The Restocking Fee

We all tend to get excited when we think we've found the "perfect" item on a new website, right?  I know I have been disappointed a time or two when the package arrives and the item(s) are not anything like I thought they would be. 

I know it makes me a realist to a fault, but before I get mad I consider the price I paid and honestly ask myself if the quality I've received matches up to that price level.  If so, well then lesson learned.  If not, then I will check into returning the offending item(s).  

Please note that I have also had instances where the "perfect" item I found actually turned out to be perfect and I was totally happy when I got it.  Life isn't all bad folks!

Occasionally, not often since the rise of the almighty Amazon, you find that there is a restocking fee associated with returning an item.  I find this is usually on the sites that had the best pricing.  Did you ever wonder why that is???? Well now that I work for an Ecommerce company that does their best to have the lowest prices, I can tell you why!  The big guys who boast "Free Returns!" and "Free Return Shipping!" can do that because they factor the cost of the returns into the price that everyone pays for the item.  Remember the golden rule: NOTHING IS EVER FREE!!

I'm not sure exactly how it's calculated, but I would image it has something to do with the percentage of returns they experience on a certain item, what the average cost is per return, and the projected sales for that item.  Do the math real quick and add that to the price of the item.  So even though maybe 1 out of 100 items sold will be returned, 100 out of 100 customers who purchased that item paid for a portion of the expected cost of returns.  

Now look at the website with the best pricing.  HOW can their prices be that much lower than everyone else's?  Well, the answer is likely that they are a small business with a better sense of what is fair.  They mark up their items just enough to cover their operating costs and maintain the necessary profit.  Nothing extra to cover the disgruntled housewife who expects a whole lot of fancy products for $.69 each and wants her 100% refund and free return shipping when she receives bags that are worth $.69.  

Can you guess which one we are?  

The long and the short is that we are a small company and price our items fairly for everyone.  When you order something with unrealistic expectations, we expect you to cover the costs associated with a return, not the other 99 folks who were expecting what they got.  There are credit card processing fees that don't get returned, and even get doubled when we process a refund.  Also, there are additional shipping charges that we absorb when you place the order, that we have to recover in order to break even once your order is refunded.  So we have a 25% restocking fee to cover these costs, and you have to pay return shipping.  That seems fair considering that our prices are easily 30% below our competition.  If you think about it, when you order from them you've already paid for your return even if you don't return the items!