1.27.2017

Why I Don't Feel Guilty Using Return Policies

I see a lot of people expressing shame or guilt over returning items from cosmetics retailers like Sephora, Ulta, Nordstrom, etc. In my experience, there's nothing better than being a customer of a retailer with a generous return policy- there is value for me and value for the company.

The Economic Argument


A company that exists in a capitalist system will not offer services it cannot afford. If it does do this, over the course of a year, or several years, it will lose enough money that the company will either...

  • Change its policies going forward
  • Go out of business
There is no third option where a company continues to "suffer" abuse of its policies by customers, all the while refusing to change anything. There is such a thing as unsustainable corporate generosity (though it rarely goes unchecked for long) and of course, it's possible for a customer to game the system and get greater value from the company than what a person could reasonably expect to draw. But by virtue of the fact that it's unsustainable, a company has only the option to discontinue it, or to go out of business. If you continue to see Sephora flourishing, building new stores, and growing, you can be pretty sure they're not going out of business as a result of having a generous return policy.

The idea that there are millions of people "taking advantage" of Sephora's "generosity" is an unfounded and very funny way to look at a corporate entity operating within the laws and principles of a free market economy. 

Sephora doesn't do anything that Sephora doesn't think will further its bottom line. Any costs or outward expenditures by Sephora are damn sure undertaken with the understanding that any initial outlay will see a promised return in other forms. It costs money for Sephora to build stores- why don't they just have an online portal and fulfillment centers? Because Sephora anticipates the cost of building and maintaining the store will have a greater positive impact on their business than negative. Without retail stores, Sephora customers would have less confidence buying online- there's no opportunity to test or compare colors, not to mention that part of what Sephora promises is a certain "elevated" customer experience. It costs money for them to train employees, dress them in nice uniforms, maintain service standards, etc, and yet the company continues to bear these costs because it sees return in the form of customer satisfaction and loyalty which ultimately manifests in more revenue generated over time. 

A return policy is simply another expenditure for a company- it spends money in the form of lost revenue in refunds for returned product in order to ensure that each customer will spend more money over a period of time. Let's say I spent $1500 at Sephora in the year 2016. And I returned $400 worth of product. Sephora has decided, after taking customer behavior (past and ongoing) into account that on average, their customers' increased confidence/comfort from a return policy manifests in greater revenue than losses. While the actual revenue I generated as a customer may be only $1100 (not $1500- we subtract my returns from my total purchases) in fact in the absence of a return policy, I may have only spent $300 at Sephora. I may have been too frightened to spend lavishly, since I would have no recourse if I ended up hating my purchase. Sephora knows this. For them, it's worth it to bring me up from a $300 customer to an $1100 customer. It costs them $400 to do so, and generates $800 more revenue from me.

Of course this is a vast oversimplification- it doesn't take into account the markups on cosmetics (which are mind-blowingly impressive) and many other factors. But essentially the simplified breakdown demonstrates what I mean- Sephora isn't giving me the opportunity to return items out of the goodness of their corporate hearts. It certainly contributes to the "goodwill" the company has in the eye of its customers, but ultimately, if it cost Sephora more money to implement and offer its return policy than it netted them in additional revenue, they would eliminate the returns policy. 

As a customer, if you allow feelings of guilt to stop you from returning an item you don't need, you're wasting your time and energy. The company couldn't care less- you are one fraction of a percent of their overall customer base, and it has already taken your reluctance into account along with others' confidence to use the policy. Get over it- use the policy or lose the economic benefit that's built in for you. If you pay taxes, you know that "tax loopholes" are intended to be used. You aren't supposed to pay the maximum, over do more than is expected of you. You're not in a romantic relationship with Sephora, which means that shopping there is all you owe them. You don't have to act in their best interests- in a free market economy, businesses act in self-interest and they assume consumers will as well. If you don't, you're just in a corner singing kumbaya to yourself and losing economic value that you otherwise would be able to take advantage of.

The Environmental Argument


Of course there are other, and perfectly valid, reasons that someone might not want to overuse a return policy. In my opinion, the most significant one would be a reluctance to contribute to unnecessary waste. In the USA, returned cosmetics nearly always go straight in the trash. The company can't guarantee you didn't do something disgusting with the lipstick you returned while it was in your possession, so they can't take responsibility for what happens when another customer buys your used goods. Because of this reality, people feel that their purchase of a lipstick that is barely used and then trashed is morally indefensible. It's true- trash and waste do add up. That cannot be ignored. Throwing away items that took precious resources to create is not a good thing, even if economically, neither the company and the customer do not see immediate "costs."

