What exactly is a Restocking Fee?

[JBRES1]

I, as a business owner charge a restocking fee on any returned item .
I do not charge a restocking fee if another item is purchased to replace the item.
I paid for my inventory, put it in stock, and plan on making a profit upon its sale.
I do not run a lending store for people to check items out then return.
If you buy something from my company , I stand behind the sale. If I make a mistake, I pay for it. If you make a mistake should I pay for that also ?

The best thing you can do is to make sure you want the items before you buy them.
If you don't like the company policy of a restocking charge, vote with your Dollars, and buy someplace else.

Jim Breslin

 

[spectrum]

Ok. A store has 10 generators. A storm is forcasted. He's happy because now he's going to sell all 10 at $1000 each. The generators are now sold. That's $10,000 made.

Oh Oh. 5 customers returned theirs. "Looks like I'm only going to make $5000 form this storm." Well I'm going to charge them money for my taking the generator from the service desk to the shelf, and I'll call it a restocking fee. So now I can make $500 from the guys who decided to return their generators.

If the storm was never forcasted and never came, $0 would have been made. Yet because of the forcast he made $5000 when all was said and done. Greed or anger made him want another $500.

That's the way I see it.

You are failing to recognize 2 things.

1. The cost of carrying inventory
2. Seasonal or peak demand that limits the opportunities to sell

 

[spectrum]

True. It's too bad then when an LDS thinks that way, they LOSE money because they lose customers.

In the other thread, it was mentioned that Scubapro doesn't charge restock fees. If you had the shop order a BC size that the shop doesn't stock, and then you return it because it doesn't fit, and the LDS says you have to pay a restocking fee of $65...I would think that one of the 2 are greedy.

While Scubapro may not charge a restocking fee I doubt that they provide free freight. Shipping a BC any distance via UPS for example will be in the $10 0 $15 dollar range. On top of that I'm sure the store needs to call for a return authorization and complete other paperwork. There is no free lunch.

Now if the shop ordered to augment their inventory so you could try it then it is their risk and not your restocking fee. IMO even if they had you pay for it in advance AND they participated in the size selection process then it is their problem.

If you are at home throwing darts at the size chart and ordering stuff a shop can't afford to underwrite those antics.

Pete

 

[ReefHound]

If the storm was never forcasted and never came, $0 would have been made. Yet because of the forcast he made $5000 when all was said and done. Greed or anger made him want another $500.

When a customer buys and item and then returns it in pristine condition, the store is not even. They still lost. They paid employees to process the sale and the refund and can't get that back. They lost the opportunity to sell it while the customer had it. And they likely placed a new order after they ran out. So if they couldn't sell 10 units without a storm what are they going to do with 15? They'll have to discount the price to move excess inventory.

I think it was said best that it is a matter of risk management.

 

[Paco]

Good answers.

 

[ajames54]

Ok. A store has 10 generators. A storm is forcasted. He's happy because now he's going to sell all 10 at $1000 each. The generators are now sold. That's $10,000 made.

Oh Oh. 5 customers returned theirs. "Looks like I'm only going to make $5000 form this storm." Well I'm going to charge them money for my taking the generator from the service desk to the shelf, and I'll call it a restocking fee. So now I can make $500 from the guys who decided to return their generators.

If the storm was never forcasted and never came, $0 would have been made. Yet because of the forcast he made $5000 when all was said and done. Greed or anger made him want another $500.

That's the way I see it.

Many years ago I worked in Photo retail, every Friday in May and June we would make fairly large sales of camera gear.. all of which would be returned in the following week, at the same time as the customer dropped off rolls of wedding photos to be processed.
The same thing happens with furniture near the holiday season (got to impress the guests) and upscale clothing at anytime..


There are enough pathetic people out there that will buy and return simply because they can. A good retailer has a liberal returns policy but they are not in the business to be ripped off. In a lot of cases the restocking fee is simply the stores way to ensure that they will not be abused. Most that I've noticed only charge the restocking fee on large ticket or special order items (and of course those things that someone _could_ rent but may be too cheap to).

As long as the fee is posted and mentioned up front I think it is a fine idea.

 

[jacksatlanta]

I know for me the biggest reason a restocking fee is applied is to cover the credit card transaction fee's. The initial purchase transaction costs are not too bad and factored into my selling prices, but refunds and returns to credit cards eat me alive. The fee for a refund on to a card for a small business is pure piracy, and more often than not the items I have the biggest problem with this is wetsuits, where the customer could try it on in the store but doesn't want to.

 

[friscuba]

Ok. A store has 10 generators. A storm is forcasted. He's happy because now he's going to sell all 10 at $1000 each. The generators are now sold. That's $10,000 made.

Oh Oh. 5 customers returned theirs. "Looks like I'm only going to make $5000 form this storm." Well I'm going to charge them money for my taking the generator from the service desk to the shelf, and I'll call it a restocking fee. So now I can make $500 from the guys who decided to return their generators.

If the storm was never forcasted and never came, $0 would have been made. Yet because of the forcast he made $5000 when all was said and done. Greed or anger made him want another $500.

That's the way I see it.

10 generators at a grand each probably cost the dealer 5 grand. If he can plan on no storms at all, odds are the dealer would rather not carry the generators at all and put his 5K into something with more turns. Dealers often do try to stock enough generators to last a storm season. If 5 customers returned theirs, he's in effect made NO money but does have some used (no longer new so he can't ask the same price) generators sitting around.

Like it or not, there are a lot of people in this world who will use something a few times and return it. I was in a dive shop in my town and someone returned an "unused" BCD, there was salt residue on the inside. The yahoo was just trying to get a free rental with top of the line equipment during their trip. That gear could not rightfully be sold as new, I don't know what the shop owner did on that as I didn't stick around.

 

[all4scuba05]

Ok, so quite a few say the fee is justified. However, do you also say that the more expensive the item was, the more they should charge us? They should charge us by percentage?

 

[ReefHound]

If their losses are related to purchase price as in having to discount it 10% for "open box", then of course. You as the consumer should find out their returns policy beforehand and if you don't like it, don't buy there.