How Does An Unlimited Return Policy Help L.L. Bean?

llbeanThis summer, outdoors equipment co-op REI made a change: they cut back on their return policy. They no longer accept any item back for any reason indefinitely. Other companies continue the practice, most notably L.L. Bean and Costco. It must be expensive and there must be customers who abuse it. So why do they do it?

Yes, taking stuff back indefinitely does cost the company quite a bit of money, but it has another function: marketing. If you returned a 25-year-old set of flannel sheets and got a gift card in exchange, how many friends and colleagues would you tell that wacky story to? How many online comments about the old sheets would you leave on posts about L.L. Bean? Those wacky stories have value, and market the company in a way that a TV commercial or banner ad never could.

Most of the company’s business is mail order, and people are less likely to send something back as opposed to keeping it in the car trunk for the next time they happen to go to the mall.

REI’s new policy allows returns within a year, and is relatively generous compared to other retailers. Unlike L.L. Bean, the co-op noticed an increase in the number of people who abuse the return policy in recent years. I don’t want to be in the business of looking somebody in the eye behind the counter and questioning the morality of their return,” the company’s executive in charge of stores told NPR. A time limit is more fair than saying “we won’t take these stinky boots back.” Isn’t it?

What Happens When Stores Let Customers Return Whatever They Want? [NPR]