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  • Writer's pictureNick Hague and Paul Hague

Why Having a Customer-Friendly Return Policy is Good for Business

It was around six months ago that I bought a dimmable LED light bulb to hang over our kitchen table. I bought it from a shop in our local town, preferring to support it rather than buy the lamp for a few pounds less from Amazon. I remember at the time that the person who served me in the shop told me that the lamp should last for many hours, cost next to nothing in terms of energy, and was fully covered by a money back guarantee if I kept the receipt. I'm not as organised as other people and, encouraged by the supposed long life of my bulb, I scrapped the receipt. This presented me with a problem because the other day the lamp gave up the ghost.  It only cost around £8 or £9 but I was annoyed that it hadn’t lived up to expectations.

 

I took the lamp back to the shop where I purchased it and explained the situation. The person in the shop asked if I had the receipt and I confessed that I did not. They told me that unfortunately there was nothing they could do about it. I said that I would leave the lamp with them hoping that at least it would be reported to Energizer, the manufacturer, who may learn from its fault.

 

I know that I was at fault for not keeping the receipt, but I couldn't help feeling aggrieved. Did I look like someone who was seeking to do the shopkeeper out of £8 or £9? Could they not have accepted the lamp, returning it to their supplier, and have been recompensed? Would it not have been worth it to them to have won my appreciation and loyalty by simply replacing the lamp? (Historically I've bought quite a lot from the shop).

 

This episode got to me and I was reminded of a story that is widely told about Nordstrom, the department store in the US. The story starts almost 40 years ago at a Nordstrom store in Fairbanks, Alaska, where Craig Trounce was a store associate. One day, Craig noticed a customer rolling a pair of tyres into the store. When Craig asked how he could help, the customer asked to return the tyres, insisting that he bought them at that very location with a guarantee that he could bring them back to the store at any time. 

 

Nordstrom has never sold tyres. But in 1975, it purchased three stores from a company that did – Northern Commercial of Alaska. The Northern Commercial Company offered an eclectic mix of goods – everything from towels and linens to automotive supplies. When Nordstrom took over the locations, it narrowed the merchandise mix to apparel and shoes.

 

Instead of turning the customer away, Craig wanted to do right by them as they had driven more than 50 miles to return the tyres. Knowing little about how tyres are priced, Craig called a tyre company to get their thoughts on how much they were worth. He then gave the customer the estimated amount, took the tyres, and sent him on his way. 

 

Lost over the years is the exact dollar amount the customer received in exchange for those tyres, but no doubt it's been earned back a thousand times over when you consider the scope and resonance of the story today. In fact, the tyre story has become so important to Nordstrom’s culture, they hang tyres in some of their stores and break rooms as a reminder of their commitment to their customers. 

 

You can check this story out on Nordstrom’s website on

 

How much did Nordstrom's generosity actually cost? How much has this legend returned Nordstrom in terms of customer loyalty over the years?


And, crucially, how much did it cost the shopkeeper in Marple when they turned me away because I did not have a receipt?

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