Customer Service And Return Policies example essay topic

BACKGROUND Introduction The purpose of this paper is to determine how customer service and return policies in the retail industry, primarily WAL-MART, can be improved. It has been thought for many years now that outstanding customer service and liberal return policies satisfy the average retail consumer. The more convenient their shopping experience is the more apt they are to return to the store. This is thought to be very much the same with return policies. The more liberal the return policy is, the more apt a customer is to shop at that store.

People buying gifts want to be assured they can be refunded if their friend or companion is not satisfied. This is the same for themselves also. The customer wants to be assured they are getting their bang for their buck so to speak. If they do not, they expect to be refunded or provided an opportunity to exchange merchandise. The question that the WAL-MART, as well as other retailers need ask, is if making return policies more liberal will help improve customer service and profits, or hurt profits by increasing return rate. Personal Interview Name of Firm: WAL-MART Stores, Inc.

Contact: Brendan Barrett, Store Manager in Delafield, WI (Taped Session) STORE HISTORY Opening Date: May 17, 1989 General Information: WAL-MART is a well-known retail giant that serves customers nationally and internationally. WAL-MART provides customers with just about any of their household needs including domestics, house wares, electronics and in Super centers, groceries. They are well known for their low prices, outstanding customer service and liberal return policies as an overall corporation. This has begun to decline in some stores individually. Main Competitors: Target, K-Mart, Menard's, Osco, Walgreen's, Shop ko CUSTOMERS Do you feel that all of the store's customers carry the same feelings about good customer service and lenient return policies? Overall, I think that everyone feels that these are needed in the store, but some people are more emotional and more apt to act on a concern than others.

How do you feel the customer service is in the store? I feel that the customer service is excellent. The employees have good knowledge of store products and meet the needs of the customer every time it is possible. This is the same for the managers.

WAL-MART is well known for its overall outstanding customer service. Do you feel that WAL-MART serves its customers better than any of its competitors? Of course! Every store does not always abide by the corporate rules but as a whole unit, WAL-MART has a competitive advantage in this area. Do you feel that when customers complain, they are generally upset about an experience in the store or do you feel the customer is letting out frustration or stress from other problems? I am not a psychologist but I will say that a lot of customers get upset and yell at employees / managers with no argument, rhyme or reason.

Although it appears that the customer is stressed about other things, it is important to listen to them and do what you can to make them remember how pleasant you were with them and willing to fix a problem. Can you honestly say that you have satisfied every customer that has come through the store? Of course not. If that were the case, we wouldn't do research to find out how to keep good customer service and high profits constant. RETURN POLICIES You feel that strict return policies and poor customer service are the downfall of major retail companies such as Montgomery Ward and K-Mart? I definitely think that it has a significant role.

If the service is horrible and the return policies are inconvenient, than who in their right mind is going to want to shop there. I also think that store cleanliness and lack of marketing / advertising have a major role. How do you feel WAL-MART's return policies compare with other stores? I'll say the same thing I did with our customer service. WAL-MART is well known for its leniency when it comes to returning merchandise. Customers prefer this for couple of reasons.

The first reason is for the honest customers. They feel that if they are not satisfied with a product of ours, they should be able to return it in any manner. We give this to them so they will come back and shop again. It is also a matter of convenience. The second reason customers prefer our return policies is directed towards the thieves. They like our store because if they manage to steal something or bought something over a year ago, we will return it without a receipt or at least give them credit toward the store.

This creates major "shrinkage" problems, however, in my opinion, the honest customers out-weigh the thieves and even though we are returning more merchandise, we have more returning customers that are satisfied. This creates more profit in the long run. How do you feel about the strictness of Target's return policies? I don't really care because I don't work for them but I will say that their annual "shrinkage" is much less that ours. (Shrinkage means unexplained loss of merchandise or profits.) Target does well with annual sales despite the strict policies, but then you have to look who is the highest grossing retailer in the market today. It's us so we must be doing something right.

Is there anything that you feel the company can do to improve the return policies and customer service? Customer service can always be improved. This is done primarily through more training of product knowledge and the hiring of friendlier and more personable employees that are able to deal with stressful encounters. When it comes to our return policies, I feel that even though Target is very strict, they have found a way to combat the "no receipt rule". They offer gift receipts that don't have the price on them. These can be given to people receiving gifts.

