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L.L. Bean's Still Happy Returns

2/23/2018

23 Comments

 
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by David Hagenbuch, founder of Mindful Marketing & author of Honorable Influence

There were three certain things in life: death, taxes, and L.L. Bean’s return policy.  We’re now back to two.  The iconic outdoor retailer’s decision to rescind its legendary product guarantee has ignited a social media firestorm, but who’s really responsible for the return policy retraction?
 
Leon Leonwood Bean founded L.L. Bean in Freeport, ME in 1912 to provide a single product:  a duck boot called the Maine Hunting Shoe.  Over the next 100+ years, the company expanded considerably, both in scale and scope.  Despite the great growth, the firm maintained an unwavering focus on quality, backed by a virtually unequaled product return policy.
 
For more than a century, L.L Bean made a practice of “accepting any return, at any time, in any condition, regardless of the origin of the item.”  However, that very liberal largesse came to an end just a few weeks ago when the company announced it would rein in its return policy.  L.L. Bean now guarantees its products as follows:
 
“We stand behind all our products and are confident that they will perform as designed. If you are not 100% satisfied with one of our products, you may return it within one year of purchase for a refund. After one year, we will consider any items for return that are defective due to materials or craftsmanship.”
 
The company adds that it requires proof of purchase for any refund or exchange, but if customers provide their information at checkout, L.L. Bean will usually have record of the purchase.  If not, a physical receipt is needed.  In the case of gifts or other returns without receipts, the firm will offer merchandise credit in the amount of the last known selling price, provided that the product is “unused and unworn with the original packaging.”
 
So, why the change of heart after so many years?  According to Forbes, abuse of L.L. Bean’s very generous return policy has been happening for decades; however, the exploitation reached a tipping point in recent years thanks to some particularly obnoxious behavior.

Some people, for instance, found that they could pick-up well-used L.L. Bean items at yard sales and second-hand stores and return them to the retailer for a full-price refund.  With the expansion of ecommerce, such unscrupulous behavior has only increased as returns now can be made from anywhere without having to “look a company representative in the eye” when making an appeal. 
 
It’s likely that L.L. Bean’s decision also has something to do with the pressure that so many retailers are now under, especially from Amazon, which has led to many Chapter 11 bankruptcy filings and the promise of even more store closings.  Regardless of the specific reasons, L.L. Bean finally decided enough was enough.
 
Not surprising, many consumers have had a hard time swallowing L.L. Bean’s policy change and no problem voicing their displeasure.  For example, one disgruntled customer complained, “Your return policy was the only reason I shopped at #LLBean! I shared your amazing service with friends, colleagues, and more. Now, I'll be sure to suggest they avoid like the plague!”
 
Others are even more adamant in their claim of personal harm, so much so that they’ve decided to pursue legal action.  Victor Bondi recently filed a complaint in Chicago federal court seeking class-action status for a lawsuit against L.L. Bean.  The suit alleges that the company is now depriving customers of benefits they had been promised by virtue of the long-standing and heavily-promoted warranty, which had ‘no conditions’ and ‘no end date.’
 
L.L. Bean likely anticipated that revising its return policy would not be popular, but did it anticipate this kind of backlash?  Perhaps it should have, and maybe it could have taken a different tact and/or timeline in communicating and implementing the change.  However, was the change itself wrong?  As with every Mindful Marketing analysis, there are two filters for answering that question: economics and ethics.
 
According to Bloomberg, L.L. Bean has seen its rate of “abusive” returns double in the past five so that they now account for a full 15% of all returns.  Over that timeframe, those abusive returns cost the company about $250 million.
 
Against annual revenue of around $1.6 billion, $250 million may not seem like much, but successful companies don’t concede hundreds of millions of dollars unnecessarily, especially when their sales have been “flat for a second straight year” and the retail landscape is increasingly competitive.  Furthermore, L.L. Bean had to do something to stem the rapid increase of illegitimate returns, lest even more dishonest consumers try to defraud the company. 
 
