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Educational Consumer Tips

Refunds, Exchanges and Returns: Customer Service

Author: Rachel Gelb
Category: Service

In the marketplace where millions of transactions are made daily, a fair and equitable refunds and exchange policy can be as effective a sales tool as advertising, promotion, and merchandising. By taking constructive action, a business can turn customer discontent into greater customer loyalty.

Successful retailers agree that, in the long run, business profits are tightly tied to the company's ability to satisfy the customer. While a store may take the position that all sales are final, for example, the desire for good customer relations generally dictates that some kind of exchange or refund program be in effect. Following are some useful guidelines for setting up a system to handle refunds, exchanges, and returns.

Adopt a workable policy
Company management first must decide on a refund/exchange policy. In making this decision, consider the company's suppliers and their "take back" policies, manufacturers' warranties, and service center set-ups. State and federal laws also enter the policy picture, and the laws should be checked out with your company attorney. When finished, the detailed policy probably will be a blend of policies; yours, the suppliers, and the laws that govern refunds, exchanges, returns, warranties, and service contracts.

Keep it simple
Although the "blend" mentioned above sounds complicated, your policy should be reduced to its simplest form so both company employees and customers quickly and easily understand it.

A "No Quibble" or "Satisfaction Guaranteed or Your Money Back" policy is ideal. This may not be possible in your business, but the policy should be kept simple, understandable, and as consistent as possible.

Make your policy public
Use your policy in advertising and post it in your stores for everyone to see. Print it and use it as a bill stuffer from time to time. Not only does this remind your customers that they can count on your company, it helps prevent misunderstandings from arising and can help resolve them when they do occur. Many retailers set aside a special area or station to handle bring-backs and make it accessible to customers.

It is important that employees be instructed to stick with the policy and not make oral promises as to exchanges, returns, refunds, and warranties that are inconsistent with the policy. Do instruct employees to remind customers to save receipts should merchandise need to be returned. This procedure is often done at the check-out counter by a cashier, although salespersons storewide also should mention receipt-saving if, in the employee's judgment, an exchange might be possible. Whenever possible receipts, themselves, should carry information on your refund and exchange policy.

Return policies
Many sellers have set up policies that permit the customer to return purchased articles. Exchanges, returns for credit, and refunds are considered services to encourage customer patronage. The policy should stipulate that to return merchandise, the customer must have a cash register receipt as proof-of-purchase (no exceptions) and the merchandise, unless defective when bought, must be in a condition that it can be re-sold.

Under an exchange policy, a customer may return an item or another item of the same kind may be taken in its place. This privilege is usually extended when the buyer has made a mistake as is often the case with gifts, such as a mistake in the size or color of a shirt. However, your policy should require that the customer have a sales slip, cash register receipt, or other proof-of-purchase. The merchandise to exchange also should be in resale condition.

Depending on your inventory control system, the exchange system may involve issuing an exchange slip, which serves as "proof" should the item need to be returned again for exchange.

Returns for credit
On return of a purchased item, some stores adopt the policy of giving the customer a credit slip. The customer may apply the amount on the slip to the purchase of any other items in the store. This privilege usually is extended when the retailer want to adopt a more liberal policy that a simple exchange. The policy usually specifies that the credit is for merchandise only, not cash, or merchandise and cash.

Many retailers return customers' money in the interest of maintaining customer goodwill. The refund policy usually requires that the merchandise be returned within a specified amount of time and be in resaleable condition. The money-back policy should carry the requirement that the customer have a sales slip or other evidence that the merchandise was actually purchased at the retailer's place of business.

Better Business Bureau's role in consumer complaint handling
Recognizing that consumer confidence is basic to the health of the American marketplace, one role of BBB is that of an unbiased third party seeking voluntary resolution of legitimate consumer complaints.

It is the basic policy of BBB that consumers first must attempt to resolve any dispute directly with the business involved. If then the matter cannot be resolved, BBB will attempt to bring about a resolution using conciliation and arbitration techniques:

Conciliation: BBB staff helps the customer and business communicate so they can resolve their dispute informally.

Arbitration: The parties state their views at an arbitration hearing, offer evidence, and let an impartial third party from the Bureau's pool of certified arbitrators make the decision that will end the dispute.

About the Author: Rachel Gelb is Communications and Marketing Manager for BBB serving Eastern Massachusetts, Maine, Rhode Island and Vermont. Find Rachel on Google +.

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