What Happens When Stores Let Customers Return Whatever They Want?

I'd like to return one boot?

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DAVID GREENE, HOST: And now a tale of two retail companies that for decades made a bold promise to their customers: You can return anything, at any time, for any reason, no questions asked. But this summer one of those companies reined in that guarantee.

NPR's Dan Bobkoff from our Planet Money team reports on how two similar companies - REI and L.L. Bean - arrived at two very different places.

DAN BOBKOFF, BYLINE: When I first spotted Sunny Pettinati walking into the L.L. Bean store in Yonkers, New York, she seemed a little embarrassed.

SUNNY PETTINATI: I'm returning a sweater that I purchased, I think, about 10 years ago.

BOBKOFF: It sat in a drawer, unworn.

(SOUNDBITE OF TAPPING ON KEYBOARD)

BOBKOFF: And a few moments later, Pettinati leaves with a smile and a gift card.

(SOUNDBITE OF TAPPING ON KEYBOARD)

UNIDENTIFIED WOMAN: And like I said, these guys don't expire and you can use them online in the store catalog...

BOBKOFF: L.L. Bean has taken back a live Christmas wreath because it had turned brown, a shirt ripped after a car accident by the rescue crew. My own Planet Money colleague, Lisa Chow, has been returning her L.L. Bean backpacks for two decades.

LISA CHOW, BYLINE: The zipper was broken and I just, yeah, I couldn't zip up the bag. And so I thought OK, why not?

BOBKOFF: Over and over, zipper breaks, she sends it back. A whole new one comes in the mail for free. She's not even sure how many backpacks she's had now.

CHOW: At least three. Probably four.

BOBKOFF: Basically, when you bought this backpack, you bought a subscription service to backpacks.

(LAUGHTER)

BOBKOFF: Like unlimited backpacks for life.

CHOW: Yeah. Yeah. I guess you could see it that way.

BOBKOFF: You could also see it as working the system. I put this question to Steve Fuller, L.L. Bean's chief marketing officer. He was a model of non-judgment.

STEVE FULLER: If she believes her zippers should last a longer time, we'll respect that and we'll refund her money or give her a new product until she's happy.

BOBKOFF: Is that right?

FULLER: It's up to each person and to decide what they believe is fair.

BOBKOFF: In a sense, L.L. Bean's return policy is an exercise in moral relativism. Customers even debated on the returns line or made comments to the staff.

FULLER: A customer will come up to the desk after watching a return, and she or he will say: I can't believe you're taking this back. I hope these people aren't ruining it for the rest of us.

BOBKOFF: Which brings us to REI. Now, REI used to be like L.L. Bean. It too has stories of crazy returns - fire-charred camping tents, heavily used baby carriers. And says, Tim Spangler, REI's senior VP of stores, some items that were clearly done...

TIM SPANGLER: I've seen some 15-year-old shoes that went directly into the trash in a toxic waste bag.

BOBKOFF: So why did the two companies diverge? REI started to worry it was getting a reputation as a sucker. Customers started to give it nicknames.

SPANGLER: Rental Equipment Incorporated was one. Rent Every Item was one. Return Every Item was another.

BOBKOFF: Two years ago, REI started to notice the number of people returning really old stuff was increasing fast. Some then talked about it on social media, which led to even more people bringing in their old junk to get refunds. It was hurting profits. Something had to change.

After intense debate, a new policy: From now on, you get only a year to return your stuff. Moral relativism just doesn't work at REI.

SPANGLER: And I don't want to be in the business of looking somebody in the eye behind the counter and questioning the morality of their return. I want to be able to say, look, it's outside the confines of what we agreed upon when you bought it and, or it's within it, and we're going to take care of you, and leave it at that.

FULLER: I have never been in a meeting in which we've questioned the value of the guarantee.

BOBKOFF: In fact, says L.L. Bean's Fuller, the question that comes up at meetings is, are they talking about the guarantee enough?

If anything, L.L. Bean seems to be welcoming the customers REI might be willing to let go. Behind its store counters, the guarantee is written in what looks like size-200 font. And there are a few reasons why this may be better business for L.L. Bean. Many of its sales are mail order, so it's a little harder to do a return. And he says the more extreme the stories - like my colleague returning the same backpack over and over for two decades - the more people talk about L.L. Bean.

FULLER: How many times has your colleague talked about the fact that she's returned that backpack, and L.L. Bean gives her a new one without question, and L.L. Bean wants to make her happy? That's really the value of the guarantee.

BOBKOFF: As a business practice, it's expensive. But as advertising, it's cheap. Unless all those schemers from REI start working on L.L. Bean.

Dan Bobkoff, NPR News.

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