But doesn’t the new policy penalize honest customers who bought products with a certain understanding, only to have those terms of purchase changed without their consent or compensation?  That’s a fair concern; however, two key factors diminish the argument:
 
First, L.L. Bean’s original guarantee was not a promise of lifetime replenishment.  In other words, there was no reasonable way to interpret that the policy meant customers could buy a product, use it for years and years, then ask for a new one.
 
Every product wears out eventually.  No clothing retailer is responsible for keeping its customers outfitted in pants, hiking shoes, or whatever, just because they once bought a pair from them.  If people are looking for an “All you can . . .” option, they should go to a buffet.  Interestingly, even such restaurants have restrictions, e.g., you can’t stay in the building indefinitely, and you can’t take food with you when you leave.
 
Secondly, even with the change, L.L. Bean’s policy is still far better than industry standards.  Most retailers allow a couple of weeks or maybe a month to make a return.  A few graciously give three months.  I can’t think of another retailer that allows a full refund for a full year for no more reason than “I’m not completely satisfied.”
 
Furthermore, even after a year, L.L. Bean will still allow returns of products that “are defective due to materials or craftsmanship.”  So, the company continues to have its customers’ back.  Of course, this caveat means that consumers also must show good faith and make a compelling case for the return, not just “I wore it out over 15 years, now I want a new one.”
 
To use an analogy, many consumers have acted like horrible house guests who have taken advantage of their host’s generosity.  L.L. Bean gave some special privileges to those guests, but in return they ransacked the refrigerator, beat up the furniture, and long overstayed their welcome.  That bad behavior has forced L.L. Bean to enact some more restrictive but still very reasonable boundaries.
 
Individuals often react negatively to change, especially when it doesn’t seem to be in their favor.  Rationale people, however, can understand why L.L. Bean’s policy change was warranted and how it’s still far better than industry standards.  As a result, there should be very little loss in long-term business for the retailer.
 
In this instance, those guilty of single-mindedness are consumers.  L.L. Bean’s new approach to returns checks out as “Mindful Marketing.” 


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23 Comments
David
2/25/2018 08:29:53 pm

I live 15 minutes from Freeport Maine, the home of LL bean. I appreciate your thoughtful analysis of the companies actions. I'll be interested in how stakeholder value will change overtime and what the loyal non-abusive customer will think of these changes. I hope to see healthy growth from this company as it impacts both the local economy and the spirits/emotional well-being of those in the area.

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David Hagenbuch link
2/25/2018 10:42:21 pm

Thank you for your kind feedback, David. Like other retailers, L.L. Bean has a tough road ahead, but it has great brand equity in its favor. I'm with you in hoping that it continues to thrive.

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Jenna
2/27/2018 01:47:56 pm

Hello Dr. Hagenbuch,
Thank you for your blog post. I appreciated how you stuck up for L.L. Bean's new policy. The public who is outraged at this change of policy seems to be just selfishly upset that they cannot take advantage of L.L. Bean's lifetime policy anymore. I agree with you when you say that their new policy is still generous.

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Jamie
3/2/2018 10:16:27 pm

I absolutely understand why L.L.Bean had to make this decision, although it is unfortunate. First of all, it is unfortunate so many people have been taking advantage of L.L.Bean's generous policy. However, with so many people happily taking advantage of any way to beat the system, it is not surprising. At the same time, I am not surprised by the backlash. While a class action lawsuit seems extreme to say the least, scaling back a lifetime guarantee to one year is difficult to frame in a positive light for the public. In many ways it seems like the loyalty of L.L.Bean to their customers has diminished, and in turn, the customers have less loyalty to L.L.Bean. It is difficult to have the same loyalty you once had to a company when you can no longer praise their lifetime warranty the way you once did. While I completely respect L.L.Bean's decision and understood why they made it, it is unfortunate both for the company's public image, and for me as an honest consumer. And while their new policy is still extremely generous, it will be difficult to get that across to the outraged public.

