The generous return policy of L.L. Bean will soon be less forgiving. The Maine-based company, which has touted 100% satisfaction guaranteed for over a century, will impose a limit of one-year for most returns to lower the increased fraud and abuse.
The retailer said that returned items rendered useless or destroyed, including some that had been purchased at thrift stores or taken out of the trash, have double over the last five years, surpassing the amount of revenue each year that its famous boot generates.
CEO of Bean Steve Smith said the numbers are very high and it is not sustainable for a business to continue that, added Smith.
L.L. Bean made an announcement on Friday that it would now accept returns for any reason for only one year and proof of purchase is required. It is going to continue to replace any products for manufacturing defects beyond one year.
In addition, the company has imposed a $50 minimum purchase to receive free shipping, as part of its plan of lowering costs that has included a reduction in workers through giving incentives for early retirement and changes in the pension plans of workers.
The company, based in Freeport, Maine, joins a host of other retailers tightening return policies. Many retailers have been changing unlimited returns to one year maximums while others have cut the one-year limit to six months or less.
L.L. Bean’s change of policy came in the form of a letter to its customers and a memo to employees. This is a huge policy shift for the company that was founded 106 years ago and has used the satisfaction guarantee to differentiate from its competitors.
The founder of the company Leon Leonwood Bean has been credited with the launch of the policy when he had 90 of the first 100 of his hunting boots returned. He earned much goodwill through returning the clients’ money, and he returned with a boot that was much better. At that point, the satisfaction guarantee had its birth.
The company, which remains family-owned, is prepared for any backlash, but said the changes honor the founder’s original spirit of guarantee, said his great-great grandson Shawn Gorman who is the chairman of the company.
Over the last five years, Bean has lost more than $250 million on just returned items that it classifies as destroy quality, explained a spokesperson for the company.
Destroy quality end up in the landfill. First quality returns go back to the shelves of the store and “seconds” end up at outlets to be sold or are donated to charity.