This is why we can't have nice things - LL Bean changing its return policy

[Henry Krinkle]

Can't say I blame them one bit.

FREEPORT, Maine (AP) — L.L. Bean’s generous return policy is going to be a little less forgiving: The company, which has touted its 100 percent satisfaction guarantee for more than a century, is imposing a one-year limit on most returns to reduce growing abuse and fraud.

The outdoor specialty retailer said returns of items that have been destroyed or rendered useless, including some purchased at thrift stores or retrieved from trash bins, have doubled in the past five years, surpassing the annual revenue from the company’s famous boot.

“The numbers are staggering,” CEO Steve Smith told The Associated Press. “It’s not sustainable from a business perspective. It’s not reasonable. And it’s not fair to our customers.”

https://www.boston.com/news/business/2018/02/09/ll-bean-return-policy-change

[politicaljunkie41910]

1. I don't blame them either. It's a shame when some people ruin it for everyone by being ridiculous.

[TheBlackAdder]

23. I was going through my closet, a bunch of tagged items. I could have been a dick and returned them.

Last edited Fri Feb 9, 2018, 03:02 PM - Edit history (1)

But instead, it was my bad decision, and I eat the cost. A cost I absorbed years earlier.

Some of the items were 3-4 years old. A few were over 5 years old and one was over a decade old.

[Codeine]

2. People suck.

This is a universal rule that applies across every culture and every period of history. Human beings are simultaneously remarkably noble and pathetically ignoble in equal measure.

[Hoyt]

3. Yeah, good PR but I'm sure folks abuse it.

[Zoonart]

4. Wonder if it's a little bit of sabotage...

I stopped buying from them years ago as their corporate giving includes forced birthers.
Or maybe it is just because of a general lack of respect for everything.

[spooky3]

9. According to this, that is not true.

https://www.google.com/amp/www.esquire.com/style/mens-fashion/news/amp52252/ll-bean-trump-statement/

[Zoonart]

12. Perhaps they. have changed their policy...

It was true at the time...80's 90's. I guess I can hold a grudge.

[still_one]

5. That is what people were doing with Costco's generous return policy on electronics that Costco had

to modify it because people were abusing it

[spooky3]

6. Agree. And it helps keeps costs down for honest consumers.

[unblock]

7. "it's not reasonable. and it's not fair to our customers" lol

ok, sure, it's not reasonable, and it's not market standard, so i can't really blame them, especially if the numbers are in fact as they suggest (which wouldn't surprise me).

but "it's not fair to our customers" as an excuse to curtail a policy that only benefits the customers?


come on, that's a really lame effort to spin something that didn't really need to be spin.

[spooky3]

13. I disagree. If you have to pay $40 rather than $37 for jeans because

$3 goes to cover unreasonable or fraudulent returns, you are harmed.

[unblock]

17. i'd agree if it worked like that, but it doesn't.

they're not charging you cost plus a modest profit.

they're charging a price based on maximizing profit
that price point is not much influenced by product returns.

in short, product returns go almost entirely straight to a company's bottom line.

shareholders pay, not the customers.


in rare cases, there may be some specific products that are profitable without a generous return policy but not profitable with.
in those cases, canceling the generous return policy might allow the company to sell a product that they couldn't sell otherwise.

that would be a marginal benefit to customers.

but for the products they're already selling, no, they're not likely to lower prices, at least not as a function of modifying their return policy.

[spooky3]

20. Disagree. All product returns affect the costs of operations.

The more costs that businesses incur from losing $ to fraud, shoplifting, employee theft, as well as materials, labor costs, etc., the lower the profit margins, everything else being equal. This is a cost they can control and reduce without reducing employee pay or the quality of goods sold. So it is very smart of them to have tracked unacceptable increases in returns to find a way to be more efficient, enabling them to compete.

[unblock]

24. this is true in markets that are highly competitive commodities.

the more specialization, customization, or differentiation, branding, or market power there is, the easier it is to separate optimal pricing from costs.

if you figure they are pricing as low as costs allow given a reasonable profit, then yes, lowering costs could lead to lower prices.

i have a more jaundiced view as to how well our economy conforms to properly competitive capitalist models and expect them to keep prices where they are and send the savings to the shareholders (and the executives) rather than to the customers in an effort to increase market share.

[spooky3]

26. So you are arguing that LL Bean is not in a competitive market?

What is your evidence of that?

