WSJ article: "REI Ends Era of Many Happy Returns"

Does this mean I have to learn how to patch Thermarests?

I keep seeing and hearing over and over that climbers are cheap...are they really? I guess that there is a not insignificant subset of climbers who are true dirtbags (I used to be one) and will try and worm out of paying for a $5 campsite (or return blown out shite to REI).

But I would contend that the majority of climbers, especially regular climbers are not what I would call "cheap." Most climbers I know have full time jobs and can damn well afford all the shiny new gear they need.

Climbers as a whole are not cheap. Cheap is ghetto kids playing basketball with shoes completely worn through the sole. Cheap is people in Brazil playing soccer barefoot. Cheap is locals in Costa Rica surfing better than you on a broken board from the 80's. How many software engineers with salaries over 100k went to the Valley this weekend?

Locker wrote:" By the way, I wouldn't step foot in a Walmart if they were giving away free C4's..." I call TOTAL BULLSHIT on that! ;-)

He would send his wife/GF/kids in to get them!!

Ian - my point was not so much that climbers are cheap, just that the population of non-cheap climbers, even if in the majority, is not large enough to sustain even big stores like REI, let alone many small retailers. (with some key exceptions in prime climbing venues)

The money is in appealing to a larger population who tend to be generalists, not hard-core. That's why the selections at REI suck if you are looking for specific "harder core" specialty items.

Tparis - Good thinking...

I need some cheese

to go along with this whiney bitch theater

you might be "extreme," but are you pastel sahara sunset extreme??

Buff - not sure who your post(s) is(are) directed towards, but its not a complaint nor about "extreme". Just observations. REI is more of a generalists store (at least in my area), but if you want stuff like AT boots/skis, most steep ice stuff, top end whitewater gear, top end Mtn bikes, etc yadda yadda, you need to look elsewhere.

And just to answer your question, I am so extreme that MY shit is all custom....you can't buy it anywhere --even though you know you want to.

Bill Shubert wrote:A year of climbing from a pair of shoes isn't great, but it's bearable.

I must be missing a secret somewhere...my shoes tend to need a resole in less than 8 months. Maybe I climb a lot, oh well.

npr.org/blogs/money/2013/09…

Sunny Pettinati walked into the L.L. Bean store in Yonkers, N.Y., clutching a plastic bag and looking a little embarrassed.

"I'm returning a sweater that I purchased, I think, about 10 years ago," she said.

The sweater had sat in a drawer, unworn, for years, and she was trying her luck with the store's famously lenient return policy.

It turned out to be painless. A few taps on the keyboard, and the saleswoman handed her a gift card worth the full value of the sweater.

L.L. Bean has an astonishingly lenient return policy. The company has taken back a live Christmas wreath that had turned brown and a shirt ripped by a rescue crew after a car accident. My own Planet Money colleague, Lisa Chow, has been returning her L.L. Bean backpacks for two decades whenever a zipper breaks. She's gone through three or four backpacks this way. Every time, they send her a new one free.

I asked Steve Fuller, L.L. Bean's chief marketing officer, if Lisa was gaming the company's system. He was a model of nonjudgment. "If she believes her zippers should last a longer time, we'll respect that and we'll refund her money or give her a new product until she's happy," he said.

L.L. Bean customers seem more worried than Fuller about the return habits of their fellow shoppers. "A customer will come to the desk after watching a return, and she or he will say: 'I can't believe you're taking this back. I hope these people aren't ruining it for the rest of us,' " Fuller said.

L.L. Bean competitor REI used to have a return policy like L.L. Bean's. "I've seen some 15-year-old shoes that went directly into the trash in a toxic waste bag," Tim Spangler, REI's senior vice president for stores, told me.

But REI began to worry it was getting a reputation as a sucker. Customers started giving it nicknames like "Rental Equipment Inc." "Rent Every Item" was another. Some called it "Return Every Item."

