Jeweller - November 2018

MARKETING & PR
UNCOVER REWARDS WITH EXTENDED REFUNDS
EXTENDING THE REFUND PERIOD WILL GENERATE GOODWILL BENEFITS FOR RETAILERS WITHOUT SIGNIFICANTLY
ADDING COSTS, PROVING IT IS NOT THE DEATH WISH IT MAY BE PERCEIVED TO BE. DAVID BROWN REPORTS.
I’m sure that headline alone will prompt
a reaction from readers. We all know how
fickle consumers can be, so surely offering
an extended opportunity to return an item
beyond that required by consumer law is
only inviting problems, right?
An extended guarantee may result in more
refund requests than you are currently
receiving but let’s weigh up the cost against
the benefit.
REDUCED RISK
Firstly, what stops customers from
buying? One of the key factors that makes
customers hesitate is perceived risk.
What if an item is faulty? What happens
if they find something better afterwards?
What if they see the same item for less?
These scenarios will play out in the heads
of customers while they are making their
purchasing decisions. If you doubt this,
listen to your own voice when you next
make a purchase decision.
Understanding your customers is about
tapping into their psyche, recognising the
same thought patterns you also use when
you buy.
TIME WASTER MYTH
Let’s deal with the elephant in the room –
those customers who will only exploit any
loophole that retailers give them.
What percentage of customers is this? What
percentage of items sold do you ever get
refund requests for? Chances are it’s not as
many as you think.
We tend to focus on the isolated cases and
see them as representations of a larger
percentage but the reality is often different.
Your customers actually don’t want refunds;
they don’t deliberately take the time to buy
items they know they’ll have to return. Most
people are interested in making the right
purchase, as are you.
DO YOU FOLLOW
THE LEGAL
REQUIREMENT AND
NOT A DAY MORE
OR DO YOU USE
YOUR REFUND
POLICY AS A
MARKETING TOOL
THAT CAN HELP GET
YOUR CONVERSION
RATE HIGHER?
REFUND
Secondly, if you do offer refunds, are you
any worse off than if that customer
hadn’t purchased?
Provided it’s not a specific order or make,
you can generally return the item to
inventory, refund the customer’s money
and move on. Everyone is back where
they started.
HELP NOT HINDRANCE
REWARDS
EXTENDED REFUNDS ARE NOT A CURSE
Instead, let’s consider how refunding helps
your business. Again, it deals with that
issue of perceived risk – if your customer
has unresolved issues then they won’t buy;
if they believe the risk of buying is greater
than the benefit of making the purchase
then they won’t buy.
Any steps you can take to reduce this risk
will only increase their chances of making a
purchase decision.
Money-back guarantees are part and parcel
of the offering of most online stores these
days. They have a distinct disadvantage
over physical stores in that no one gets to
touch the product until they have paid for
it. Consumers are now expecting the same
of bricks-and-mortar retailers.
The advantage you have is that the physical
handling of the item prior to purchase will
significantly reduce your chances of having
a refund, plus you don’t generally have
to cover any freight costs in having the
item returned.
EXTEND TO EXCEL
How long should a money-back guarantee
period last? The longer the better.
If I sold you a car for $25,000 and told you
that you had until 5pm tonight to return it if
you weren’t happy, chances are you would
spend the next few hours giving that car
a good workout and check over to make
absolutely sure it was going to be ideal.
If I told you however that you had a month
to decide, chances are you would relax and
probably not be as vigilant in performing
checks than you would be if your deadline
was more urgent.
Humans are lazy by nature and we don’t
tend to do things until necessary. Make the
returns deadline as distant as you can and
chances are in won’t even be done at all.
The longer the refund period, the less likely
customers are to activate it – it’s the same
thinking that underpins the strategy of gift
vouchers, which often go unclaimed.
What’s your refund policy? Do you just
follow the legal requirement and not a day
more or do you use your refund policy as
a marketing tool that can help get your
conversion rate higher?
Offering an extended returns period might
seem like madness but sometimes there’s
method in that madness.
Benefit from the goodwill of offering longer
refunds and watch your reputation improve
in the eyes of the customers. i
DAVID BROWN is
co-founder and business
mentor with Retail Edge
Consultants.
retailedgeconsultants.com
November 2018 Jeweller 43