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WSJ article: "REI Ends Era of Many Happy Returns"
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By Mark Pilate
Sep 21, 2013

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.


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By Brendan Blanchard
From Strafford, NH
Sep 21, 2013
Obi Wan Ryobi - Darth Vader Crag, Rumney NH

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.


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By bearbreeder
Sep 25, 2013

www.npr.org/blogs/money/2013/09/25/223787129/what-happens-wh>>>

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.


;)


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By Peter Jackson
From Rumney, NH
Sep 25, 2013
Just in case the two big belay anchors aren't obvious enough for you, here is where to find the belay station.

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.


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By 20 kN
From Hawaii
Sep 25, 2013

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.


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By Ray Pinpillage
From West Egg
Sep 25, 2013
Cleo's Needle

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.


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By J Q
Sep 25, 2013
Me again!

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.


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By Ray Pinpillage
From West Egg
Sep 25, 2013
Cleo's Needle

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.


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By Mark Pilate
Sep 25, 2013

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

KerBLAAAM!!!!


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By 20 kN
From Hawaii
Sep 26, 2013

Ray Pinpillage wrote:
corporate tax

Oxymoron right there. ;)


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By 20 kN
From Hawaii
Sep 26, 2013

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.


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By Dan Austin
From San Francisco, CA
Sep 26, 2013

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.


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By Ray Pinpillage
From West Egg
Sep 26, 2013
Cleo's Needle

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.


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By Bill Kirby
From Baltimore Maryland
Sep 26, 2013
Me eating a cliff bar walking back from Frankenstein Amphitheater

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.


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By Scott McMahon
From Boulder, CO
Sep 26, 2013
Bocan

Kirby1013 wrote:
I gotta defective fitting from an REI employee. Haha.. The amount of time was crazy long because of ignorance of the policy. I went to the Mountaineer for my second pair and despite me saying these are too tight a hundred times. they were right. The TC Pros stretched out and fit great. The way I see it you fit me wrong you owe me the right size. You fit me right and I decide to buy the wrong size.. you owe me a "I told you so" and get the hell outta my shop! I will however agree that returning those shoes with a hole in them is suspect. I just figured no matter what condition they're the wrong size. Plus I caved to peer pressure!


I learned a long time ago never to ask any REI employee's serious questions. 8/10 of them won't know the answers and just came over from ladies footwear to help.

No offense to the REI employees that climb.


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By doligo
Sep 26, 2013
Jose Cuervo Fruitcups dirtbag style

Ian G. wrote:
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?


Poor is not equal to cheap. Also, you have obviously never been to an inner city. All them kids have the latest $200 Air Jordans.

And in the eyes of retailers like REI, climbers ARE cheap. There are not many consumable parts they can sell once they sold you that rope or a cam. Even apparel, you don't need any specialized wear for your average rock climber - just a pair of jeans and an old t-shirt. Cycling on the other hand... Even the simplest recreational activity like running is way more lucrative than climbing to retailers. An average dedicated road runner needs to get their running shoes replaced every 6 months. And you can sell an endless supply of shorts, shirts and socks to them.

The thing about retailers like REI is that their core customer base is an average city dweller who likes to recreate on weekends, and likes trying different things: kayaking this weekend, climbing the next, once a year ski trip, camping trip in the summer... All while wearing the latest cutest outfits. Climbing is probably the only recreational discipline where dedicated practitioners keep shopping at REI. Even resort skiers, once they graduate from blue runs, start shopping at real ski shops - because they know better than getting their skis tuned by a kid who probably never set their foot on the snow.


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By J Q
Sep 26, 2013
Me again!

Ray Pinpillage wrote:
There are tons of private climbing shops that have been around a long time that compete just fine with REI.



This comment goes a long way to show just how out of touch you are about this subject. The king is wearing some pretty awesome clothing today huh? Out of the hundreds of colleagues I used to attend OR shows with, I can now count the number or remaining ones on my hands.



