exploring using security tags to discourage wear-and-return instances.

“We sell pristine, new jewelry,” Rottenberg says.

While return policies differ from one retailer to the next, particularly in the Wild West world of e-commerce, one element is nearly ubiquitous: Special orders and custom pieces are not returnable. Many stores definitively communicate that on their receipts, order forms, and websites.

“It’s a poor business model to be bogged down by custom pieces that are returned, so you have to make this ­explicit,” M.R.T. Jewelers’ Audette says. “The bottom line: We all have to protect our businesses.”

JCK5: Point of No Returns

Before handing over money for returned product, savvy jewelry retailers make sure they’ve got their bases covered:

1 / Talk with suppliers about the store’s return policy, and solicit their cooperation toward delivering a positive shopping experience.

2 / Remain cordial when accepting returns. “You don’t want to make the customer feel bad, awkward, or embarrassed to return an item,” Corinne Jewelers’ Ryan Blumenthal says. “That can be a killer.”

3 / Inspect the piece to verify its condition and that the returned item is precisely what was sold.

4 / Confirm proof of purchase at the store, including total cost, payment method, and purchase date.

5 / Attempt to ascertain the reason for the return. “Often, it’s something we can address,” Long’s Jewelers’ Craig Rottenberg says.

(Transaction: Visual Spectrum/Stocksy; Raine and Servis: Jenny Jimenez)

8 responses to “The Tricky Business of Retail Return Policies”

  1. Most of our business is wholesale, where, once you ‘okay the goods’ the sale is final.

    However, we’ve been selling online since 1999, at that time, we did 7 days for online purchases, and you had to have a reason. (‘I changed my mind’ wasn’t good enough, we would charge a 10% restocking fee for ‘I changed my mind’ returns)

    Then, as the online part of the business got more competitive, it went to 7 days ‘no questions asked’, then 14 days, now, 30 days, no questions asked. (Buyer pays return shipping unless the item is ‘not as advertised’)

    We do a LOT of custom work for retail customers these days, we have talked about having a ‘non refundable’ portion of the custom work, but, I would say that of the last 100 items we made custom for customers, maybe one or two were ‘returned’ or ‘not accepted’, so, it doesn’t seem to make a lot of sense to scare people with a $500 non-refundable deposit on a $5000 ring.

    The way I figure, we make BEAUTIFUL JEWELLERY! Meaning, even if the person who wanted the item the first time around decides against it, I will be able to stock the piece and sell it to someone else.

    Even if we were to lose $1000 on a ring that cost $4k to make (SUPER unlikely), if it is a 1% return rate, just figure that you made $10 less for every other sale.

    ‘The customer is always right’ doesn’t fly with us, but, you should LOVE your jewellery, the last thing I want is someone to have an emerald ring in their jewellery box that we made and every time they see it they think ‘damn, that wasn’t what I wanted’

  2. Eash return is based on its own merit. There can be many underlining issues as to why it is returned such as; too expensive, wrong color or stone, the relationship didn’t work out and many others. By having a 30 day no questions asked policy opens up other issues like “use and return”. bring it to “Ill copy anything Jewelers” to beat the pricing. So it’s important to know what the reason is by just asking a few questions and you’ll know to either refund, credit or exchange them. Good chance that you will return the item but if you can save the sale by a few adjustments that would be the way to go.
    I would like to read comments on online returns and custom items. Also, does social media play into the return game based on reviews on Yelp or other social outlets? Are we afraid to make the wrong move?

  3. I managed for Sterling Inc. DBA Beldens Jewelers in the early 1990’s when the Nordstrom’s mentality of “always take it back even if you didn’t sell it” was prevalent. We went to a 6-month, no questions asked, return policy that was an absolute, unmitigated disaster. Rarely was the merchandise returned in original condition. Knowing this would be an issue at my location I trained my staff to clearly, and boldly state that the merchandise “must be in original condition.” Very worn jewelry was then returned with the statement “That’s how it was when I bought it!” It seems Buyer’s Remorse hit somewhere around the fourth month especially in a recession. The losses of course came out of the Manager’s bonus, and the manager’s couldn’t refuse a return as Akron would always side with the customer. To me allowing this practice was akin to allowing the customer to steal from the company, and not only did the employees suffer but the honest customer’s paid for it too with higher prices, and also a lot of refurbished jewelry being sold as new!

  4. Easy returns seem to be here to stay, not just on a retail level but also on a wholesale level. Today’s retailers expect to be able to return items that do not sell for credit.

  5. After having spent 15 years running groups is fine jewelry departments in upscale department stores, plus 24 years running my own store in an upscale mall west of Minneapolis, I “retired.” Diner then I’ve worked as a rep and an independent consultant / trainer in the upper Midwest. This has given me an unusually broad perspective on this topic. Stores that insist on strict return policies absolutely loose sales. One approach that seems to work well is to post store policy and to have it printed on the bottom of every receipt. Most customers seem ok with a 30 day limit for returning new items that have not been worn or modified. Exceptions for custom and special orders may lose some sales, but don’t alienate customers, if explained reasonably.

    Just as important as policy is training sales staff in the art of handling returns, which is not of the most sensitive areas of selling. Some tips are to set the customer at ease by emphasizing that you want to help, encouraging them to explain their concerns and needs, then shut up and listen. If the request is within policy, assure them that you’ll be happy to accommodate their return, then keep probing / selling. You may end up with a return, but you often sell something else, immediately or in the near future. Either way, you will create loyalty, which is critical. If the request is outside of what store policy allows, explain that directly, then encourage your customer to talk about ways that you might be able to circumvent your own rules to help them without damaging the financial position of the store. Often there will be a simple win – win solution. If not, your customer will at least feel understood and appreciated.

  6. I have had an e-commerce site for the past 20 years selling diamonds from $5k to $100k and have learned a lot about consumer behavior in regard to returns during this time. And that is…once they make up their mind to return an item they are going to return it, and it does not make any difference if it is after the Return Policy ended or even 6 months after the sale! Customers will do and say whatever it takes to force you to take it back. It also doesn’t make any difference if they have been wearing it for the past 6 months either. If they paid with credit card or PayPal then they have 6 months to return it, and the credit card companies and PayPal will even coach them in what to say to create the dispute/chargeback and force a refund. I say to myself…with every sale I make…when does the money actually stay in my pocket, and I have learned not until after 6 months.

    And, furthermore after they return the item I am still stuck with the original credit card transaction fees (5%) and then the credit card dispute fees. So for example, if I make a $20k sale on line and it gets returned, then I am still stuck paying the 5% credit card transaction fee ($1,000) and return transaction fees.fees, about $200. And if the customer wore the item and created a lot of wear then I have to make a new setting and scrap the returned one.

    I have learned that you can make your Return Policy ironclad as possible so as to not accept returns after 14 days, but the credit card companies and PayPal will undo that every time and stand by the cardholder and do an automatic chargeback. I don’t like it…but there is nothing I can do about it…so I accept it as one of the cost of doing business, but it sure takes the fun out of it!!

  7. We allow 31-days to return stock items for in-store credit only, no cash refund or card credits. That is printed in bold type on sales slip. We do not send monthly statements showing the credit balance but customer is given a credit slip with the return. We get very few returns, maybe 3-4 a year, never on bridal unless wrong finger size for mens weds. Special orders and engraved items are not specified but it’s obvious to customer and has never been requested. Some in-store credits for returns have taken up to a year to be used.

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