Are In-Store Customers at a Disadvantage When It Comes to Returns?


Channel agnostic: one of many recently emergent retail descriptives, sprung from seismic technology-driven change.

Yet agnosticism should not be confused with like practices. Exhibit A: returns. In the old days, 15 years ago or so, almost without exception, high-end luxury verticals followed strict policies of store credit-only within a usually tight window, maybe seven or 10 days. That tony multibrand stores, the Neiman Marcuses and Nordstroms of the world, offered liberal return policies along with exemplary service may have stuck in the communal craws of brands that were both wholesale vendor of and retail competitor to those majors. But for the most part, stores, brands and consumers navigated the awkwardness, and it all worked.

Times have changed. Now, up and down the e- and m-commerce food chain from mass marketers to high luxury, full-refund returns are a given. Devotees of online shopping love the ease of it, buying in single purchases multiple styles and, often, multiple sizes of one style, with the full intention of selecting narrowly and returning the rest. Brands participating in e-commerce support the practice of buying much to keep a little. Many encourage it; all pay the cost of returns.

A client shopping for an event dress can browse, buy several in two or three sizes, choose one in the privacy of her own home, experimenting with different shoes and jewelry, and ship off the rejects. For the brick-and-mortar client, the “Does it fit? How do I look?” process occurs in the store, so the difference in return policy is minimized. But what about buyer’s remorse? The online shopper struck with the syndrome has up to 30 days to decide if her love was genuine or a momentary infatuation (fashion rapture is an often fickle enterprise), and can return the purchase no questions asked. An in-store client suffering from similar post-purchase regret must be content with store credit.

Within the context of WWD’s deep dive into the buy-now-wear-now phenomenon after the spring shows, I grew curious about the impact of e-commerce on brands’ penchant for store-credit returns. (Not a big returner myself, I’d never before thought to question my assumption.) Turns out, the policy is loosening its hold, in both the luxury and contemporary arenas. Among the designer brands now offering full refunds for in-store purchases: Carolina Herrera, Coach, Ferragamo, Giorgio Armani, Louis Vuitton, Michael Kors, Oscar de la Renta, Sonia Rykiel, Thakoon, Tommy Hilfiger, Tory Burch and Ralph Lauren. Yet many others cling to the bifurcated approach.

I first assumed that those in the former group are, if not more forward-thinking philosophically, then at least nimbler, with the others either resisting the inevitable or just slow to update. I only queried brands of the latter persuasion; the reasons for the change to a full-refund policy seem obvious, and my primary interest is whether in-store customers are in fact disadvantaged by the credit-only stance. 

On the upside, respondents rattled my assumptions with well-considered insights. Most feel that their current position works for now, but that given the overall industry volatility, no business practice is sacrosanct. Rather, fluidity is the future. “This is an ongoing conversation at our company, as expectations are changing depending on how we live/shop/experience fashion,” said Wen Zhou, chief executive officer of 3.1 Phillip Lim.

On the — unexpected — downside, most of the brands queried went dark, either declining comment or not responding. These include Alexander Wang, Balenciaga, Bottega Veneta, Chloé, Etro, Fendi, Lanvin, Loewe, Marc Jacobs, Missoni, Prada and Versace. Yes, it was short notice, but what isn’t these days? While I expressed a preference for responses from ceo’s, I didn’t request the ceo or bust. Shouldn’t there be someone knowledgeable at every major brand — chief financial officer, director of retail, senior vice president in charge of non-trick questions — who’s authorized to speak on a topic as consumer-facing as a returns policy? A nonresponse to so basic a question telegraphs discomfort.

Back to the upside, I happened upon the news that Opening Ceremony just changed its policy for greater parity between channels, effective Dec. 1. Carol Lim explained that when she and Humberto Leon opened their store in 2002, they instituted an approach competitive with those other boutiques, and later, took a similar approach with the launch of e-commerce. “We discussed aligning our policies then, but our systems were not linked and it was more a logistical issue,” she said. “But, we always allowed the customer who came to the store with an online return to do it in the store.

