Apple Tries to Lift Online Sales by Slicing Refund Times

Before you go, we thought you'd like these...
Before you go close icon
Apple tries to lift online sales by cutting refund times in half
By Christina Farr

SAN FRANCISCO -- Apple (AAPL) has cut in half the time it takes to give refunds to online store customers who want to return their iPhones and other gadgets, a small but crucial step to try to get more people to buy direct from its website.

The move is a big upfront expense on Apple's part, but could pay off in the long run if the company can lure online customers away from retailers such as (AMZN) and Best Buy (BBY), industry experts say.

According to retail-intelligence firm StellaService, customers who buy a product from Apple's online store can get a refund in under a week, versus 10 days previously.

Apple is processing refunds at a faster rate because the company now uses an expedited service, FedEx 2Day, to let customers ship returned items with prepaid labels to its warehouse in three days.

StellaService researchers first noted the improvement in refund processing times in November, but chalked it up to a temporary measure for the busy holiday season. The company, which orders items from Apple's website several times a day for research purposes, also discovered that packages were stamped with FedEx 2Day, rather than a Newgistics prepaid label.

%VIRTUAL-article-sponsoredlinks%A source with knowledge of the new procedure confirmed that customers will incur no additional cost.

"This is the first time we're seeing an investment like this on the returns side," Kevon Hills, StellaService's vice president of research, told Reuters.

StellaService does business with Amazon-owned Zappos, but declined to disclose whether its customer base included Apple, Amazon or eBay (EBAY).

Amazon remains the frontrunner in online retail, but the race is heating up. Trade publication Internet Retailer estimated that Apple recently took the No. 2 spot from Staples (SPLS) in worldwide sales. These rankings don't include sales by third parties.

Apple experienced a 24 percent increase in online sales to $18.3 billion in 2013, Internet Retailer estimated.

E-commerce experts say Apple prides itself on its customer service and believes in controlling every aspect of its business.

"Speed is becoming a significant competitive weapon" in the e-commerce wars, said Marc Wulfraat, president of MWPVL International, a logistics and supply chain consulting firm. But most e-commerce firms don't invest in making the returns process more efficient, as it doesn't serve the bottom line.

"Returns are viewed as a hidden cost, so many e-commerce companies make the process very difficult," he added. "Returns are the first place to cut corners."

Apple rival Amazon offers instant refunds in some cases. However, this puts the company at risk for fraud, as some customers may not actually return the item. By cutting down on the days an item is in transit, Apple can offer a speedier refund and avoid fraud.

Amazon spokeswoman Julie Law said the company doesn't comment on its competitors.

Apple spokeswoman Amy Bessette said the company had no comment at this time.

FedEx (FDX) declined to speak publicly on customer agreements.

17 Tricks Stores Use to Make You Spend More Money
See Gallery
Apple Tries to Lift Online Sales by Slicing Refund Times

A big, bold "SALE" sign helps get people in the store, where they are likely to buy non-sale items.

Once you enter, there's the shopping cart. This invention was designed in the late 1930s to help customers make larger purchases more easily.


In supermarkets, high margin departments like floral and fresh baked goods are placed near the front door, so you encounter them when your cart is empty and your spirits are high.    
Flowers and baked goods also sit near the front of stores because their appealing smell activates your salivary glands, making you more likely to purchase on impulse.

Supermarkets like to hide dairy products and other essentials on the back wall, forcing you to go through the whole store to reach them.



Once customers start walking through a store's maze of aisles, they are conditioned to walk up and down each one without deviating.

Most stores move customers from right to left. This, combined with the fact that America drives on the right, makes people more likely to purchase items on the right-hand side of the aisle.

Anything a store really wants customers to buy is placed at eye level. Particularly favored items are highlighted at the ends of aisles.

There's also kid eye level. This is where stores place toys, games, sugary cereal, candy, and other items a kid will see and beg his parents to buy.
Sample stations and other displays slow you down while exposing you to new products.
Stores also want items to be in easy reach. Research shows that touching items increases the chance of a purchase.

Color affects shoppers, too. People are drawn into stores by warm hues like reds, oranges, and yellows, but once inside cool colors like blues and greens encourage them to spend more.

Hear that music? Studies show that slow music makes people shop leisurely and spend more. Loud music hurries them through the store and doesn't affect sales. Classical music encourages more expensive purchases.
Store size matters, too. In crowded places, people spend less time shopping, make fewer purchases (planned and impulsive), and feel less comfortable
Stores not only entice you with sales, they also use limited-time offers to increase your sense of urgency in making a purchase.
The most profitable area of the store is the checkout line. Stores bank on customers succumbing to the candy and magazine racks while they wait.
Finally, there is the ubiquitous "valued shopper" card. This card gives you an occasional deal in exchange for your customer loyalty and valuable personal data.
Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading