13 Oct 2016

Amazon Should Allow Returns

Amazon India has, for a long time, allowed returns if you're not satisfied with the product, as is common in some other countries. Much better than most Indian shops that are greedy, narrow-minded and never want to give you your money back [1].

No longer.

The reason seems to be too many returns of phones. It's not surprising, given the typical Indian mentality of being quick to take advantage of and misuse any facility given to them. But Amazon's solution of not allowing returns is not the best solution.

A better solution is a restocking fee of, say, 15%. It instantly stops people from buying things with the intention of trying it out for fun and then returning them.

A second solution is to allow refunds only for customers in good standing. Someone who's placed a many orders, and spent a high enough money of money on Amazon, should be allowed occasional refunds. Don't treat everyone with distrust because some deserve to be.

A third solution is to partner with companies to offer some products for a free trial. If Micromax wants to promote their new phone, let them offer a free trial, at their own expense, not Amazon's. When you go to the product page, in addition to the Buy button, there would be a Try Free button. When you click that, you still pay the full price of the product [2]. You use it for, say, a fortnight and, at the end of it, you either keep it, or return it and get all your money back. Or exchange it for a different model, like a different color or storage capacity [3].

When you go for a free trial, you may get a used item, rather than a sealed one. That way, each product can serve several customers. If each trial lasts a fortnight, one piece can serve 24 customers over a year. At the end of your trial, if you like the product but want a new piece, you can always exchange it [3].

A company can also impose conditions for a free trial, like already having a high-end phone, to target people who already buy high-end products. Again, as a way to filter out people who are unlikely to buy a costly phone. Samsung (US) did a similar promotion, offering the Galaxy S7 to iPhone users to try out for a month for $1.

Amazon can also offer phone rentals, as a way to target users who may be hesitant to spend a lot of money on a phone. That's all of us — all of us suffer from sticker shock. Instead of paying say 70K for an iPhone, it's better to rent it out for a couple of thousand a month. That way, if one doesn't like it, one can always return it. It's much easier to make a decision to spend a few thousand than to commit to spending 70K. Rentals can also increase sales dramatically, by taking away the risk from the purchase [4].

These four solutions are all better than completely forbidding returns: restocking fee, refunds for customers in good standing, free trials, and rentals. Amazon should adopt one or more of them instead of sticking with their current customer-hostile stance.

[1] Flipkart allowed returns as well, but only if the product is bad in some way. Flipkart didn't let you say, "I didn't like it" and return it. Amazon did.

[2] This ensures that people who can't afford it don't try it. And that customers don't disappear, stealing the item.

[3] An exchange is logically the same as returning the trial item and using the money to make a fresh purchase.

[4] Rentals have other advantages as well: if a person realises that a phone is not good in daily use despite appearing so in the showroom, she can return the phone after a month. Companies can't fool users by including flashy features that look appealing in the showroom. Or by misleading advertising.

Companies also won't be able to neglect users after the sale is made, say by not offering security or feature updates. If they try that, users may return their phones and pick up a newer one, hurting the company that neglected to update the phone. As opposed to the status quo, where you can do little if your OEM decides not to update your phone.

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