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Retail Rant: “No Questions Asked” Return Policies Are Killing The Industry

Retail Rant: “No Questions Asked” Return Policies Are The Single Biggest Threat To The Snowboard Industry

rei_backcountry_return_policy

Buy, destroy, return…

Words: Dennis Nazari

Ok, so a bunch of consumers and a couple of retailers are not going to like the spotlight this rant will create, but try to separate yourself from personal gain and look at the greater good of the snowboard industry .

For more than 10 years now specialty shops and snowboard retailers in general have been going belly up at a noticeable rate and everyone points to online competition, price wars, the economy, direct selling by manufacturers, lack of snow , cost of participation, etc.

While it is true that these are factors in the reduction of participation rates and retention rates for snowboarders which have been declining, the one fact that’s been ignored is that over the last 10 years these factors have been up and down and none can be singled out as the main damaging factor to snowboard retailers.

The biggest threat to the health of the industry is not listed above, in fact it’s more powerful than all those things combined and it has the potential to do to manufacturers what its been doing to retailers for the last decade. 

I challenge anyone reading this to find one unhealthy aspect of the snowboard industry that is not directly tied to overproduction of goods.

This fact has been a problem for more than a decade but then add the ability for consumers to be able to buy anything use it all season, abuse it , break it, and not be bummed at all because they can just take it back to the store and get their money back or swap it out for a new one.

Then they can trash the new one the next season, then return it AGAIN, and just keep doing it over and over again.

Imagine only having to buy something once and never having to buy it again.

How cool would it be to buy a new car, wreck it, and just go back to the dealer and get a new one no questions asked?

Now this might sound like some kind of perfect utopian socialist world but the fact is that this world exists today in the snowboard and ski industry and it is what’s killing the action sports industry as we know it.

An undercover look at REI’s return policy in action:

YouTube Preview ImageNow if you are a consumer who is benefiting from this utopia or someone that works at one of the two retailers that encourage return abuse, you’re not going to agree with much in this rant, but try to forget about your socialist tendencies for a minute and look at the unfair playing field that has been created and what it is doing to the overall health of the snowboard industry.

This cancer is called the “no questions asked return policy” which only two snowboard retailers in the industry offer: REI and Backcountry.com.

The Backcountry return policy reads like this:

We have an Unlimited Return Policy: we guarantee complete satisfaction and an unlimited lifetime warranty. If at any time — now, next month, in 30 years — you’re not 100% satisfied, send your gear back for a full refund. No questions asked.

Here’s how Backcountry.com’s return policy works:

YouTube Preview Image 

The REI policy reads like this:

Every item you purchase at REI is 100% satisfaction guaranteed.

The link then goes to this:

We stand behind everything we sell. If at any time your REI purchase doesn’t meet your expectations, you can return it for a replacement or refund. What’s more, if you’re an REI member, you don’t even need a receipt—we’ll have a record of your purchase.

If you have ever bought anything from these places and you’re not using it any more or it’s damaged you can simply get your money back, it’s their policy!

Now put your consumer cap on for a minute and ask yourself honestly, if you were buying ANY snowboard gear and you’re going to pay the same price for it regardless of where you buy it, does it matter if one place offers a no questions asked return policy ?

Does that sway your decision to buy there or not?

Take it a step further, would you rather have a 20% discount or have the ability to return it or exchange it at any time over the next 30 years for any reason no questions asked?

It makes the price paid less important.

A recent unscientific poll of 110 on-hill snow enthusiasts found only three that would take the discount over the no questions asked policy.

An astounding 72% bought their gear from a retailer that has a ”no questions asked return policy.” When asked ”why,” the number one response from over 68% of respondents was they bought their gear from a retailer that had a no questions asked policy solely because of the return policy. The other 4% said it was because it was the cheapest price.

12% of respondents bought their gear from EBAY or another. online retailer.

12% bought used or from a recycled sports store.

4% said they supported a local specialty shop or bought from a pro rider.

One respondent claimed he was riding his fourth free board.

This is a huge red flag for the industry and shows the power of the ”we’ll take anything back for any reason now or over the next 30 years.”

While the vast majority of people don’t abuse this policy, it is becoming more widely known every time a snowboarder gets a free board and sprays about it at the next party.

Each time this happens, more riders are exposed to the freebie program and that’s a few more riders that wont be supporting specialty retailers or any other retailer that does not have a comparable return policy.

This tactic is used as a way to entice customers to buy from them.

It’s not about the up front sale and price as much as it is the back side of never having a repair bill or ever having to buy a new board again.

The number of people that are being trained to think it’s OK to do this, because it’s retailers’ policy, is growing every season.

It is the single biggest threat to all snowboard and ski retailers whether they are brick and mortar or online retailers, big box, or mom-and-pop shop.