“It’s been an evolution toward making our policies more competitive and customer-friendly, so we decided with the soft launch of our new web site to finally align policies and make it easier for our customers to shop with us. We are still evolving and looking at how we can make ourselves as customer-friendly as possible.”

A statement from Valentino noted something of an early backlash effect across the industry. Whereas in the nascent days of e-commerce, brands instituted measures intended to “[create] confidence and trust in online buying rather than focusing on alignment between in-store and online sales conditions….Now many fashion retailers are dealing with the opposite problem — how to incentivize customers not to limit their shopping experience to the screen but to make time in their busy lives to visit physical stores.” In response, Valentino is “gradually rolling out cross-channel services.”

While the particulars of evolution/revolution today are faster-paced and headier than ever before, their themes aren’t all that new. Just ask veteran Bud Konheim of Nicole Miller, who responded to this query with a mini epistle. (It referenced an interview he gave WWD’s Sandy Parker in 1976. The headline: “The Country Is Overstored.”) Konheim related that in 1986, he and Miller opened their first store with a strict no-returns policy, one justified by the high level of service. But eventually, “competition [from department stores] and feedback from our salespeople caused us to change our return policy to today’s exchange accommodation.”

He sees a parallel in the e-commerce explosion. “We have a little bit of the same problem [now],” he said. “We deal with it on a case-by-case basis and give the boutique managers wide authority to adjust the policy based on common sense.”

E-commerce would not be possible without extremely liberal return parameters, for the most basic of reasons. Though technology wows, it still doesn’t allow for a hand to reach out from the screen and present the pants to try on. “Offering a total refund online is an additional service to compensate for not having the possibility to try the clothes on before buying. That’s the main reason,” said a spokesperson for Stella McCartney. That said, shoppers at the brand’s stores can opt to purchase online on iPads, independently or with the help of commissioned sales associates, with returns falling under the online policy.

Others argued compellingly that the nuanced experiential nature of in-store shopping justifies the retention of the credit-only policy. In store, said Cristian Notari, ceo of Max Mara USA, “you have a guided customer experience by our sales personnel to help with your selections to ensure a good choice and proper fit in our boutiques versus online where you have virtually no brand support with your selections. Therefore, since we invest resources in the selection process in store, we offer a different return policy as a result.”

Zhou also stressed that the two experiences are “very different to each other. Online, the customer is purchasing from a strictly visual standpoint….He or she might want to select a few things in multiple sizes and/or colors so that they can try on at home, and the policy is there to encourage that.”

It’s hardly controversial to note the experiential differences between online and in-store shopping. Some brand executives find it more difficult to articulate the fact that not all retail customers are equal. Every high-end store nurtures a well-tended roster of top clients who achieve their VIP status based on bottom-line loyalty — they spend. While some of this ilk have no doubt migrated online, at least for now, most remain brick-and-mortar clients first, drawn by service. They have their go-to sales associates; the seasonal buy often includes major pieces selected with them in mind. They may clock considerable time in the store — or not. Big-spender status carries with it certain privileges, including the option of at-home review wherein the sales associate sends out a range based on discussion and his or her knowledge of the client, who then selects what she wants. It’s a more glamorous version of the online multiple-purchase-and-return, and neither side wastes time with completing and then reversing the plastic transaction. Conversely, with store-credit the only return option, the more casual shopper, the anonymous foot-traffic type, is probably better off online for major purchases, unless she’s plenty confident that she won’t change her mind. (This has the collateral effect of putting the commissioned sales associate in competition with her own brand’s e-commerce channel, but that’s a different part of the retail conundrum.)

It all circles back to Konheim’s invocation of “common sense.” Which in turns harkens to the level of service on the selling floor — and the degree to which corporate executives trust in and empower their sales associates.

“Our primary goal is to provide excellent customer service across all channels,” Zhou said. “While we have a policy, we will do whatever it takes to make a situation right with the customer. We won’t let one single client walk out unhappy with our product and our experience.”

Ditto, Cynthia Rowley. “Our staff use their discretion with our VIP clientele,” she said. “The reality is, when a customer leaves one of our stores with a dress they’ve decided is worth purchasing, they are generally so delighted that they don’t even consider returning it — and you can’t get more consumer-friendly than that!”

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