A lot of other retailers started to catch on to that and I feel it may be a good idea for us. Are there any future plans to add or change any of the return policies? No ARTICLE RESEARCH Keeping Up With the Vigilante Consumer By Patricia Fripp In this article Patricia Fripp exposes the "vigilante consumer". This sounds more horrible than it actually is.

A "vigilante consumer" is one who is a customer that is persistent in making sure they get value, service, convenience and a lot of attention when they spend their hard earned dollar. She offers a variety of tips to the retail industry as to how to maintain the customer service that is demanded in today's world. Some of the tips that are brought to the reader's attention include the basics. This means starting from the beginning. Make sure the customer is aware of your return policies. By doing this, you can eliminate negative encounters with customers.

Patricia also mentions strategic alliances are a plus. In the retail industry it is not always a bad thing to follow a trend. This may include following other competitors when a positive customer service policy is instilled. This article pertains to the research because it offers ways to make customer service and return policies better as well as identifying the importance of the two in the retail industry.

Not All Customers Are Created Equal By Jim Dion This article proposed by Jim Dion goes into detail about the change in attitudes, needs and wants of the consumer over the years. Thirty plus years ago, customers were segmented by age, job, education and sex. Findings were that services provided generally appealed to those particular groups. In present times, people cannot be segmented into these categories because the majority of them express different values and opinions.

They all shop in different ways, become satisfied in different ways and become upset in different ways. The key to finding customer satisfaction is to target the areas or common trends of the industry as a whole that raise concerns. Jim has categorized people in three different categories. The first group accounts for the most profits and that accumulates to anywhere from 10-20%. The second group has potential to help gain significant profits and they account for 40-50% of shoppers.

The third group, known as the "bottom feeders", represents 20% of the customer base. These customers rarely purchase merchandise and see shopping as a social experience. Little attention should be paid to them. According to the article, in the 1970's there was only a 1% return to stores. In present times, the return rate is nearly 5%. This article is vital information to the research because it helps identify and locate problems.

By categorizing people in proper segments and understanding their behaviors, you can begin to improve areas of customer service. Does the Early Bird Get to Return? By John Ewoldt This article displays information on how the customer can assure that a store will return their unwanted goods. It basically provides customers with an easy way to avoid problems at the return desk. One constant tip in the article was to keep receipts and don't pull off tags.

Other advice was to ask about holiday return policies. This article is interesting and parallel to the research because by merely posting and article such as this, you can assume that returning merchandise overall is an inconvenience to the customers. This recognizes the problem. John directs this article towards the consumer instead of the retailer. This may suggest that most of the problem lies with a lack knowledge on return policies by the consumer. Hassle Free Returns-What You Need To Know About Returning Items At Retail Stores By Melody Vargas This article provides yet more ways to side-step potential problems at the return counter when returning merchandise.

This article is directed towards the consumer as well. Suggestions include keeping receipts, asking for gift receipts, knowing the retailer's return policy, and not delaying the return. These problems can be looked at by the retailer in terms of ways to combat inconvenience. This may include extending return time, adding gift receipts, etc. Tough New Rules of Returns By Sandra Evans What is described in this article is an overall tightening of return policies in the retail industry in recent years. Major areas affected in the policy changes include electronics, movies and music.

Part of the problem stores were having was amazing. People would bring back large television sets the day after the Super Bowl, and chainsaws after they have cut down a tree. This concept has been dubbed as "renting" by the retail industry. According to the article, retail stores lose an estimated 15 billion dollars per year in returns. This pertains to the research because it may suggest a larger problem in the overall retail industry. It also suggests that it may do more good for stores to tighten up on their return policies rather than loosen them.

Rewarding Employees: 7 Tips for Success By Fredrick F. Reichheld, W. Earl Sasser, Jr. This article stresses the importance of rewarding employees. According to the article, by rewarding employees you are instilling a more positive attitude in them. This will in turn help benefit the company.

The happier the employee is, the happier and friendlier they will be to the customer. Mr. Reichheld and Mr. Sasser offer seven tips to successful rewarding: 1. Don't rely on rewards to fix a problem 2. Don't reward employees for doing what's expected 3. Don't be cheap with your reward 4. Avoid to much Extravagance 5.

