Dumb And Dumber
As I reflect upon retail for 2004 and particularly the Christmas 2004 shopping season, two thoughts leap out at me. Number one: Christmas 2003 saw the incredible rise of gift cards to the point where almost half of all American families, 48.7%, gave a gift card. Then in 2004, we started getting feedback from angry consumers who found their gift cards to be much less than the original gift value. Consumers learned about expiration dates after a year, a $2.50 monthly maintenance fee and other value reducing service charges.
When Christmas shopping began in November 2004, only 36.7% planned to give gift cards this year compared to 47.6% last year in November. I asked those ten percent of shoppers who gave gift cards in 2003, why they were not doing it again this year. The answer was negative feedback about the fees and the admonitor to his listeners by Clark Howard, a very popular radio talk show host. He warned his listeners to not give gift cards unless they found out ahead of time if that store had any service fees in their gift card program.
During this Christmas season we learned of the former governor of Georgia bringing a class action lawsuit against Simon Properties for their fees on gift cards. How dumb can we get? Gift cards are given for two reasons, #1: Convenience to the giver so the recipient can get what they want when they want to use it and #2: The return policy of retailers has made it so difficult to return items, the gift card becomes the only alternative in this tough return era of retailers.
By the end of the Christmas shopping season, about the same number of people gave gift cards this year, but only after they could not find anything they wanted to give so they resorted back to a gift card. Many store employees were grilled by shoppers about gift card policies in their store, and I witnessed more than three such instances myself, and each one was not the nicest conversation of the day. So retailers need to watch out, don’t kill the gift card goose that lays the golden egg.
Now the dumber part.
Retailers such as Best Buy and others got considerable publicity about their new store software program that identifies consumers who return too much. Best Buy wants to classify their customers into the “bad” group and the “good” group. Eventually telling customer who return too much, they can no longer return their purchases. So, if a person returns a new product still in the box unopened with the receipt and they are now over their limit, too bad, we won’t take it back!
I can see it now, these TV advertising ambulance-chasing attorneys saying, “Have you been refused a return at Best Buy? Call us at this number and join the hundreds of others who are bringing a class action lawsuit against Best Buy.” That’s all we need today in retail, more legal actions against retailers by their customers.
I can’t think of a dumber store policy than to refuse a customer for returning a perfectly unopened box!! I can see if the item is not in ideal condition, but a new item is a whole different matter.
Retailers need to re-consider the business they are in. It is not Wall Street, but rather Main Street. Retail needs customers and the more restrictions they place on gift cards and accepting returns, they will see more legal action. My father once told me, “Son, a tow that can’t support one lawyer, can always support two!”
We may soon find out how many attorneys would like a slice of the retail pie. I for one would say, “Stay away!!”
by C. Britt Beemer, Chairman
America’s Research Group