v30 #3 Squirreling Away: Managing Information Resources & Libraries — Are Bad Actors Driving Your Policies?

by | Jul 10, 2018 | 0 comments

Column Editor:  Corey Seeman  (Director, Kresge Library Services, Stephen M. Ross School of Business, University of Michigan;  Phone: 734-764-9969) Twitter @cseeman

I had the opportunity to watch the wonderful 2002 Disney movie Lilo and Stitch when I was reminded of one of my favorite quotes.  As the movie barreled towards a happy ending, we were reminded by Cobra Bubbles (voiced by the brilliant Ving Rhames) that “Aliens are all about rules.”1  And if I were to think of another group of people…or beings…who are also “all about rules,” it might be librarians.  We have rules about everything: policies, procedures, cataloging, metadata, and how much someone can use, borrow or download.  There is a very logical reason why we have these rules — but it is possible that they may have been generated for the wrong reasons.  And many of those wrong reasons are set up by bad behaviors from some of our users. We might call these our “bad actors.”

There are many types of bad actors out there.  There are some that are just bad (Tommy Wiseau — famously from the 2003 movie The Room).  There are good actors who have the habit of choosing bad roles (Nicolas Cage — that’s high praise).2  And there are good actors who turn out to be very bad people (Kevin Spacey and Bill Cosby for two — is it too soon)?  Anyway, with all the different types of bad actors out there, we can end up with policies that do more to thwart certain behavior than really reflect what type of relationship we would like to have with our communities and end users.

As I think about another sector in the economy with rules and regulations, I am thinking of retail.  As I have shared freely, I am a veteran of three weeks and one day in the JC Penney Manager Training Program right after college.  I realized quite quickly that it was not for me.  But in the stories that I remember from that short stint at the East Brunswick (NJ) store, was one the store manager told me.  JC Penney had a very liberal return policy.  Most of the time — there were no questions asked as the store gladly strove to make the customer happy.  But in the story shared with me, a local businessman bought a hot plate from the store and used it in his restaurant.  It was a product designed for home use, but was operating a large number of hours a day. That caused the product to burn out.  And when it did, the person brought it into the store for an exchange. This story repeated itself out and then (I believe) on the fourth or fifth exchange, the store manager interceded to say that the store was no longer going to exchange the product for a new hot plate since it was used in a manner that it was not designed for.  I have no idea if that person went to a different Penney’s store or upgraded to a commercial product-line.  Either way, it was not the store’s problem any longer.  

And while JC Penney has been known over the years as having a very customer-focused return policy, few have been able to be as well known as L.L. Bean.  Well, that is until this year.  On February 9th of this year, L.L. Bean announced that their unlimited returns program, a central tenant in their value proposition to customers since 1912, was being changed.  If you knew anything about L.L. Bean, it was likely about their return policy.  You can return anything at anytime. It is how this outfitter became known across the globe as a place where you can be assured that you were buying the best goods anywhere.  When Leon A. Gorman, grandson of L. L. Bean, died in 2015, the obituary in the New York Times featured an anecdote that cemented this return policy in retail lore.  “Like his grandfather, he was an avid practitioner of the outdoorsy existence and rigorously committed to customer satisfaction.  Those two sensibilities combined to produce the ethos that may have informed his grandfather’s decision in 1912 to return the money paid by 90 of his first 100 customers after the leather accidentally separated from the rubber soles of their hunting boots.”3  And when Steve Fuller was interviewed in 2015 for the Boardroom Insiders, the Senior Vice President and Chief Marketing Officer said this:

Lenient Return Policy:  L.L. Bean has an astonishingly lenient return policy.  Fuller has said that the Company wants customers to be happy with their purchase, and will accept returns on items purchased years ago.  “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.  Fuller 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, reported Planet Money.  Fuller adds that crazy return stories are a great marketing tool for the Company.4

And I think it really was.  The whole notion of a crazy return — something that no other store would honor (save for Nordstroms or REI — who ditched their lenient policy five years ago) became a reason why you did shop there.  It was part of the ethos of the brand. They made products that would last forever because they knew that this guarantee was hovering in the back of each customer’s mind.  The case in point was a leather bomber jacket I have from L. L. Bean.  I have had this coat since the mid-1990s, a gift from my mother — as has been every coat I own.  I have worn the heck out of it and it has been my constant winter protection since.5  I have had it repaired twice — once for a zipper and once for a pocket where the stitching was coming out.  In both of these instances, I did not even think for a moment about sending it back. My jacket is well worn, but in great shape.  I fully expect it to be the last winter coat I ever need.

But about the store….on February 9th, 2018, Shawn O. Gorman sent a message to customers with a modification to their return policy.6  What struck me was this statement in the message to customers:  “Increasingly, a small, but growing number of customers have been interpreting our guarantee well beyond its original intent.  Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”  He went on the write something even more puzzling: “This update adds clarity to our policy and will only affect a small percentage of returns. It will also ensure we can continue to honor one of the best guarantees in retail, with no impact for the vast majority of our customers.”  While they claim that the new policy will only affect “…a small percentage of returns,” the optics are very different. Overnight, the company went from a business that stood solidly behind every purchase to one that is casting a bit of doubt over the customer.