Two years ago, REI noticed that the number of people returning really old stuff was increasing. Some customers talked about their returns on social media, which led to even more people bringing in their old junk to get refunds. It was hurting profits.

After intense debate and customer surveys, Spangler and his team unveiled a new policy: From now on, you get only a year to return your stuff.

"I don't want to be in the business of looking somebody in the eye behind the counter and questioning the morality of their return," Spangler said. "I want to be able to say, 'Look, it's outside the confines of what we agreed upon when you bought it, or it's within it, and we're going to take care of you,' and leave it at that."

For his part, Fuller of L.L. Bean says his company is sticking to its policy. He says he's never been in a meeting where someone questioned the value of the guarantee. The only question he gets is whether the company talks about it enough.

If anything, L.L. Bean seems to be welcoming the customers REI might be willing to let go. Behind its store counters, the guarantee is written in giant text. And there are a few reasons why this may be better business for L.L. Bean. Many of its sales are mail order, so it's less convenient for customers to return stuff. And, Fuller says, the crazy return stories are great marketing for the company.

"How many times has your colleague talked about the fact that she's returned that backpack, and L.L. Bean gave her a new one without question?" Fuller said. "That's really the value of the guarantee."

As a business practice, it's expensive. As advertising, it's cheap.

;)

Brendan Blanchard wrote: I must be missing a secret somewhere...my shoes tend to need a resole in less than 8 months. Maybe I climb a lot, oh well.

In our house, my wife and I each wear out two pairs per season, and it's not from sloppy footwork (at least not on her part). I only return climbing shoes to REI if they turn out not to fit (because they never carry the ones I want in the store, only online). Once I break them in, I keep them.

I've returned stuff after a full season, because I tend to give my gear a chance to win me over through a number of different conditions. I'm not miffed by the change in REI's return policy. I've had salespeople there tell me "don't worry, you can always bring it back if it doesn't work out" which now strikes me as a little bait-and-switch. But, I suspect the issue won't come up. I've only returned a handful of items over the past 20 years.

Ray Pinpillage wrote: competition does not decide if you stay in business (assuming we keep talking about retail sales). The rest is just hyperbole to shift blame.

Competition is a major factor in determining if a business succeeds or not. Obviously business success is dependent on many factors, but it can be hard for a small business to compete with large corporations. For example, Aloha Airlines was ran aground when their major competitor go! Airlines undercut their prices by offering flights at cost. go! Airlines continued to offer at-cost flights until Aloha could no longer compete. Once go! destroyed Aloha and cornered the market, they increased their prices tenfold to compensate for their previous losses and increase their capital. I am surprised they were not slapped with anti-trust law violations as what they did is clearly illegal. But that's the point. When you have money you can do things that others cannot do, making it very hard for others to compete.

20 kN wrote: Competition is a major factor in determining if a business succeeds or not. Obviously business success is dependent on many factors, but it can be hard for a small business to compete with large corporations. For example, Aloha Airlines was ran aground when their major competitor go! Airlines undercut their prices by offering flights at cost. go! Airlines continued to offer at-cost flights until Aloha could no longer compete. Once go! destroyed Aloha and cornered the market, they increased their prices tenfold to compensate for their previous losses and increase their capital. I am surprised they were not slapped with anti-trust law violations as what they did is clearly illegal. But that's the point. When you have money you can do things that others cannot do, making it very hard for others to compete.

That's true but does not contradict my statement. Competition exposes weak business but ultimately the customer decides who stays in business (assuming no government interdiction, antitrust, etc).

I'm curious why you think antitrust played a part in your example? Antitrust involves more than just selling below cost.

Ray Pinpillage wrote: That's true but does not contradict my statement. Competition exposes weak business but ultimately the customer decides who stays in business (assuming no government interdiction, antitrust, etc). .