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Logan Buffington
3/6/2018 07:30:36 pm

I believe that L.L.Bean is justified in editing their return policy. In a market where people will find any way to "beat the system" it is too easy for con artists to take advantage of their former open-ended return policy. Beyond this, L.L.Bean is not changing their products. Customers will still enjoy the same quality product they have received since L.L.Bean was founded, but with a more stringent return policy. Additionally, L.L.Bean still plans to honor returns for products that they believe were flawed by craftsmanship, they are not trying to gouge customers by selling them faulty, unwarranted merchandise. Lastly, I agree that the one year return policy is extremely generous! Within a year, customers should be more than able to determine their satisfaction, or lack there of, with L.L.Bean's products. If a customer doesn't get enough use out of their hiking boots or book bag in one year to deem them unsatisfactory, then they are buying products they do not use or need. I support L.L.Bean's decision and believe that the change in their policy still benefits and backs customers in ways most other corporations do not.

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Jordan
3/6/2018 10:07:24 pm

I believe LL Bean is completely justified in their redaction of their policy. First and foremost, the policy of lifetime returns is a privilege afforded to their customers, not a right. Very few companies offer such a guarantee and it is definitely not expected of all companies. LL Bean has been a company of integrity and their old policy assumes the consumer's integrity as well. As consumers have now lost the trust of the company, there's no reason for the company to hold such a benevolent policy. Even still, LL Bean's new policy is still very generous providing an entire year's worth of use and accepting returns that far out from purchase. No one actually takes that much time to determine the value of their purchase. Additionally, LL Bean's life time return policy for items suffering from manufacturing defects is very noble. To be honest I don't see how anyone can really argue against LL Bean's decision. They are justified in doing what they will with their products and policies and even after the change, their policies are very much in favor of the consumer.

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Courtney
3/7/2018 09:59:08 pm

I really appreciated this article, especially as a slightly disappointed consumer who took great comfort in the previous return policy. The one question/ thought I had when reading the article is that will the money L.L. Bean could lose because of angry customers be less than the $250 million they were losing in abusive returns? I would assume that over time this would even out and that if customers truly valued the return policy then they should, by now, truly value the product and thus, most won't let a decision like this keep them away. As I know little about how decisions like this affect a business's profit I am interested in knowing how big of a financial difference this change could make to the company.

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Emily
3/7/2018 11:38:28 pm

First of all, I feel like my life has been changed for the better now that I know that L. L. Bean stands for Leon Leonwood Bean. This is truly amazing information. If someone named Leon Leonwood Bean can be successful in life, anything is possible. Anyways, I can understand why L. L. Bean made the change to the return policy. I was surprised and a little hurt when I heard about the change because I used their backpacks for years and would receive a new one halfway through the year when a strap would break off from carrying so many books. I can see why they needed to adjust the policy since so many people were abusing it, but I’m worried for the company because its supreme return policy provided a value proposition for many customers. I do think things would have turned out better if there was more of a warning about the change. With an announcement or timeframe before implementation perhaps fewer people would have felt misled.

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Sarah
3/8/2018 08:31:14 am

L. L. Bean has been a part of my family's purchasing history; we know it well for its quality and durability in products. We know there are certain products we choose to invest in because we know they will not break or deteriorate (at least significantly less than most other companies' products). I can see how people take advantage of L. L. Bean's policy, and I am highly disappointed in people for such blatant wrongdoing. L. L. Bean is one of the few companies I genuinely have trust and faith in their workmanship and do not feel coerced or unsatisfied with my exchange of money for product. I feel that L. L. Bean has a right to change their policy under the circumstances, and I appreciate this article for elaborating on the circumstances giving a robust view of the situation. I am saddened by this turn of events, but I am hopeful L. L. Bean will keep a loyal customer base and that these measures will aid the company in reducing dishonesty.

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Josh
3/8/2018 10:31:05 am

This is a very smart decision by L.L. Bean. They are still able to continue the wonderful customer support and appreciation. It became obvious to the company that dishonest customers were taking advantage of their very generous return policy, and they could no longer accept the millions of dollars they were losing because of this dishonesty. By changing their policy, they will retain the loyal and honest customers while decreasing the amount of customers that are taking advantage of the policy. Doing this will certainly not completely take care of the problem, but they were certainly save a lot of the money that had been losing in the past. L. L. Bean is showing wonderful customer service in a world where the customer is becoming less important.