Ray Pinpillage wrote:
REI didn't decide they were going to move into town and put XYZ climbing shop out of business. .


Actually, REI does do this; your comment show a lack of comprehension about the free market. They do take into account the weakness of the business in certain areas and then they do their best to capitalize on those weaknesses. They absolutely do decide to move into a new markets and put the existing provider out of business. It's intentional. They are not benevolent like you would like to believe.

If a very strong business exists in a community that they cannot compete with, then they don't move into that town. Think Durango. Being an arrogant dick about this situation does not change how REI does business. The only person you are fooling is yourself.

I actually have no problem with the free market system, I just can't believe they are going to change their policies now that they dominate the market, I find it very disingenuous. You don't seem to understand the concept.


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By Patrick Mulligan
Sep 26, 2013
The top of the tufa on Magma

And Backcountry.com just changed their policy to 90 days.


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By 20 kN
From Hawaii
Sep 27, 2013

J Q wrote:
I actually have no problem with the free market system, I just can't believe they are going to change their policies now that they dominate the market, I find it very disingenuous.

I am not sure how you dont understand why they would change their policy if you understand how American aggressive capitalism works. That is how corporations work. First they create a monopoly, then once they control the market they find ways to cut product quality and increase prices. It is all about profit. If they can find a way to make more money they are going to do it. In this case, I guess REI thinks they have cornered the market and can reduce their product quality to increase their margin. Maybe it will pay off, maybe not, but regardless the decision was unquestionably came about as a way to try to make more money.

It's always important to remember why corporations exist--to make money. With a policy change this big I am sure the CEO and CFO had to sign off (or their equivalent if REI doesent have them). The CEO, CFO, COO, and CIO's only real job is to find ways to make the company more money, either directly or indirectly. So if a company makes a policy change that goes through one of the Cxx's, you can be almost certain it is an attempt to cut costs, increase revenue, or otherwise make more money. CEOs dont do anything else. Same goes for the VPs who answer directly to the directors and implement their changes.


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By Ian G.
From PDX, OR
Sep 27, 2013
Mens Crisis Center .12a

From Doligo

"Poor is not equal to cheap. Also, you have obviously never been to an inner city. All them kids have the latest $200 Air Jordans.

And in the eyes of retailers like REI, climbers ARE cheap. There are not many consumable parts they can sell once they sold you that rope or a cam. Even apparel, you don't need any specialized wear for your average rock climber - just a pair of jeans and an old t-shirt. Cycling on the other hand... Even the simplest recreational activity like running is way more lucrative than climbing to retailers. An average dedicated road runner needs to get their running shoes replaced every 6 months. And you can sell an endless supply of shorts, shirts and socks to them.

The thing about retailers like REI is that their core customer base is an average city dweller who likes to recreate on weekends, and likes trying different things: kayaking this weekend, climbing the next, once a year ski trip, camping trip in the summer... All while wearing the latest cutest outfits. Climbing is probably the only recreational discipline where dedicated practitioners keep shopping at REI. Even resort skiers, once they graduate from blue runs, start shopping at real ski shops - because they know better than getting their skis tuned by a kid who probably never set their foot on the snow."

Nah, I've never been to an inner city. Only spent five years teaching middle school in East Oakland, one of those coaching basketball (actually, those kids were more accurately coaching me...) The kids who wear $200 sneakers are few and far between and the ones that do have them usually still have tags on them;I'll let you figure out why.

Climbing and most outdoor pursuits are and always have been the realm of the privileged and the upper middle class. Not saying there aren't dirtbags or poor climbers or people who used to be poor who climb, but the majority of climbers are white, upper middle class, or at least have the luxury of a familial safety net.