Now a lot of people might not feel comfortable riding a board all season, raking it over the rocks, and blowing out the edge before sending it back for a new one because it doesn’t feel right—kinda like stealing. But that’s what the retailers that have such policies rely on, that it won’t get used that much and not everyone will take advantage of the policy.

These retailers don’t  support the magazines with ads, or put on local contests, or support athletes—they take that money and write off tens of thousands of dollars in gear every year in returns as a way to buy consumer loyalty—and it works quite well .

Most, if not all, territory reps don’t get a commission from these retailers because they are big enough to be “in house accounts” for the brands selling to them.

These retailers’ policies further hurt the reps because their policies siphon off sales from the accounts they do get commission on.

They hurt anyone that does repair work on boards or skis because why would you repair it when you can just return it?

In conversations about this topic, some manufacturers have suggested creating a program for specialty retailers to have the ability to offer the same policy to their customers, which in the short term might seam like a major victory for specialty retailers, because the consumer that takes advantage of this liberal policy looks at their short-term gain .

But imagine the long term effects of this type of policy on the health of the snowboard and skiing industries.

If the industry standard that most of the retailers recognize, that snowboards and skis are not warranted against rock damage, changes to free board replacement for rock-damaged boards, it would be a huge victory for consumers in the short term, but look at the adverse effects taking this route would cause for the industry.

Manufacturers would be supplying boards for life after the first purchase. Manufacturers would be building five boards, but only getting paid for one. You will see small and mid-sized manufacturers go out of business and bigger manufacturers will have less money to support teams, sponsor events, or spend money on promotions or research and development, and will most likely resort to making disposable boards with lower-end materials and constructions—innovation will die.

Try to forget about your personal gain for a minute and  think about the overall health of the industry as retail is consolidated—you have less choice and higher prices eventually.

No manufacturer can tell any retailer what return polices to have or to change their policy, but they do have the power to not sell their products to retailers that encourage return abuse.

In another unscientific poll, retailers that sell the same products that are sold at retailers that have a ”no questions asked return policy” have seen steady declines in sell thru and profitability for those brands since the day those brands were opened to these stores.

The other unseen loss in this socialist-minded policy is every time another local specialty shop goes out of business, the industry looses a brain trust  and knowledge base of retailers that have a true passion for the sport that non-specialty retailers lack.

This affects everything form retention rates of new snowboarders that don’t stick with it because they have a bad day on the hill because their rental set up was messed up, to the loss of a local shop that puts on movie premieres, local contests, or sponsors local kids as a stepping stone to regional or even national sponsorships. It reduces the accessibility to snowboarding because there is less of a scene at the urban level.

Ever notice how when WalMart opens a new store in a small town, that within three years most mom-and-pop shops or smaller specialty stores that have competing businesses go out of business?

This “WalMart effect” is happening in the snowboard industry, because just like WalMart, there was a time when manufacturers shunned selling their products to these types of stores for a variety of reasons.

But over time they were aggressive enough to get more and more brands and then other competing brands use that to justify opening them and follow suit.

Pretty soon WalMart has all the brands and wields great power over the manufacturers due to their sales volume dictating everything from prices, to discounts and terms, to creation of specialty OEM products, and distribution decisions—they become big enough to the manufacturers to become “in house accounts.” Eventually the tables turn and the manufacturer is beholden to the retailer to the point that they can’t flex their muscle set opposing policy or pull out of the problem retailer without serious financial ramifications.

If you are a manufacturer, ask yourself if you are beholden to your biggest customers. Do you have all your best eggs in a couple of baskets?

Could you survive without them?

These retailers collectively have been responsible for many of the problems the industry faces. In the case of REI, they are not held to MAP pricing because their “members” get a 10% discount in the form of a rebate. They are always the first to go off price when allowed, they don’t have a problem selling below dealer cost, and industry rumor has it  that REI was the main pressure on Burton to go off price before Christmas. We all know the carnage that caused.

So does the snowboard industry really need a no questions asked return policy?

What do these retailers bring to the industry ?

Are manufacturers beholden to these retailers because of their sales volume?

Should manufacturers be selling to retailers that have a no questions asked return policy and or encourage return abuse?

Just like over production of product is responsible for nearly all of the unhealthy aspects of the snowboard industry, the “no questions asked return policy” is responsible for the consolidation of the snowboard retail landscape.

Specialty retailers don’t need special programs, promotions, or policies to “help them out “—what they need is a fair and level playing field.

If you have bought anything from REI or backcountry.com in the last 30 years that you’re not using anymore, I encourage you to take it back. “No questions asked.”

 Dennis Nazari is the owner of Salt Lake City, Utah’s Salty Peaks Snowboard and Skate Shop.

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Note: The opinions expressed in this article are those of the author, and do not necessarily reflect those of TransWorld Media or TransWorld Business.