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Hannah Mosley
3/10/2018 02:57:17 pm

I fully support L.L. Bean's decision to change the return policy. I was unaware that they had a return policy that would take anything! While that seems like a good idea, unfortunately, people will take advantage of it. It is good that L.L. Bean placed such emphasis on customer satisfaction. However, now that the company is so large, their return policy was costing them far too much money. I hope that this change does not significantly harm L.L Bean!

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Cameron Peck
3/10/2018 08:52:32 pm

consumer at all. The anger from their customer base is the fear that comes from the chance that 3 years down the line they might need to return their product. This reminds me of how people buy extended warranties. They are afraid that they might need them in the future so they hedge their bet, however 90% of the time the warranty is never needed and it is money lost. This is a similar case, they felt like they had an unlimited warranty and the fear of losing it is terrifying. However for 99% of their customer base this will not negatively affect them at all, the reason is they are not going to try and return their product 10 years down the road and if there is a problem they can get it exchanged. This policy has been manipulated far too long and is hurting LL Bean too much in their bottom line. The uproar is unwarranted and like you said will not affect them long term.

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Andrew Strom
3/11/2018 06:01:12 pm

I think this a good change for L.L. Bean and agree that this is mindful marketing. I think it's interesting that they were able to keep this return policy in place for over a century but technological changes and competition from e-commerce forced this change. I agree that the people who are outraged with this change are acting unreasonably. This new return policy is very generous and still shows that L.L. Bean is committed to the quality of their products. Customers should appreciate the values that L.L. bean is upholding because there are few companies with this level of customer service.

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Sabrina Winslow
3/12/2018 04:05:18 pm

I think that this was a smart play by L.L. Bean. It reminds me of similar story by Lulu Lemon athletic apparel. They had a return policy that allowed customers to bring back in their products if it had a tear, stain, or any damage to it and the store would give them a new product free. This only lasted for so long because just like L.L Bean, customer took this refund for granted and abuse it. I also agree that rational people will understand the change in policy. Even though more arrogant people are upset, those arn't the type of customers L.L. Bean should want anyway.

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Abbie
3/12/2018 09:49:08 pm

I believe that L.L. Bean is totally justified in their decision to change their return policy. Like mentioned in the article, I am sure that L.L. Bean customers have been abusing this outstanding return policy by asking for a new pair of boots after a couple years of normal wear and tear. I also believe that L.L. Bean still has an above average return policy that customers should still be thankful for. My dad had a pair of L.L. Bean boots for 10 months when the loop on the back of the boot broke off. They were incredibly understanding and offered a full replacement, even though the strap was the only thing that was not functioning. Either way, the customer service at L.L. Bean is enough the make me want to continue to shop there.

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Mark
3/12/2018 11:10:57 pm

L.L. Bean's change in their return policy is still wildly generous compared to other clothing stores in the industry. Having lost $250 million just in returns is enough reason to make a change in their policy. The backlash is a few harsh words from abusive customers but in retrospect, the amount they will save from this shift will be worth the backlash. L.L. Bean is still showing their care for the customer's return policy by implementing the one year allotted time stamp for returns.

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Zichen Wang
3/12/2018 11:18:31 pm

I respect L.L. Bean for honoring its return policy over the last 100+ years, the policy alone sure gained lots of customers for the company, and the message behind it was very inspiring, but tolerated obnoxious behavior. For me, personally, even though that I am not a customer of L.L Bean, I would consider purchase its products simply because of the trust that this company has for its customers, regardless of the policy change. And I think it is a great move for L.L Bean in the long run to be more successful as a company, even though they have to suffer through the firestorm that is happening on social media.