Reward more than just performance 6. Make sure the reward is meaningful to the recipient 7. Reward Employees who complain The last tip is good because if someone points out a problem and nothing is done to fix it, it will make other employees upset as well. This article pertains to the research because it may be a way to improve customer service. Making sure your employees are happy or maintaining a positive atmosphere will get passed down to the consumer. American Express and the NRF Foundation Unveil Landmark American Retail Excellence Study Unknown Author This article was about the American Express Company aiding in building the American Retail Excellence Study.

This is a very large study based on the quality of retail companies. 21 of them were noted in the study. Areas of the study include customer service, store cleanliness and store policies. Some of the top companies were Bluefly, Talbot's, The Home Depot, Homer Reed Ltd., and The Kittery Trading Post. This article relates to my research because it identifies research taking place that pertains to all aspects of the retail industry.

When stores are recognized on a positive note it is obviously good for the company. When it is recognized as bad, it is apparent that certain areas are in need of change. A professional study such as this can identify industry trends pertaining to customer service and return policies. K-MART'S FAILURE- Blame Lack of Customer Service and Cost Consciousness By John Tschohl According to John Tschohl, poor customer service and cost management ruined the one time retail giant, K-Mart. The article makes constant comparisons with WAL-MART. Operating costs for WAL-MART were much lower than K-MART.

The article also states that dollars were being passed on more to executives than the company itself. This was not the case with WAL-MART. More dollars were put into their store to provide the customers with a better shopping experience, thus creating a substantially larger amount of profit for them. This article relates directly to the research in the sense that it links major downfalls in companies to the type of research being conducted. STATISTICAL ANALYSIS WAL-MART Ratings- (Courtesy of web) Overall rating- Overall purchase experience in the store 8.3 of 10 Would Shop Here Again 8.3 of 10 Ease of Ordering- Speed of Checkouts 8.7 of 10 Product Information- Product Knowledge 8.3 of 10 Prices- Relative to competitors 8.7 of 10 Product Selection 8.3 of 10 Customer Support- Complaint / question handling 7.9 of 10 Product Met Expectations 8.8 of 10 o This information helps the research significantly. It provides a general rating and overview of WAL-MART stores.

Policies, question handling customer service were all addressed. This information aids in exposing areas that need to be improved. WAL-MART Customer Reviews- (Courtesy of web separate as previous information) Overall Experience Past Week Past Month Past 3 Months Positive 96% 92% 84% Neutral 2% 5% 4% Negative 2% 3% 12% o This Data may be used to help determine the reason of decline in customer satisfaction over monthly time periods Target, Inc. Company Report Card- (Courtesy of web) Overall Satisfaction Grade: C+ Planet Feedback Breakdown Top Complaints Staff 32.7% Other 26.0% Returns / Exchanges 21.2% Selection / Availability 6.7% Price / Value 3.8% o This information will aid in determining what the major problems in WAL-MART, Inc. could possibly turn into when dealing with returns and customer service. It will provide a gateway to brainstorm ways to always stay ahead of Target and other major competitors. General Business Statistics- (Courtesy of web) o If you increase customer retention by 5%, you will increase store profit by 100% o Disposable income is growing only 2% every year o U.S. businesses will invest more than $1 billion this year on computer technology, just for customer service departments This data provides incentive to research ways to increase customer retention with little money to work with.

It also solidifies the significance of spending on customer service with businesses spending $1 billion annually. It will aid in looking into the area of computer technology in customer service. CONCLUSION The validity of strong customer service and convenient return policies is significant in the retail industry. When observing the retail industry, one can make the statement that many different policies pertaining to returns and customer service exist; especially from store to store.

These have all had different reactions from customers. There is definitely a different atmosphere and customer attitude when you walk into a WAL-MART as opposed to a Target or K-MART. Some of the research provided indicates this difference in companies and their popularity to the consumer. Conducting a survey and research to determine how to improve in this area will benefit not only WAL-MART; it will benefit other stores moving in the same direction. There are definitely apparent trends in the research presented. The information gathered accurately portrays WAL-MART, as well as other stores mentioned.

The information gathered is proof alone that there is an importance of customer service and return policies in the industry. There is an abundant amount of information available. The information chosen in this report is the most accurate as well as the most trend defining.