Question: when a business, who's revenue exceeds 1 billion every year, creates policies just to put competitors out of business, that is not a problem? Ok, perhaps this is a bit heartless but it is the basis of free markets. When they change those policies after they have eliminated their competition to make more money that seems to be fine as well. Suspect for sure, but definitely full of rational self interest.

But of course you know REI is listed as a CoOp and receives many tax breaks around the country. This is one of the reasons that they can enact those same policies that got them ahead. So, actually, you are correct, it is the government that is allowing REI to function the way they do. These tax breaks are one of the reasons REI is able to create systems that no local retail can compete with.

We all know this is not a CoOp. We all know that REI is a corporation focused on profits, especially after this announcement. This entity gladly will put it's competitors out of business while not giving a shit about the policies that helped to do that.

Would you agree that it's time for them to drop the charade and be realistic, a 10 percent discount does not a coop make. A CoOp wouldn't be focused on profits but it's members. This business just proved that it's business, not a CoOp.

Here are REI's financials. REI Financial Statement

It appears that REI's tax rate is just under 35%. That's pretty much the highest corporate tax rate in the US. I don't know the tax liability difference between a CoOp and a Corporation but I don't think it really matters. I don't care what their business entity is, its really irrelevant.

This thread is like a gut shot deer staggering around just waiting for a kill shot to CF

KerBLAAAM!!!!

Ray Pinpillage wrote:corporate tax

Oxymoron right there. ;)

Ray Pinpillage wrote: 'm curious why you think antitrust played a part in your example? Antitrust involves more than just selling below cost.

Yes, but I believe that antitrust is not just one law, it is a group of many laws, including ones that refer to selling at a loss. I am not an attorney, but I would argue that selling flights at cost, or near-loss, until a company goes out of business violates both the predatory-pricing and monopoly-creation subsections of the federal antitrust law package.

What go! Airlines did is basically the same thing that Standard Oil did back in the day. They forced their competition out by undercutting them, then they monopolized the market and last they inflated the prices once they were the sole remaining service provider in the area. Flights to the inner islands used to cost as little as $10 for military personal in the slow season and now cost no less than $120 (each way) in the slow season.

Ray Pinpillage wrote: That's true but does not contradict my statement. Competition exposes weak business but ultimately the customer decides who stays in business (assuming no government interdiction, antitrust, etc).

That's a pretty massive assumption to just slip in parenthetically. So you're saying that competition exposes weak business, but only under circumstances that have never actually occurred? Show me a market that has no government/authority interdiction, and I'll show you a libertarian thought-experiment-turned-belief.

Dan Austin wrote: That's a pretty massive assumption to just slip in parenthetically. So you're saying that competition exposes weak business, but only under circumstances that have never actually occurred? Show me a market that has no government/authority interdiction, and I'll show you a libertarian thought-experiment-turned-belief.

Don't be obtuse. Government is in everything we do. Just because one company made it big doesn't mean they got special treatment. REI's taxes are public.

The discussion is about a member of the forum claiming they were put out of business because REI had an unfair advantage. Every chance to change the subject has been taken. Show me where REI didn't just absorb the loss (build it into their prices) of their return policy. Their prices are retail, they aren't undercutting competitors by selling below cost. REI didn't decide they were going to move into town and put XYZ climbing shop out of business. All of these extra topics about Walmart, airlines, etc are a diversion.

Customers choose who stays in business and J Q was fired by his customers. He had a weak business and REI drove the final nail. There are tons of private climbing shops that have been around a long time that compete just fine with REI.

Ray Pinpillage wrote: Their prices are retail, they aren't undercutting competitors by selling below cost.

Who goes to REI and pays retail? Or EMS for that matter? EMS: Every Month Sale!

After doing some quick research it looks like REI profits dropped 3.9% in 2012. Their sales numbers went up though. They laid off 1100 employees from their HQ a few months back. It looks like REI has tighter margins now. I would imagine some "bean counter" came up with the idea of cutting the return policy to make up for lost revenue.. Not because I returned my shoes.