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Ryan Petersen
3/12/2018 11:34:17 pm

I stand by L.L. Bean's decision to restrict return policies for the sake of protecting their bottom line. As an employee at Costco, all too often I see people returning items from years ago with no valid explanation for the return. We get customers returning costco shirts they bought at garage sales and receiving full price refunds when they return them to costco. In both case, the actions of a few people will affect the larger majority of decent customers so the customers who are reasonable will be hurt in the long run. But, L.L. Bean's decision is necessary to prevent them from going out of business. One suggestion I would make to L.L. Bean is to track how often customers make returns and for what reasons. If, in the future, a customer makes a return outside the 1 year period and has no record of making returns, then an exception should be made for that customer for good P.R. Costco does the same thing and flags customers who make returns too often, requiring an explanation after making multiple returns. Customers shop at stores because of the employees, merchandise, and atmosphere so the customers who are complaining are most likely the ones who are making these ridiculous returns. L.L. Bean should not worry about losing customers as a majority of their customers will continue to shop at their locations.

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Kameron Hobbs
3/12/2018 11:45:56 pm

I respect L.L.Bean for the decision they made regarding the indefinite period of returns. There are always that select few who choose to take advantage of acts of kindness and ruin the benefits for the honest users. Besides all the backlash they received for making this decision, I believe that it was ultimately the right choice to make. The timeline for which they now offer returns is still very lenient and shows plenty of grace to those who have purchased different kinds of clothing there. Re-establishing this policy will have many angered, but in time I do believe the customer loyalty L.L. Bean once head will return.

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Liam Thompson
3/13/2018 12:17:38 am

I think that L.L. Bean made the correct decision changing their return policy. It makes sense that with the stiff competition coming from amazon and other online retailers, it is not smart to have unnecessary losses coming from fraudulent returns. L.L. Bean’s new return policy still allows for customers to return clothes that have true manufacturing defects. Though L.L. Bean’s unlimited return policy was great while it lasted, unfortunately society has taken advantage of the program, and as a result, an amazing lifetime guarantee on their products has come to an end. Even though some customers are upset, I still think it is an example of mindful marketing because L.L. Bean is still giving their customers a fair opportunity to return their products.

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Parker Buck
3/13/2018 12:21:50 am

While I can understand loyal customers being upset with L.L. Bean for changing their policy they've had forever. Similar to Nordstrom's return policy, it has many positive influences on their customer service ratings. Although, I believe it is definitely a smart move as a business for them to make the change to their policy. While you mentioned some of the customers being disgruntled with the decision, I am curious to see where this leaves L.L. Bean in the long run, because I don't think it will have much of an impact, if any, on their sales.

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Aaron Fukumura
10/28/2020 06:42:07 pm

While I may be writing this comment a few years after the publication of this blog, I write it a little over 6 months in to the COVID-19 pandemic, and the subject of return policies is surely beginning to swirl in people's minds as the holidays and Black Friday approach. With the uncertainty of when things will fully open back up or if things will be shut back down due to an outbreak, it is uncertain if companies will begin to change their return policies, as it is unknown how big a profit companies can turn with their huge end of the year sales, as many families have lost significant portions of their income and may be hesitant to go out and make purchases on luxury items. While I don't believe the larger businesses out there will change their return policies, as they appear to be doing alright thanks to them having a strong online shopping infrastructure, smaller business smaller business may end up changing their return policies as they are the ones that have been hit the hardest financially and may not have the supplies or finances to handle an influx of returns due to holiday shopping.

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Elizabeth Perry
9/14/2022 04:14:09 pm

L.L. Bean prioritized their company first in their 2018 decision by placing parameters around their return policy. The company received abuse of its return policy of “accepting any return, at any time” which amounted to a $250 million dollar loss. Some customers saw this return policy as a way to acquire new products at their disposal. As a customer of L.L. Bean, I respect their decision to uphold the quality of their products by limiting the ease of obtaining new products. This decision put the company’s products first. This decision shows they don’t rely on a gracious return policy to build customer loyalty and satisfaction. Individuals who choose to shame the company for their decision do so out of selfish intent. Customers instead should respect L.L. Bean more because of their choice to not cater to the masses. L.L. Bean scaled back its return policy reinforcing how they want their products treated.

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