Tuesday, October 13, 2009

Restocking Fees, What?

Erica Monday MorningIt's Monday morning and the phones are ringing like crazy, and I'm typing away like a mad woman (I'm pretty sure I can see my fingertips smoking) and then the call comes in. A customer wants to return their order because the finish didn't quite match everything else. I don't mind doing a return on product sometimes it's just not right, but with returns comes restocking fees and that's not always the most pleasant call to take. I'd like to shed some light as to what restocking fees are and why they're charged.

When an order is placed; a person has to manually process the order, the order is sent to the warehouse-someone pulls the order and makes sure it is correct, a different person packs does a double check to make sure it's correct and ships the order to the customer, then the order goes to accounting and gets charged. When an order needs to be returned this process is almost exactly the same just in reverse. Except, someone has to inspect every piece and make sure it's in perfect resalable condition when it comes back. In most cases a return is made to a manufacturer since that it where it is shipped from and they will forward us a copy of the credit memo so that we can issue credit to your card. This process takes a lot of manpower and time to complete.

There are some manufacturers that literally stock hundreds of the same item and the process is fairly simple, but there are a good number of manufacturers that offer one product but with a number of different configurations. When an order is placed with these manufacturers you are essentially getting a custom piece of hardware. These items are assembled to your specifications and if they are returned they need to be disassembled. There are also companies that sell specialized, niche hardware (let's just say a pine cone knob in antique brass) now, this is something that's not going to fit into everyone's home decor like a round satin nickel knob would. Naturally, the stock availability will be much lower on these and when a few sell the manufacturer replenishes their stock. If that item were to come back to them, they would be "overstocked."

I don't like having to enforce these policies, but I can at least understand whey they are charged. There are a few manufacturers that do not charge a restocking fee, but these are a very small number. I do think that restocking fees are a necessary part of doing any kind of business. So, what type of restocking fees am I talking about exactly?

Our policy on The Hardware Hut is that if the item is something that is stocked here in our warehouse and it is perfect when we receive it (original packaging, no scratches, dents, other signs of use) then we will not assess a restocking fee(there are a couple of exceptions). The majority of items on our site are shipped directly from manufacturers and we have to enforce their restocking policy. The polices are displayed via link on every single product on our site. These restocking fee policies vary anywhere from 5% to 35% depending on the manufacturer. Just to give you an idea of where we are on the spectrum of internet hardware retailers, I have scoured all of our major competitors websites and looked at their policies. Here is a sampling of what is out there:

"Samples cannot be returned-25% restocking fee on all items. No returns on special order items."
"Return must be over $60.00"
"Refund of store credit valid for 6 months-25% restocking fee."
"No returns on opened packages-if shipping was free at the time of purchase, credit will be issued after restocking fees and the original shipping expense is assessed."
"Stock items 15%, non stock items 25%-30%"

One site has a 20%-40% and most sites have a flat 25% restocking fee on all items(with a few exceptions). There were also three sites that I could not locate their return policy at all (and I think I'm pretty internet savvy.)

After looking through these other sites, I'd have to say we're right in line with the rest of the industry. As a consumer myself, I'm always comparison shopping on what my best value is and what my repercussions are if it doesn't work out. I think a lot of sites try to conceal what there policies are, but I feel it's so much easier on everyone if it's all out in the open. Not only are our policies displayed on each item, but there is a link in the shopping cart, and there is a ton of helpful information in our FAQ section. With that, I hope you've become better educated consumers. That way there are no surprises, regardless of where you shop online. If you have any questions or need clarification feel free to contact me.

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