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 The 100% Guarantee: Smart Move or Risky Business?  
The 100% Guarantee: Smart Move or Risky Business?

For my birthday my parents gave me a $75 gift certificate for REI. I also had $38 on my membership card from points I had built up on previous purchases. So I was armed with $113 to blow at my favorite store. It was going to be a fun day.

Nothing, however, would prepare me for what happened next. I am rather proud to say that in all my years I have never experienced what I have heard referred to as a “shopping high”. But on this day, on this sweet and glorious day, I truly would learn what it meant to feel victorious while walking out of a retail store.

I was going to REI to buy a new pair of hiking boots. I bought a pair in 2005 from REI that I had worn a hole in after only using them on two backpacking trips. I was a little frustrated about that, but I did not feel like I was in the position to complain because on my trips I frequently log 45-60 miles of hiking, often over terrain that would test the sturdiest of footwear.

I was looking over the available boots and had zeroed in on a few pairs I wanted to check out. The helpful clerk came up to me and we started a conversation. I told him why I was there and slipped in the fact that I had previously bought a pair of boots that had worn through after only two trips. I wasn’t expecting anything out of it; I just wanted to let him know that so he was aware of my need for something very sturdy and reliable. That is when things got interesting.

“Are you a member?” he asked, as if I was missing something big.

“Well, yeah,” I replied.

“Everything we sell to members is 100 percent guaranteed,” he said shaking his head in a serious manner. “If you aren’t satisfied with the product you should bring it back.”

”I bought the boots two years ago,” I said, emphatically, but I was somewhat dumbfounded. I was really trying to give the guy an out.

“Doesn’t matter,” he replied. “We look after our members. Everything here is 100 percent guaranteed.”

He advised that I come back with the defective product and get a full refund. This idea seemed beyond outlandish to me, but I wasn’t about to argue with the guy. I went home and returned with the boots in hand, ready for my full refund.

Was I taking advantage of REI? Maybe, but, on reflection, not really, because the staff at the store almost seemed to encourage my relaying my problem with the boots. When I brought in the boots the only question asked was “are you not satisfied with the product?”

REI exchanged the defective pair for a new pair right on the spot—for an almost two-year-old purchase!

As happy as I was I couldn’t help but question whether or not this was a smart business move by REI. As a consumer, I’m tickled, but how long can this model sustain itself?

A quick Internet search for “100 Percent Guarantee Business Plan” yields a lot of information, but what I found most interesting is that some marketing gurus claim that it will double or triple a business’s return.

Many businesses, especially small ones, don’t offer a 100 percent guarantee because they see it as not only as cost-inefficient but more importantly as potential profit killer.

While that of course would be any natural concern, this may in fact happen anyway if a business doesn’t guarantee its product.

Think about it—if consumers can choose whether to buy from a company that guarantees its product or another company that does no such thing, which one will they almost certainly buy from?

It’s an obvious answer: They will buy from company that protects them as a consumer. While the consumer feels protected, the business is also sending a message. It is confident and it believes in its product.

It may be a scary step to take for some businesses and some will lose battles along the way. (Despite the classic business mantra that the customer is always right, this model really puts businesses at their mercy).

However, even if customers are upset with the product, the odds are they will come back because they feel safe.

I originally wanted to title this piece “REI—The Greatest Store Ever!” but I figure that would be taking things just a bit too far.

After all, I’m a journalist, not the flack for REI.

But for those of you keeping score at home, I just wrote 800 words about how great REI is. How much is that worth in PR?

“Shoeless” Mark Thomton is news editor of The Business Ledger, not a spokesman for REI, no matter how many miles he walks in its shoes. Contact him at Mthomton@thebusinessledger.com or at 630-428-8788.


Posted on Monday, June 18, 2007 (Archive on Monday, June 25, 2007)
Posted by mthomton  Contributed by mthomton
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