REI’s announcement last week that it was changing its no-questions-asked, lifetime return policy created quite the buzz throughout the industry, but few expressed surprise or criticism.
Most outdoor manufacturers told SNEWS they understand the changes in a shifting retail landscape, and many said they welcome the opportunity to increase their contact with consumers who have return issues that REI might not handle anymore.
But questions remain from many manufacturers on how REI will address customer return requests that no longer qualify under its policy. The new policy states customers will be limited to one year on returns to REI and REI.com, and 30 days at REIOutlet.com. The policy does stipulate, “if your item has a manufacturing defect in its materials or workmanship, you can return it at any time.” In addition, REI states that it will honor returns that meet the manufacturer’s warranty.
That leaves so-called “customer’s discretion” returns (e.g. “it didn’t fit,” “I don’t like the color anymore,” or “it wore out sooner than expected”) a year after purchase up in the air.
Manufacturers told SNEWS they have yet to hear from REI on where the retailer will direct those customers. For example, will sales staff provide customers with the manufacturer's contact, act as a middleman, or say "tough luck"?
“We want to hear from these customers no matter the reason for the return, or how long it has been,” said Bill Gamber, co-owner of Big Agnes and Honey Stinger. “Our No. 1 priority is that the customer will still be taken care of. We think REI will continue to do so … the challenge will be on how to set up the process so it doesn’t upset the customer.”
REI officials declined comment to SNEWS for this story, only saying: “In our ongoing conversations with our vendor partners, we have been discussing our returns policy and satisfaction guarantee.”
Brand officials told SNEWS they expect more information in the coming weeks as they meet with REI to go over summer 2014 product. Some larger outdoor brands said REI had tipped them to upcoming changes to the national retailer's return policy, but did not share specific details until the announcement. Many other smaller vendors said they had no warning of the changes from REI.
“We found out by reading it in SNEWS,” said Graeme Eserey, marketing and product development director at Industrial Revolution, which makes camping accessories.
In learning the ins and outs of the new policy, brands told SNEWS they hope to better understand the processes of how REI deals with its qualified returns. Some returned products, particularly those with a manufacturing defect, get sent back to the brands, which then fix the problem or credit REI. But other returned products stay with retailer, as evident by the number of discounted inventory sold at REI’s garage sales.
“We’re not sure what gets back to us and what goes to the garage sale,” Gamber said. “It’s probably to each store’s discretion.” He and others said they’d welcome more information from REI on returns as it would help them with future product improvements.
“Detailed information on return rates and, more specifically, rationale for return have been hard to come by,” said Chris Miller, national sales director at Vasque. “However, under the new [REI return policy], we have been promised more detailed reports regarding returns.”
Many outdoor manufacturers told SNEWS they understand and respect REI’s decision to change its return policy in the face of growing abuse, with some customers treating the retailer like a free rental shop.
“Return policies have become more of a marketing element than a sales or product quality element and that is where I have major issues,” Miller said. “Consumers are maximizing use of a system that is flawed.”
“I think the percentage of abusers is small — we haven’t seen an increase at Big Agnes — but the dollars are big when you get to be as large as REI,” Gamber said.
“It's a classic example of, ‘a few bad apples can ruin the whole bunch,’” said Outdoor Research Director of Marketing Charles Lozner. “When people start to really abuse a program, you have to evaluate the goals of the program and make some changes.”
Outdoor Research has its own lifetime “Infinite Guarantee” return policy, and will continue to honor it. “We aren't seeing that abuse yet,” Lozner said. “We believe in making the customer happy at all times.”
When a dog destroyed a consumer’s new down Outdoor Research Transcendent Hoody within hours of it arriving in the mail, Outdoor Research helped out, Lozner cited. “Even though he didn't buy it directly from OR, we covered it under our Infinite Guarantee,” he said. “We know we're making lifelong customers by doing so.”
While manufacturers don’t expect much of an increase in customer-service work due to REI’s decision, they said they welcome any chance to talk directly to consumers and help them with a return.
That could backfire on REI.
If more consumers are trained to take their returns directly to the manufacturer, they might also shift their purchases there, too, especially as more brands beef up their direct-to-consumer online retail channels.
Also eagerly watching on how consumers react will be REI’s main competitors, such as EMS, Moosejaw and Backcountry.com, all of which have lifetime return policies. No word yet from these retailers whether they will follow REI’s lead or try to play up the fact they are not changing. Smaller specialty outdoor retailers might also benefit as the return-policy playing field evens.
It’s fine line, however. While brands and retail competitors might enjoy an uptick in business from REI customers, they also might have to deal with a rise in swindlers and free gear rentals.