[unblock]

29. i just think they have enough product differentiation, specialization (outdoors) and branding

to not have to always be pushing to be the lowest cost player, which in fact doesn't seem to be their strategy just from looking at their prices.

they're a big player with a fair amount of loyalty in their customer base.


wholesale clothing is very competitive. retail for outdoor clothing less so, particularly for brand name stuff.

[spooky3]

30. It does not matter how "big" they are. It matters how much market concentration there is, and

whether they can control the markets and prices.

They can't.

It also does not matter whether the company is "pushing to be the lowest cost player." This is about margins, not about costs alone, and market concentration.

Customers can find products like LL Bean's in many places. Lands' End is one of MANY online competitors, and customers can buy jeans at many brick and mortar stores.

Sorry, but you have the burden of proving that they are not in a competitive market--you need citations with evidence to convince me.

[unblock]

31. well it's just my opinion, i haven't done an econometric study in a long time ;)

we'll see if they lower their prices.

[GulfCoast66]

22. Respectfully disagree

A returned item is no different than a stolen one on the cost the the merchant.

Both drive up costs.

[unblock]

25. see post #24.

[GulfCoast66]

32. I did

And it is incorrect. At the end of the day you are arguing that raising cost on retailers does not push up cost to consumers. LLBeans very actions defy your theory. The are having to reduce cost so they can keep their prices down to allow them to compete with their competition.

[unblock]

33. i'm not arguing that it's a blanket disconnect. it depends on the market and the business.

for instance, i would hope we could agree that if apple could shave $10 off the cost of an iphone on way or another, they're not particularly likely to shave $10 off the price of an iphone.

the extra market share they could gain from cutting the price by $10 would not come close to justifying the loss of $10 profit per customer, especially given the brand loyalty in that market. the big per unit profit margin is a big clue.

on the other hand, a pure commodity like copper or aluminum is vastly more a function of cost. cut costs by a penny and the price is likely to come down by nearly that much because to a large extent, price is the only thing to compete on.


the question in this case is where does llbean fall in this spectrum. i'd say somewhere in the middle. they're certainly not in apple's enviable position, but then who else is. but they're not a pure commodity either. so in theory there could a a basis for a split, with some benefit going to shareholders and some benefit going to consumers as a partial price reduction. but in practice this is too small a factor and i really don't think they'll cut prices at all over this.

[unitedwethrive]

15. It is not fair to customers that they have to pay higher prices

to cover the loses resulting from the old policy. Makes perfect sense. Now to see if the change Has any effect on prices.

[unblock]

18. see reply #17

in theory, in perfectly competitive markets, there's some truth to that.

in practice, though, not so much.

[LisaM]

27. It's not fair to the honest customers.

I worked in a returns department for a while and the crap people tried to pull still upsets me. And they were mean about it. The less of a case they had, the more blustery they were.

It's a cost to the business, and yes, it does get passed on to honest customers.

[ProfessorGAC]

8. Your Post Title Is Apt

People abused the system and forced them to do something. Like the consumer advocate says in the article, one year with proof of purchase is still pretty generous. If it takes somebody more than a year to decide they didn't like something, it raises reasonable suspicion as to their motives.

[RKP5637]

10. Some people just plain suck in general. It's taken me years to get that through my

thick trusting head.

[former9thward]

11. A year is way too long.

30 days at the most and with a receipt.

[Angry Dragon]

14. also agree

[Historic NY]

16. The policy works only when people are honest.....

and don't take advantage of the generousness of the business.

[madaboutharry]

19. I will never understand people.

It would never even enter my mind to do something like that.

I have been a L.L. Bean customer for a long time. The only thing I have ever returned to them was a pair of pants that I didn't like the way they looked and a few months ago I exchanged a hiking boot that came with a bent lace hook. They sent a new pair right away.

You are right, Henry Krinkle, it is always a small number of people who ruin things for everyone else.

[spooky3]

21. Im also a long term customer. The only item I returned

Beyond immediately after the sale due to color, size, etc. was a pair of jeans described as “preshrunk” but which shrank more than 1.5 inches despite only cold water washing. They still sell items like this (really wish they wouldn’t call them “preshrunk”) so customers simply have to size up. (I buy “tall” and another size higher despite being 5’6”.)

[MontanaMama]

28. Wonder when REI follows suit?

They have a very liberal return policy and they're my favorite outdoor clothing retailer. They treat their employees well I hear. Yes, a few bad apples spoil everything. Jerks.