We've all bought stuff at Home depot, Lowe's, Amazon, etc. that came with free returns. Tools, lighting fixtures, all sorts of stuff for our projects.
Many of these items are packaged in plastic that has been sealed with e.g. ultrasound, making it impossible to open "neatly". You have to destroy the packaging to open it, so the product can't go back on the shelf once returned. (Sometimes they tape it back together, but not usually.)
I needed some landscape-style spotlights to illuminate the Halloween stuff in my yard. I won't know what will work best until I try them after dark. I bought 3 different style of spotlights, know that I can return whatever doesn't work for me. Whatever I return will have been ripped open and that has to cost (all of us) something.
I guess the more stuff a person buys and returns, the better off they are. At least they are getting something for their money. I pity the po' fool that always knows exactly what they need and never returns anything. They are paying the cost for those that "buy to test".
I doubt there any real costs to us. All the stores have to offer it to be competitive, AND they have to have low prices to be competitive.
I'll tell you what the real cost is if you're not careful! You accidentally buy a returned product, e.g. some ceiling fan or lighting fixture, and you're at a client's house installing it and realize that it's missing a bunch of proprietary hardware because the previous purchaser was an incompetent, lazy bastard who didn't put all the bits and pieces back in the box before returning it! And let's face it, the store clerks don't check or even know what to check for when returns come back.
So now, you realize that you have to return the previously returned product, but it's half installed already. So you have to either UNinstall what's already been installed, and/or drive back to the store to return it for a new one... or hopefully get a clerk that will let you buy a new, unopened, fan/lighting fixture, take out the bits and pieces that were missing from the first one, then return it for a refund with the parts missing from the first idiot who bought it.
So now, I've wasted at least an hour, probably two hours, dealing with this crap handed to me by some dip$h!t I've never met, and there goes the profit I was making on the job. I basically donated my time and lost money because of this imbecile and have to pay my own stupid tax in the process.
So yeah, it may cost "all of us" a tiny little bit and we don't even notice, and the corporation absorbs the little bit it costs them and they don't even notice. But I sure as heck notice when a 2hr job turns into a 4hr job and it's serious money taken right out of my pocket.
This is why I refuse to buy returned merchandise for client jobs (and most of my own). I've had store employees give me dirty looks and act frustrated when I'm pulling taped together packages or boxes off the racks/shelves until I find a "virgin" one to buy.
I tell them "If you can personally guarantee me that this is in perfect working condition with all the parts present and intact, then I'll buy it."
I'll never forget the time I bought a handsaw and didn't check it out, first. Whoever bought and returned is must've run that thing through some nails, because it would just skate across the surface of a 2x4. The teeth were almost rounded over. :-)
Often the returned items < when not defective or damaged > are put on a clearance table or offered to employees, at a sweet discount. A generous return policy indicates that the retailer is serious about customer service and about standing behind the products ...
I can attest to both bastard customers and store clerks that don't check items.
I bought a Ridgid wet-dry vac. Looked brand new on the shelf. Tape even looked original. I got it home to find about 2" of drywall debris in the tub. Used, returned dirty and put back on the shelf. Maybe it was broken, I didn't test it. If it was, I apologize to the customer that I just called a bastard. I don't apologize to the store clerk who should have checked it out.
When I went back to pick up another one, I asked for "something for my trouble". They gave me 15% off.
...or, as Mike said, they have to do because everyone else is.
I serious doubt they really "stand behind the products" per se. Have you bought wood at one of the borgs? If they really cared, they wouldn't force customers to sort through 75 twisted 2x4's to find 6 straight ones. Well, straight until they dry out, anyway.
In my business (computers) the stores have to sell the "open box" stuff at a discount - which definitely costs them - and I don't know how many times (but WAY too many) I've bought something at Home Despot that has obviously been returnrd,only to find there was a good reason for the return. It was no good - and went right back on the shelf - to be returned again - and possibly AGAIN.
While there may be no obvious cost for the return, items that are returned would end up in the inventory shrinkage category. While not shrinkage, as in disappearance from the store, it is unsaleable inventory.
