Customer Journeys / Customer retention and loyalty / Recovery / Retail

Our policy says… – Why sticking to the rules can lose you customers


0 broken chain

Who was it that said ‘rules were meant to be broken’? Depending on what you believe via the World Wide Web, the source ranges from a proverb, to General Douglas MacArthur to Richard Nixon. Wherever the phrase originated, when it comes to Customer Experience, it is one that is extremely apt. The question is, should you break the rules to keep customers happy or not? This is the subject of the blog post you are hopefully about to read.

It is obviously difficult to answer the question out of context. So to help bring to life why the question ‘should the rules be broken’ is so important, I would like to share one of my Golding family stories. Although I do not often frequent clothes shops these days, the lovely Mrs Golding still does. It is not a regular occurrence, but whilst running errands in Chester, Naomi will often visit an independent store or two who sell clothes that meet her very high standards!

A couple of weeks ago Naomi purchased a top from a store in Chester – I will not name the store as it is not relevant. The store is an independent one with a couple of branches in the North West of England. Naomi has been a regular customer of theirs for a few years – I do not know exactly how much money she has spent with them, but she has certainly completed transactions in the many, rather than few.

As with a lot of customers these days, Naomi did not have a chance to try the top on in the store – she decided to buy it and try it on at home. This is becoming more common with consumers today – it is no surprise when you consider how many clothing purchases are now made online. Consumer expectation of purchase and return are very different today to five years ago. We expect to be able to buy, try and return all from the comfort of our sofas!

Having tried on the top, Naomi decided that it was not for her – it would need to be returned to the store. This is where things get a little bit complicated. When was the last time you bought and returned something to a bricks and mortar store? We take for granted how easy it is to do everything online nowadays – which is why it was two weeks later that Naomi had the opportunity to take the top back to the shop.

The top was in the bag it was purchased in and still had the labels attached (see picture below). Naomi’s objective was to return the top in order to exchange it for something else. When she arrived in the store, she realised that she did not have her receipt. This is unlike Naomi, but not an unusual scenario for thousands of shoppers. Thinking it would not be an issue (as all the labels were still clearly in place), Naomi approached the counter.

0 rock bottom top

Behind the counter on the wall was a statement about returns. I do not have a photograph of it, but the statement advises customers that returns will only be accepted with a  valid receipt. Surely they would accept something back for an exchange – especially if there is no doubt that the return is a product unique to them? As you can guess, this store would not accept the item back.

Now think about this for a second from the stores perspective – a customer has purchased an item from your store that they later decide they do not like. The item is in the same condition it was purchased with all tags still attached. There is no doubt the item was purchased from your store and has not been worn or damaged. The customer does not want a refund – they want to exchange it for another item in our store. Why would any organisation say NO to this scenario?

This store has a returns policy that is clearly visible – the staff, whilst pleasant and polite, had been told by the owners to strictly adhere to the policy. The problem is that the policy does not make any sense!! You will notice from the picture that the top (which could have gone back on sale) was £16 – for the sake of exchanging an item for £16, this local independent store has lost a customer for life – as a result of the store refusing to ‘break the rules’, they will lose out on hundreds of pounds of future revenue, as well as the knock on effect of Naomi and I telling other people. It simply makes no sense.

This to me is an example of where ‘rules are made to be broken’. The most customer centric brands on the planet would not have done what this local store did – even though they are perfectly entitled to do so. They would have accepted the item back for an exchange. I returned my Kindle to Amazon recently – it had stopped working. Amazon sent me a replacement on my word before I had even sent the old one back. Yes – Amazon are an enormous machine who some will say can afford to do that – but they are no different to anyone else. The reason Amazon sent me another Kindle is because Amazon want to keep me as a loyal paying customer. A customer without a Kindle will not buy books. A customer treated well is a customer who will keep coming back.

Think of John Lewis – the most customer centric of all UK retailers. If you take something back to John Lewis – even if you have lost the receipt – they will help you exchange the item if it is clear the item was purchased from John Lewis. It makes perfect business sense.

For a non retail example, look no further than Metro Bank. Britain’s first new High Street bank in over 100 years, they claim to offer banking focused on the customer through unparalleled levels of service and convenience – everyone I know who is a customer says that they deliver to this promise. One of the key things that defines their proposition is the elimination of rules and regulations that are NOT customer friendly – they say the following:

With our unique, customer-focused retail business we reinvent the rules of retail banking, making every effort to remove all stupid bank rules from our day to day services to offer simpler and more convenient banking to you.

It is possible to ‘break’ the rules and offer a viable business proposition. It is possible to TRUST your people to know what to do and when – even in a regulated environment.

So that is why I believe that SOME rules are made to be broken – not all, but some. It is up to people who run businesses to empower the people who interact with customers to do what is right – for both the customer AND the business. That means that on occasion, rules will NEED to be broken to do what is right. In Naomi’s story, the people who run the business had not given their employees the empowerment they needed – they knew that they should have accepted the exchange, they were just not allowed to.

If you run or are a senior leader in a business, ask yourself this – if I were to experience our customer facing policies as a customer – how would I feel? If the owners of this store had experienced what Naomi had, I am hoping they would understand why their unbreakable rules will actually turn customers away…….for good!

10 thoughts on “Our policy says… – Why sticking to the rules can lose you customers

  1. Good post Ian and you’ve highlighted a common issue that plagues (and highly irritates) many consumers. However, there is a way that this can all go away – and that’s by lobbying retailers and manufacturers to move to e-receipts. Apple embraced this process a while ago and if you purchase anything from their stores now the receipt is simply emailed to you. Apart from the benefits of knowing where all your receipts are, its also a highly effective way for manufacturers and retailers to contact consumers if there is a product recall or safety issue. I feel a blog post coming on regarding this… :)

    • Thanks as always Steve. As someone who is not an Apple customer, I was unaware of this – yet it is a brilliant (although very simple) idea. I would love to feature a guest blog post penned by you on the subject!

  2. Hello Ian,

    I get where you are coming from. And I get the frustration that the honest customer experiences when attempting to return a purchased item that has not been used and is in as good a condition as when bought.

    How would you deal with the issue of theft? There are people who steal stuff from stores. It is not a lot of people, it is the same people, and they steal regularly. How do I know? Because I know people who work in retail: one of them is my son. The same people turn up, again and again, to steal stuff. What would happen if these people turned up stole the stuff, then returned it intact and asked for a refund?

    As always life is more nuanced then we first realise. Or put differently, the world really does look different depending on the which side of the fence you are on.

    I wish you a great day.

    • Hi Maz – as always – many thanks for taking the time to read and respond to the post. Having spent 7 years in the retail industry, I agree that theft is a huge issue. That is why I am all for retailers NOT wanting to issue refunds for returns. My story centres on the desire to exchange for another item – not something the untrustworthy customer would do.

      This is why empowering employees to do what is right (with guidance) needs to come in – refunding a purchase may not make commercial sense. Exchanging an item makes perfect sense – as long as the item being returned for exchange is not damaged or abused.

      I believe that retailers too often assume that customers are guilty before proven innocent – the guilty are a minority. Retailers should treat customers as humans if they want to keep us as customers.

  3. Totally Agree! I believe too that SOME rules are made to be broken! We just need to make sure employees recieve extensive training and development processes to ensure high standards and that the best quality is constantly achieved.

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