This past weekend I ventured into my local Toys R Us store to return 2 gifts for my son who just turned 4. One gift I had purchased for him and another came from a guest from his birthday party. Both gifts were defective.
I went into the local Toys R Us knowing that I did not have the gift receipts with me, but hoped the store manager would be reasonable given a) both toys were defective and b) I've dumped a good percentage of my disposal income into the store since we moved here from the city.
"No gift receipt. No return," was my response. "Corporate policy" was the explanation.
Try as I might I could not convince the folk at the store to relent and what ensued was a very unpleasant exchange of words. I was incredibly frustrated, given the fact I am a "loyal", returning customer. Where was the empathy? Where was the empowerment? Where was the ability to make an independent decision?
After being told I had to call up an 800 number of the manufacturer of Hungry Hippos, Milton Bradley, which had come sans balls, I cracked. Come on - this passing the buck had to stop. Faced with the inevitable frustration of calling an 800 number, only to be put on hold for an eternity and be shifted from pillar to post, with no doubt a 6-8 week fulfillment period being my best case scenario, I politely offered to blog about my experience in order to bring this to the attention of "Corporate" in the hope of them recognizing a growing problem and disconnect within their operation - and no doubt - countless other retail operations just like it.
See, here's the problem. Toys R Us spends all this money on silly 30-second spots with talking giraffes designed to "persuade" kids to nag their parents to take them to the store, but the stores themselves are largely warehouses, void of life, talking giraffes and any experiential quotient whatsoever. If you've ever set foot in a Toys R Us, you'd know exactly what I'm talking about.
Furthermore, the disconnect between "Corporate" and "Retail" couldn't be more obvious when it comes to the "after-sale support" which exposes the flimsy sausage factory channel infrastructure which is decidedly un-consumer centric.
Here's the scary part. From what I was told, this (customers returning toys without gift receipts) happens roughly 12 times a week and when it happens, it's typically Dad doing the returning; it's typically on a Saturday and it's typically a shouting match that ends in frayed nerves, expletives and threats never to set foot in a Toys R Us store again.
Try and do the math. 12 x 52 = 624 x 836 (according to the number of stores in the US) = 521,664 unsatisfactory returns per year.
But wait, there's more....
Now attempt to factor in "lost revenue" associated to a) frequency of transactions (conservative guesstimate of 4 x a year), b) dollar value of average transaction (let's say $35) and c) word of mouth (let's say an ultra-conservative pre-social media factor of 15), and you might just be looking at a number of $1.09bn which is either in play or at risk. fyi - Toys R Us' 2005 revenue was $11.28bn, so my numbers aren't exactly Monopoly (or Linden) equivalents.
The sad thing is that the staff at Toys R Us really wanted to help me, but "their hands were tied". The real sad thing is that had a suit from Corporate been in the store (a sighting equivalent to Hailey's Comet), they would have whipped out their "key" and saved the day on an ad-hoc and unscaleable basis.
To help my local Toys R Us branch and ultimately to help the suits in the ivory tower of Toys R Us that houses talking giraffes and Neanderthal return policies, I'd like to offer up some free advice on how to fix an obvious problem in your stores (please feel free to add to this list):
- Put brightly-colored stickers on every piece of merchandise (ala Stew Leonard) which reminds people to keep their receipts
- Put some kind of sticker on all merchandise which clearly indicates that product was purchased in a Toys R Us store (this counters the problem of people returning Target purchases to Toys R Us stores)
- Generate electronic receipts which members of the Geoffrey club (assuming you have one) automatically get when either purchasing directly or when a gift is purchased for them
- In-store signage, prominently displayed at points of exit
- Discretionary budgets for store managers to evaluate on a case-by-case basis
- Training cashiers to remind each and every customer upon checkout about the return policy
- Better training to in-store managers to quickly inform customers that a credit card is all they need (assuming they purchased the product with the same card) in order to query the in-store database and bring up a copy of the transaction - I found this out only after 15 minutes of arguing
- No questions asked exchange policy (!) for either all items under $20 and/or ALL items - I know this has about as much chance as happening as flying pigs or talking giraffes, but it's what separates the me-toos from the truly exceptional.
Bottom line is that retail is a numbers game and when suits and shareholders get too stuck on numbers, they forget that they're in the human business. When faced with one disappointed mom, angry dad and distraught kid, all they can do is multiply this case by their number of transactions in order to arrive at an unacceptable explanation of, "but if we do this for you, we have to do it for everyone." So I've done the math to show you how much money - directly (lost business) and indirectly (through word-of-mouth) you could lose if you don't do something to fix one of the many disconnects between corporate and retail.