May 30, 2007

Research Says Vague Return Policies Cause Stress for Retail Salespeople

Research by Dr. Chad Autry

 What's the best way for retailers to cause employee stress, frustration and job turnover? Having a vague product-returns policy, or no returns policy at all, says an expert and co-author of the first study to examine the emotions and behavior of salespeople regarding the returns process.

"Attitude Toward the Customer: A Study of Product Returns Episodes," by Chad Autry, assistant professor of Supply Chain Management for the Neeley School of Business at Texas Christian University, along with Donna Hill and Matthew O'Brien of Bradley University in Peoria, Ill., reveals numerous insights about what goes on inside the minds of salespeople faced with customers demanding refunds.

 "During product returns, the retail associate can be caught between two incompatible goals: maintaining that the customer is always right and doing what's best for the company," Autry said.

Most retail associates are woefully unprepared to handle this internal conflict. The result can be stress, turmoil, confusion, frustration, irritation, a growing dislike for the job and eventually seeking other employment. The result for the store is unhappy workers and high employee turnover.

The study looked at how the behavior of customers in a returns situation affects the attitude and subsequent behavior of salespeople. While customers' reactions to marketing efforts have been extensively examined in earlier research, this may be the first study to investigate the customer-relations process from the perspective of retail associates, said Autry.

According to the research, the emotions and conduct of retail associates are of paramount importance during returns, and largely determine the level of customer satisfaction, or dissatisfaction, both with the immediate transaction and the store overall. A salesperson's attitude can mean the difference between gaining a loyal customer or losing a customer forever.

The major factor influencing the attitude of a salesperson, however, is the customer's behavior.

The study surveyed 238 retail salespeople from a range of stores and retail formats dealing in durable goods. Written scenarios outlined possible customer behaviors and demands to test salespersons' reactions to three aspects of the perceived legitimacy of the return request - whether the customer behaved in a socially acceptable manner, whether the return request made logical sense, and whether the return would be within store rules.

For each customer behavior, participants indicated how they would feel and if they would be likely to accept the return.

The researchers found that only one of the three "legitimacy aspects" really mattered: whether or not the customer's behavior fell within social norms. Interestingly, the sales associates experienced little stress in bending store rules or overlooking nonsensical complaints as long as the customer seemed to be honest and straightforward.

"The most prominent source of stress was when the request was essentially within the rules but was intended to cheat the process. Employees were the most offended and frustrated when customers tried to capitalize on grey areas in the returns policy," said Autry. "They felt personally taken advantage of. It's a sticky situation that strongly impacts their attitude toward the customer."

Examples of ethically illegitimate requests include returning a fancy dress that was worn to an event, or returning a recently purchased big-screen TV right after the Super Bowl.

So what can retailers do? Two things: implement better training and better policies. Product returns can represent as much as 40 percent of a retailer's transactions, so the returns process is a large part of the job for many salespeople, yet it's often treated by store management as an inconvenience and an afterthought.

In-depth employee training in product returns is a vital strategy, emphasizing an awareness of the influence of social norms on the transaction, the need to ensure that all returns are within store rules, and that returns and their inherent frustrations are integral to the job. One goal is to teach salespeople that requests must sometimes be firmly denied but with a positive attitude.

Additionally, returns policies should be written to be as crystal clear and unequivocal as possible.

"Many stores lack good, formal returns policies, so that the process is driven by the personal opinions of the sales associates. This sends mixed messages to customers. Eliminating the grey areas in returns policies alleviates a lot of questions both for the salespeople and the customers," Autry said. "Retailers need to plainly indicate where the line is. Some customers will still try to step over it, but at least they know there is a line."

Even more important, because employees likewise will know where the line is and possess solid training in handling customer requests, they will more confidently and consistently represent the store's interests.

The paper, presented in January at a meeting of the American Marketing Association, is scheduled to appear later this year in the Journal of Managerial Issues.


Elaine Cole
Public Relations Manager
Neeley School of Business at TCU