Thursday, July 24, 2008

Bring us your poor, your tired, your broken down merchandise

Seems like a lifetime ago customers brought broken merchandise back to the store or a designated repair center to get it fixed. Those days are long gone. Now, retailers allow customers to bring in their ruined merchandise and exchange it for new products or a store credit. Some will even issue a refund.

In their 2006 MIT Sloan Management Review article, James Stock, Thomas Speh and Herbert Shear lament how product returns have come to be viewed by companies as a necessary evil, a painful process, a cost center and an area of potential customer dissatisfaction. They show that many successful organizations have realized that an effective product returns strategy can provide a number of benefits, such as improved customer service and customer knowledge.

There's the famous urban legend about Nordstrom taking back supposedly defective tires - which they've never carried. Even more impressive as well as true - since 1986 American Girl has had a Doll Hospital. They invite customers – 5 to 9 year-old girls – to bring or send in their broken dolls to have them repaired. And that’s not all. The doll comes home wearing a hospital gown with a “Get Well Soon” balloon in her hand. That’s amazing – breathtaking, in fact.

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