The Boston Globe reported that “L.L. Bean officials said the company has lost $250 million on returned items in the last five years, with the number of returns doubling in that period.  The annual losses on these items alone were ‘equal to the amount of revenue generated from Bean boot sales,’ they said.”7  Their annual sales hovered around 1.5 billion dollars during this time period, so it is not insignificant.  However, if we read this accurately, they might have lost $50 million a year on returned items — that is around 3.5% of their total sales if we go with the $1.5 billion figure.  What is interesting is that according to the National Retail Federation’s 2015 Consumer Returns in the Retail Industry report, the returns as a percentage of total sales is 8% and return fraud and abuse as a percentage of total returns is around 6%.8   So while these numbers seem big, it could be chalked up as the cost of doing business.  

The lore of abuse is a set of stories all to itself.  Nanos wrote “Stories among Bean customers have become part of New England lore — kids getting a new backpack every school year, and a mother who had been exchanging the same pair of corduroy pants for the past 30 years, according to accounts posted online.  One Appalachian Trail hiker recalled returning a poncho that ‘had burn holes, delaminations, tent spike holes, tears, blood stains, stretch marks and smelled more now than when new,’ he wrote in comments to a Globe story.”9  And while the person who buys the boots at a garage sale to get the retail back from the company likely happened and did in fact cost the company money, it is possible that these stories also encouraged people to shop there who were likely never going to return anything — like my bomber jacket.

So what does this all mean?  For over 100 years, L.L. Bean chose their own path and set out their own identity.  While retailers and manufacturers were stepping back from guarantees and warranties, L.L. Bean defiantly asserted that their opinion of their goods AND their customers did not change.  They had as much faith in their customers as they did in the goods that they put their label on.  There were definitely people who were abusing the policy. Everyone knew that, but the numbers were very small, and are likely still so.  The interesting part of this story is that bad actors have driven L.L. Bean into a new customer service model.  These bad actors forced the hand of a company that put the customer first and foremost.  Now, the customer is viewed in a different light.

In our libraries, we deal with the same situations.  We set up rules about how long books can circulate and what to do when the items are not returned.  We establish limits on the number of items people can download or how long they can work on our public terminals.  Part of this is a means of ensuring that we enable equal access to as broad a group in our community as we can. But part of these policies remain more traditional and restrictive than what we might need.  As we look at our services and the limits we put on users, we should be careful that we do not set up policies that protect ourselves at the cost of our community members. One very interesting study was from Duane Wilson, Cynthia Frazier and Diana Harter of the Harold B. Lee Library at Brigham Young University.  They were assessing their circulation policies and decided to explore what other comparably sized ARL Libraries were doing.  They wrote, “After evaluating the results from this study and other internal studies, the Harold B. Lee Library decided to adopt some non-traditional circulation policies in order to better serve the needs of its patrons.”10

They further added two excellent points in their conclusions.  First, “As circulation continues to decrease in academic libraries, updating circulation policies to provide a stronger patron focus can build good will and encourage patrons to use library materials.”11  They go on to say: “The non-traditional methods tend to be more liberal and to provide materials to patrons with fewer constraints.  The libraries who use these methods report higher patron satisfaction and no additional problems with the return and preservation of their materials.  It is time for libraries to more seriously examine their circulation policies and determine if they can better meet the needs of their patrons through more generous policies.”  So instead of being more traditional and restrictive, we should be more liberal and flexible with our users. There will be people who abuse our policies and game these systems we set.  There always are. But our rules say a great deal about our institutions and what we believe in. So we can send the wrong message when our policies can be viewed as ones that solely thwart these bad actors rather than support the majority of the users who have no ill intent.  It is clear to me that if L.L. Bean took this approach, they would not have changed a thing.  

 

Corey Seeman is the Director, Kresge Library Services at the Ross School of Business at the University of Michigan, Ann Arbor.  He is also the new editor for this column that intends to provide an eclectic exploration of business and management topics relative to the intersection of publishing, librarianship and the information industry.  No business degree required! He may be reached at <[email protected]> or via twitter at @cseeman.

Endnotes

  1.  Lilo & Stitch (2002): Quotes: https://www.imdb.com/title/tt0275847/quotes retrieved May 17, 2018.
  2.  Check out this article from FiveThirtyEight, https://fivethirtyeight.com/features/the-five-types-of-nicolas-cage-movies/.
  3.  Roberts, S. (2015, Sep 04).  Leon A. Gorman, 80, L.L. Bean chief, dies. New York Times. Retrieved from http://libproxy.bus.umich.edu/login?url=https://search.proquest.com/docview/1709343606?accountid=34476.
  4.  Stephen M. (Steve) Fuller, SVP and CMO, L.L. Bean (2015).  San Francisco: Boardroom Insiders, Inc.  Retrieved from http://libproxy.bus.umich.edu/login?url=https://search.proquest.com/docview/1776433025?accountid=34476.
  5.  Here I am wearing it in January 2015 — and a friend, https://flic.kr/p/qxrxnR.
  6.  You can see the text on their facebook page (along with comments): https://www.facebook.com/llbean/posts/10155636619902415.
  7.  Nanos, J. (2018, Feb 09).  L.L. Bean dropping its unlimited returns policy. Boston Globe (Online) Retrieved from http://libproxy.bus.umich.edu/login?url=https://search.proquest.com/docview/2002015169?accountid=34476.
  8.  National Retail Federation.  2015 Consumer Returns in the Retail Industry, p.3.  Retrieves from https://nrf.com/sites/default/files/Images/Media%20Center/NRF%20Retail%20Return%20Fraud%20Final_0.pdf.
  9.  Nanos, J. (2018, Feb 09).
  10.  Wilson, D., Frazier, C., & Harter, D. (2015).  Circulation policies in major academic libraries.  The Journal of Academic Librarianship, 41(6), 798-803.
  11.  Ibid.

 

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