Inventory shrinkage is factored into the cost of doing business, and is factored into the sales price of all items. ie if a store experiences
5% shrinkage of their inventory, the sale price would be the cost of the material, the cost of labor, cost of shipping, the fixed cost of the facilities, plus 5% for shrinkage, plus all of the sales tax. For a large company like Lowes, the local store may not even be aware of how the returns affect the sales prices as the item price is calculated by the front office.
So if a store is experiencing a 5% shrinkage rate, you can assume that
5% of the sales price of an item is to cover shrinkage.
And they may have done that in this case, given the chance. However, I like to improve my chances by asking.
I ask for upgrades when I rent a car, I ask for upgrades when I buy a plane ticket, I ask for upgrades when I stay in a hotel. Sometimes it works, sometimes it doesn't. I've never been "downgraded" when I've asked, so there is only upside potential. The worst they've ever said is "Sorry, no."
Obviously it's not done on a per-store basis. The Borg's prices are uniform, at least for most of the US.
Shrinkage is a little different than returns, though. Interestingly, big-box stores have contracts with their suppliers that so draconian that they would make even Dracula blush. They're required to take back, and credit, whatever the BORG sends them. An acquaintance was in the electronics business and looked into supplying a big box store. According to the contract, if they sent him a train-load of broken lawn mowers, he'd have to accept them and give them a credit for them. He decided there were better places to sell his widgets.
Whether it is the store the supplier, or his supplier, some body absorbs the cost, and tacks it on to all future orders. The contracts just bury the cost deeper.
Personally, I don't understand the reasoning behind the idea that a customer should try to shaft the retailer. Buying three things knowing you're going to bring two of them back (in a non-salable condition) doesn't seem particularly honest to me. It just raises the cost on everyone for the few people who abuse the store policies. Returning something because it is defective is one thing. Returning because it was a try-n-buy or because the wife didn't like it, is wrong. Almost as wrong as the jerks who buy a new TV before the superbowl and return it the next week.
When I say "real" cost, I mean it's probably not something we'd notice if it weren't there. People complain about these costs being passed on to the consumer like it's some evil plot. It's an expense for the business. All expenses get passed onto the consumer. That's how it works.
The funny part is when you find some local mom-n-pop that doesn't do returns (are they still any?) their price for whatever is always higher.
Apples and Oranges, of course. The borgs have much greater buying power, and thus their cost for the same item is less. Has nothing to do with shrinkage or return costs.
I don't understand how you can defend such dishonest practices by consumers.
There will always be people who abuse the system, that doesn't mean you should take away the candy from all the kids because of the one brat. But many electronics stores suspend they're return policies on TVs around the Superbowl because that particular abuse of the system has gotten out of hand.
I'm glad these corporations don't see it the way you do. They offer these types of return policies to better serve their customers and I, for one, am grateful. Heck, even many tool manufacturers, themselves, are offering short term test drives of their products. "Use it for 30 days and if you're not completely satisfied for any reason, return it for a full refund."
These companies see the advantages in offering "try-n-buy" or returning it "because the wife didn't like it." I'm glad they allow test drives and returns because the "wife didn't like it," or in my specific case, the client didn't like it.
It's a common practice for me to purchase a few different versions of something I'm installing for a client and returning the ones they don't choose. It's also common practice for me to purchase several different versions of materials, hardware, or fasteners for an installation and return the ones I didn't use or need or even "prefer."
These corporations who offer these policies to better serve their customers certainly are helping me better serve mine and I appreciate it.
And thus, my original point that it's no "real cost" to us. Because they already have the lowest prices, we don't even notice the cost to us. Even though we are paying an "inflated price" to cover these things, that price is still lower than many other stores.
I didn't. Show me where I did. I'm defending the stores for offering better service to their customers. How on earth do you see that as defending dishonest practices by consumers?
Scale, It cost more per item for a small business than it does for a large business.
Assume it takes $1000/month to cover of a system with the cost of the salaries for a two person staff and the rent for a 1000 square feet of selling space
The cost of that system spread over 10 items sold /month will be about $100/item. If you sell 1000/items / month the cost will be $1/per item sold. This is in addition to the cost of the item.
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