Vol. 1, Issue 33, December 30, 2003
Macy's Holiday Sales Offset by 135% Return Rate
Struggling retail giant Macy's has seen what was a promising rise in receipts during early December evaporate as post-holiday returns have hit unprecedented levels.
"Obviously, we are disappointed at the number of returns and exchanges we've seen, " said vice president Alan Jenkins. "However, customer satisfaction is our number one concern. It's what defines us as a company, and we are willing to do whatever it takes to achieve this goal."
Macy's has weathered many decades of changes in the retail market, but has struggled in recent years with the decline of department stores in general.
"It's a challenge for traditional retailers," said Cornell University economist Branson Tindale. "Customers seeking lower prices go to Wal-Mart; customers seeking quality brands and selection go to specialty clothing or appliance stores. It's been hard for department stores to offer compelling reasons for shoppers to spend more money on what is often a more limited and pricier selection."
Macy's has played heavily on its status as a nostalgic American institution, increasing publicity for its annual Macy's Thanksgiving Parade in New York and marketing antique-style Macy's merchandise. However, it is the company's decision to loosen its returns policy that is causing its current dilemma.
"Waiting in line to return a holiday gift at the store is a perennial frustration for customers," said Jenkins. "We wanted to streamline that process for our valued customers."
Since June 2003, when the new policy was implemented at Macy's stores, customers have been allowed to return any item, in any condition, with or without a receipt, for a full cash refund with no questions asked. In addition, patrons are served free cappuccino and biscotti while waiting in line at the returns desk.
"Returns are already so easy at competitors like Target and Wal-Mart that Macy's really had no choice but to adopt this extreme," said Tindale. "However, the weakness in this plan has been made quite apparent following the Christmas rush."
Customers are apparently returning a wide variety of items which have not been purchased within 90 days, or even within the year. They are also returning items which may not have been purchased at Macy's.
"I admit it seems odd that people would return weathered lawn flamingos, TV Guides from 2002, and burnt Thanksgiving turkeys," said Macy's return desk attendant Rochelle Newman. "But we always try to refund a fair price."
It is unclear how Macy's is going to cope with the exorbitant losses resulting from this post-holiday payout, although some have suggested that the company may be able to recoup some value from the odd assortment of dated and damaged items accepted for returns.
"Hey, there's always Ebay," said Tindale.