In terms of this argument, I feel that it's up to the individual consumer to manage and adjust their consumption habits. I myself have been that person who bought 2 or 3 foundations that didn't work out, only to return them and have them trashed. That experience did not happen and then disappear from my psyche- in fact it informed the consumer I am today. Because I regret the wastefulness that resulted from my "reasonable" consumption habits, I altered my standard of what is reasonable. Nowadays, I do not find it acceptable personally to order a foundation, sight unseen, from an online entity. I will only purchase foundations I have personally tested in-store for color and formula purposes. While I have still had to return some items, even after they pass the minimum in-person testing process, the number is greatly reduced. For now, for me, the "cost" is acceptable. And that's a judgment each person makes for themselves, as we all have a different acceptable threshold.

I would also ask the average makeup consumer to take a critical look at the type and amount of waste generated by buying-then-returning vs. buying-then-consuming a product. Let's take a lipstick example. Here the environmental costs are:
  • Resources and energy consumed to create the plastic tube
  • Resources and energy consumed to create the external cardboard box
  • Resources and energy consumed to ship the item to the store (or maybe to your home)
  • Resources and energy consumed to create the actual lipstick portion
If you return your lipstick, here's what was "wasted" to use the absolute harshest term:

  • Resources and energy consumed to create the plastic tube
  • Resources and energy consumed to create the external cardboard box
  • Resources and energy consumed to ship the item to the store (or maybe to your home)
  • Resources and energy consumed to create the actual lipstick portion
Wow, much waste, very sad, right?

Let's look at the "virtuous" alternative of not returning, however. If you use the lipstick up, love it to death, and wear it every day for 6 months, here's what was "wasted:"
  • Resources and energy consumed to create the plastic tube
  • Resources and energy consumed to create the external cardboard box
  • Resources and energy consumed to ship the item to the store (or maybe to your home)
  • Resources and energy consumed to create the actual lipstick portion
In fact, you see the only true thing that you gain by using a lipstick up vs. trashing it is that you use the approximately 0.5 oz of wax and colorant instead of throwing it in the trash immediately. The rest of the packaging gets recycled or trashed regardless, whether the trashing occurs today or 6 months from now. The resources contained inside just the product portion of the lipstick are minor compared to the gas and plastic consumed to create the product and deliver it. We're talking 100% waste in the first example and maybe 99% waste in the second example.

Because makeup is undeniably a luxury, not a necessity, any and all economic and environmental costs are, to be frank, a waste. Just because you get some ephemeral satisfaction or self-esteem boost from being a consumer of makeup does not mean that it's a truly necessary product. And hey, who cares? That's a large portion of the materials we as humans produce and consume. We individually make a decision of what is an acceptable amount of consumption for each of us. Someone living off the grid and subsisting off the land has a different "acceptable" threshold than someone who lives in a high-rise in a city, commutes to their job, flies on planes, and buys packaged foods from the store. I personally don't have any interest in convincing or converting someone to my personal threshold. I truly believe it's a personal decision that can only be formed by thinking extensively about one's priorities and values.

However, in the end, I've decided am morally ok with being a makeup consumer. That means that I am not denying the negative consequences of indulging in frivolities, but that I will also try to be aware of all the costs associated. What you decide is entirely up you, but just be careful not to base your reasoning on unfounded or fallacious arguments. It will only end up hurting and costing you in the long run. When companies and consumers act in self-interest, everyone is accounted for. If you feel a company fails to satisfy your desires and needs, your best act of self-interest is to abstain from purchasing from them. Not everyone overlaps in terms of generating value- not every single transaction is a good deal. You can walk away from bad deals at any time, which is what encourages people to create mutually beneficial deals/transactions.

Edited to add on 1/31/2017:

The Mental Health Argument




An important aspect I neglected to discuss is the concept of your mental health and consumption habits in relation to return policies. This is a very fuzzy area that requires self-reflection and a willingness to be honest with yourself. The fact is that having the "safety net" of a good return policy often encourages reckless purchasing, because you can get your money back risk-free. That can serve to sabotage your own mindfulness and consumption goals by creating a consequence-free zone around purchasing.

If you ever feel that you are buying anything to change your mood or as a necessary component of having a good day, remember that shopping is not self-care. Shopping is a shortcut which has nothing to do with treating yourself well. If you have issues of compulsive behavior or obsessive thoughts/emotions, those root causes should be addressed without the safety blanket of return policies. Just because you can return something doesn't mean you should. And just because you return something doesn't always mean it's healthy for your brain long-term.


I tend to do better (I hazard a guess most people do) when I have some level of self-imposed restriction. I think most of us like to operate within a framework of what we consider to be acceptable behavior. In the past I have found that OVERuse of return/exchange policies led me to rabidly purchase items and then quickly return them, without putting in any genuine thought to what I was consuming and why. Any unchecked reckless behavior should be examined for validity. That holds true even in the face of the arguments made in the earlier sections. I would definitely advise you to consider all the factors in the context of your own bad habits and decide how much you are personally "allowed" to take advantage of return policies!


Further Reading and Related Posts


If you are interested in further reading, I recommend Thomas Sowell's excellent Economic Facts and Fallacies. The section of his book dealing with the Zero Sum Fallacy is particularly pertinent to the economic portion of the above post.

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