Why LL Bean taught customers a hard lesson: Nothing lasts forever, especially not return policies

Trent Gillies
Why LL Bean taught customers a hard lesson: Nothing lasts forever, especially not return policies




For generations, L.L. Bean has had one of the most generous return policies of any retailer.

This month, the 106 year-old outdoor gear maker decided that enough was enough.

On February 9th, L.L. Bean Executive Chairman Shawn Gorman announced in a letter on Facebook that customers now have one year to return an item, and it must accompany a receipt.

That was a stark departure from what used to be a lifetime satisfaction guarantee for any item, in any condition, even years after purchase.


While originally created to protect buyers from defective products, the growing problem was that people were taking advantage of the liberal return policy.

"People were going to garage sales and eBay, and buying very old and worn merchandise and returning it to stores for full credit," Jay Baer, a marketing expert told CNBC's "On The Money" in a recent interview.

Baer told people were then "taking those items and flipping them on eBay and garage sales and actually making a job out of this." Despite this, Baer — the author of "Hug Your Haters: How to Embrace Complaints and Keep Your Customers", and an advisor to companies on how to use social media for customer service — criticized how L.L. Bean handled the return policy change.

"What they have done is taken a differentiator, a talk-trigger, something that set them apart in the marketplace and just given it away," Baer told CNBC. In effect, the company said "'we're not going to do that anymore. We're now like everybody else.'"

Meanwhile, the company defended its decision by pointing to the bottom line. L.L. Bean said it has lost $250 million over the last five years, as "abusive" returns under the policy had doubled to 15 percent.

"The amount of revenue they were losing on these somewhat bogus returns was exceptionally large, or they decided, perhaps incorrectly, that customers don't care that much about a lifetime warranty," Baer said. "Perhaps they've miscalculated."

And clearly, the move has infuriated L.L. Bean's customer base. "There's a lot of customer comments on their Facebook page and on their Twitter account that say, 'We no longer have a reason to shop at your store versus everybody else who sells essentially the same goods," Baer said.

He mentioned Amazon.com has a 30-day return policy, and pointed to the fact that L.L Bean's new stricter one-year policy, is 11 times greater than that.

"The funny thing about this is, if this was a "start-up company with a one-year return policy, no questions asked, and lifetime for defects, we would be praising them for the generosity of this policy," Baer said.

"What makes this difficult and what bothers people is that they've taken something away," he added.










On the Money airs on CNBC Saturday at 5:30 am ET, or check listings for air times in local markets.