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By doligo
Sep 27, 2013
Jose Cuervo Fruitcups dirtbag style

Ian G. wrote:
Climbing and most outdoor pursuits are and always have been the realm of the privileged and the upper middle class. Not saying there aren't dirtbags or poor climbers or people who used to be poor who climb, but the majority of climbers are white, upper middle class, or at least have the luxury of a familial safety net.


I don't disagree with you. People with money and privilege can also be cheap. But that's not the point. The virtue of climbing equipment is that it's pretty durable and there is not much upkeep. There are no razor-blade model expendable parts that need to be replaced regularly. Your average weekend warrior desk jockey won't wear out those climbing shoes very soon. Ironically, full-time climbers that go through equipment are usually on the lower end of the economic spectrum and tend to be frugal - not a very good demographic in the retailers' eyes.


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By Ray Pinpillage
From West Egg
Sep 27, 2013
Cleo's Needle

J Q wrote:
This comment goes a long way to show just how out of touch you are about this subject. The king is wearing some pretty awesome clothing today huh? Out of the hundreds of colleagues I used to attend OR shows with, I can now count the number or remaining ones on my hands. Actually, REI does do this; your comment show a lack of comprehension about the free market. They do take into account the weakness of the business in certain areas and then they do their best to capitalize on those weaknesses. They absolutely do decide to move into a new markets and put the existing provider out of business. It's intentional. They are not benevolent like you would like to believe. If a very strong business exists in a community that they cannot compete with, then they don't move into that town. Think Durango. Being an arrogant dick about this situation does not change how REI does business. The only person you are fooling is yourself. I actually have no problem with the free market system, I just can't believe they are going to change their policies now that they dominate the market, I find it very disingenuous. You don't seem to understand the concept.


Nice anecdote and strawman.

20 years and less friends at the trade shows...better call the news!

Thanks for making my point. Next time you'll do a better job with your customers I hope. REI competed in a market with weak competition (you) and your customers fired you. Perhaps they knew who you were but really they just rolled out like they do in every market like yours.


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By Ray Pinpillage
From West Egg
Sep 27, 2013
Cleo's Needle

20 kN wrote:
I am not sure how you dont understand why they would change their policy if you understand how American aggressive capitalism works. That is how corporations work. First they create a monopoly, then once they control the market they find ways to cut product quality and increase prices. It is all about profit. If they can find a way to make more money they are going to do it. In this case, I guess REI thinks they have cornered the market and can reduce their product quality to increase their margin. Maybe it will pay off, maybe not, but regardless the decision was unquestionably came about as a way to try to make more money. It's always important to remember why corporations exist--to make money. With a policy change this big I am sure the CEO and CFO had to sign off (or their equivalent if REI doesent have them). The CEO, CFO, COO, and CIO's only real job is to find ways to make the company more money, either directly or indirectly. So if a company makes a policy change that goes through one of the Cxx's, you can be almost certain it is an attempt to cut costs, increase revenue, or otherwise make more money. CEOs dont do anything else. Same goes for the VPs who answer directly to the directors and implement their changes.


REI is boiling the frog. This is probably a long term process to change the return policy and starts with the unlimited returns. The next round of changes probably won't get as much attention.


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By Mark Pilate
Sep 27, 2013

Hopefully REI is boiling the right critter. I heard if you boil lobsters, they scream....


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By mattjohnson
From Laurens, SC
Sep 27, 2013

It seems like by backing REI's business methods and willingness to put other stores out of business, you are saying that they are not doing anything unethical; that they have just been the winners and found the best way to get ahead under the current system and set of laws, so Kudos to them!

So why not defend the people who take advantage of REI's return policy? These people aren't breaking any laws either, are they? They have found a way to beat the system and are taking advantage of it. And the system they are taking advantage of is one that REI themselves put in place, brags about, and uses to get ahead and to put stores without the same financial capabilities out of business.

Oh, but those people are just cheap hippie dirtbag assclowns, while REI is an honest, smart, upstanding store with only the customer's best interests in mind. Seems hypocritical.


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