L.L. Bean has changed its 106-year old return policy. Returns will now be limited to a one-year time period.
If that sounds generous, keep in mind that for over a hundred years, the company has offered an ‘unlimited’ customer return policy.
Over the last five years, the viral nature of social media has accelerated losses on returns to $250 million. These products are what the company calls “destroy quality”, items so used or damaged they’re sent to landfills.
This post is based on the CBS News article, L.L. Bean changes its unusually generous product return policy, by The Associated Press, February 9, 2018.
1. How might the merchandise return policy change impact L.L Bean’s order winner(s)?
Guidance: Students should review the concept of order qualifiers/order winners. Ask students to identify the order winner(s) that L.L. Bean had under the old customer return policy. Students should then compare the new customer return policy to competing firms in the retail industry. Does the new return policy change L.L. Bean’s order winner(s)?
2. With over $250 million of returns at L.L. Bean over the last five years, identify the supply chain issues created by the old customer return policy.
Guidance: Students should review reverse logistics. Ask students to create a chart to display supply chain issues that reverse logistics potentially impacts for L.L. Bean. (A web search about the company may help the students understand this business model.)