Coolmate allows customers to return items within 60 days, even worn clothes

, Coolmate allows customers to return items within 60 days, even worn clothes

Mr. Nam Nguyen – Mentor Shark Tank Vietnam once assessed that Coolmate’s return policy helps customers make quick and secure buying decisions, and has a higher closing rate. But that will be a huge burden for businesses.

This breakthrough comes from the fact that Coolmate CEO Pham Chi Nhu realized that to do well online, it must come from the seller. Pham Chi Nhu believes that the difficulty in exchange is one of the problems that hinder customers from buying.

” How to convince people when 50% are not satisfied, lose faith? They do not believe in online products, and only buy when very cheap or vouchers a lot. To change, we must have a certain policy. From there, I came up with such a commitment to return, first to return 45 days, then to increase it to 60 days.

And we do it very aggressively. The proof is that we commit within 12 hours when the customer sends the request to be refunded. They just need to fill out an online form very quickly, including account number, phone number, within 12 hours they will receive the money. After that, a postman will come to the house to pick up the goods later.”

Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 1.Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 1.

Coolmate CEO – Pham Chi Nhu

Survey on “Consumer Return” in the US and return policy of businesses in Vietnam

It sounds like Coolmate is “outstanding” but in fact in the world the concept of “consumer return” is not strange. Suppliers often use this method to capture the “hearts” of customers, in order to drive revenue through improving the customer experience after purchase.

According to the consumer return behavior survey on power reviews, based on a survey of 7,688 US consumers aged 18 to 80 in 2021, the following information is for reference.

Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 2.Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 2.

Nguồn dữ liệu: Consumer Survey: Returns in Retail in 2021 – PowerReviews

One positive thing is that the group of “always” and “regular” customers who return products ordered online account for only about 7%.

According to the above statistics, 88% of the respondents have ever returned clothing products, 44% have ever returned shoes. The numbers that make businesses in the fashion industry can’t help but have a headache

Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 4.Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 4.

Nguồn dữ liệu: Consumer Survey: Returns in Retail in 2021 – PowerReviews

The group of reasons for the most returns is probably Nonconforming Products, accounting for 70% of the respondents.

“In the US, fashion companies face high return rates of up to 30-40%”

Mr. Nam Nguyen – Mentor Shark Tank Vietnam once assessed that Coolmate’s return policy helps customers make quick and secure buying decisions, and has a higher closing rate. But that will be a huge burden for businesses.

“In the US, companies in the fashion industry face a high return rate of up to 30-40%. For example, I want a beautiful shirt for a wedding. I know which company has a return policy. If you pay in 60 days, I will buy that shirt.I wear it to parties 1-2 times, I keep it very clean and then return it, get my money back.

Maybe in Vietnam this movement is not popular, but in the US, this trend has a great influence on businesses and is an extremely headache problem, which can kill businesses if not handled well. Hopefully Coolmate has a good strategy to handle this, because if it hasn’t happened yet, it will definitely happen in the future.”

CEO Pham Chi Nhu himself in a recent interview admitted ” There are customers who change up to 5-6 times. Even many people just send a request to be changed, they change it 3-4 times, it can be embarrassing. , so no more changes.” 

Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 5.Allow customers to return items within 60 days, wear clothes and get a refund: Is Coolmate the dominant player in the fashion industry? - Photo 5.

Undeniably, Coolmate’s return policy is a premise for businesses to win the trust of customers and quickly build a reputation in the market. However, when viewed from a financial perspective, it will create a “burden” of costs for businesses.

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The first is the cost of capital. To some extent, the return policy of up to 60 days contributes to prolonging the average number of days of inventory, shortening the working capital turnover, and reducing the efficiency of capital use of the enterprise.

In addition, businesses will incur costs for used returned goods, handling personnel costs, shipping costs to receive goods back…

How to balance between “Benefits” and “Damages”

In Vietnam, large enterprises in the electronics industry, such as The Gioi Di Dong, Mediamart… all have sales policies that allow customers to be flexibly exchanged.

The general rule to return goods is that the product is still in its original condition, intact, with all labels, boxes, purchase documents… Besides, businesses also set regulations on time. , conditions to be exchanged. Mobile World, for example, allows customers to return products and charge a fee for the refund (% of product value).

This is also a way to limit risks to businesses, improve buyer awareness and compensate for “damage” caused by receiving returned goods.

In the fashion industry, most brands from high-end to low-end or retail stores have a policy for Product Exchange within 3 days (up to 7 days) after purchase, the exchange is applicable to products with tags still intact, unused, not dirty, torn, .. and only exchanged for products of higher or equal value, not refunded.

It would be strange for someone to give you back a shirt after buying it… 59 days. Is that the reason why Coolmate is different and increases production so quickly?

CEO Pham Chi Nhu said, ” In fact, we measure that rate (return goods). When within the allowable threshold, we do not change, nor tighten the policy. Given the policy, the opinion is of Coolmate is to look at the majority of people who benefit from that policy. And of course, any policy will have a story of profiteering, but when the rate of profiteering is low, we accept it.”

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In addition to the intentional profiteering of consumers, there are also other objective reasons that customers want to return such as:

(i) Unsuitable products: This is probably not too “bad” for Coolmate when the immediate orientation is only consistent with the production of men’s clothing, not encroaching on the women’s fashion segment. Men’s fashion with products such as T-shirts, socks, underwear, trousers (shorts) and shirts are relatively common and easy to wear.

(ii) Damaged and defective items: Coolmate’s careful and professional packaging process now helps to limit the rate of damaged or defective goods reaching customers.

(iii) The product does not match the description, delivery is late,..: These causes can be proactively controlled by most businesses.

If we consider the costs arising from the exchange of goods as a “burden” of the business, the problem is how to manage that cost so that the business does not “slouch”.

This requires the leadership apparatus to always control, measure and “anchor” costs at a certain percentage of revenue to ensure profit margins. From there, it is possible to flexibly change the policy when realizing that the risk is increasing, such as collecting a return fee to partially offset the costs incurred?

Seen in a positive way, this challenge will put businesses in a state of always having to produce the best quality products, publish the most truthful and accurate information, deliver the fastest, most secure (with possible) to minimize the case that customers return items due to dissatisfaction.

All of this, in general, benefits consumers in particular and inspires other businesses to uphold customer experience in sustainable development.

Source: CafeF

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