L.L. Bean announced a major change in its famous product return policy yesterday. The Maine-based retailer always used to allow customers to return goods years after purchase with no questions asked. Their lifetime guaruantee stood out as one of the distinctive elements of the firm's value proposition and brand positioning. Now, though, the company has put a one-year limit on product returns. Here is what the company told the Wall Street Journal: “For over 100 years, our guarantee has worked just fine, but in the past five years in particular, our guarantee has been misinterpreted as a lifetime product replacement program and we have seen a large influx of returns that have nothing to do with product quality or satisfaction." Boston.com reported on the rampant customer abuse of the L.L. Bean's longstanding policy, leading to this change in company policy:
Over the past five years, the company has lost $250 million on returned items that are classified by the company as ‘‘destroy quality,’’ said L.L. Bean spokeswoman Carolyn Beem. ‘‘Destroy quality’’ items are destined for the landfill. First-quality products are returned to store shelves and ‘‘seconds’’ are sold at outlets or donated to charity. It’s not uncommon to hear stories of people clearing out basements of used or unwanted L.L. Bean products, sometimes decades after their purchase. Some customers replace the same items year after year to get the latest outdoor gear. Some even head to thrift stores, yard sales or junkyards to retrieve L.L. Bean items that they then return.
Sadly, a small minority of customers have spoiled it for the rest of the company's loyal fans. For L.L. Bean, the policy change is not without risk. However, the fact that competitors, including REI, had already made similar changes in recent years lessens the risk. Moreover, the company does leave itself the ability to address customer concerns on a case-by-case basis. The new policy on the L.L. Bean website states: "If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund. After one year, we will consider any items for return that are defective due to materials or craftsmanship." In other words, if you are a loyal customer and have a return after one year, the company retains the ability to address your concerns. They simply do not want to have to provide a blanket, open-ended return policy for all.
In general, I think L.L. Bean appears to be handling this issue well. They clearly did their homework vis a vis loyal customers and their competitors before making this change. However, I do wonder why they didn't choose to simultaneously announce some other measures to demonstrate their commitment to their most dedicated fans. An olive branch to the hard-core fans, offered in conjunction with this policy change announcement, might have provided a more upbeat message and offset some of the negative reaction they surely will receive.