Crafts Report: CraftsRetailer

Illustration by Larry Knox

Only a small percentage of your customers are likely to return a purchase. But they can be a troublesome and expensive group. Cash refunds can be a financial drain. Merchandise that has been used or damaged cannot be resold. And an item purchased months ago and returned may not be easy to sell again. You want to keep your customers happy, but you don’t want to give away the store. Where do you draw the line?

Return policies vary from strict to liberal, depending in part on geography, the customer base, and whether the gallery operates primarily on a purchase or consignment basis. Store policy at Trilogy Gallery in Nashville, Ind., allows for a full cash refund within seven days, with exchange or store credit between seven and 30 days. After 30 days, the gallery charges a 20 percent restocking fee. “We’ve only charged that once,” admits owner P. Grant Stuart. “You have to make us really mad for us to charge for restocking.”

The Hudson Valley Arts Center allows a two-week period for exchange or store credit, says co-owner Peter Marotta. For purchases made during the holiday season, that two-week period starts after the first of the year.

At Millennium Arts Gallery in Sebastopol, Calif., the no-returns policy is clearly stated on sales slips. “We’re a consignment shop,” notes co-owner Dayla Greenfield, “and once we’ve paid the artist, we can’t ask for the money back. When we explain that to our customers, they have no problems with the policy.”

At the other end of the spectrum, owner Nancy Jo Dillman of Cornerstone Gallery in Baraboo, Wis., says, “We take [returns] under all conditions.” Sales slips state “no refunds after 30 days,” and Dillman encourages exchanges or store credit after that period, but will give a cash refund if the customer requests it.

Dashka Roth Contemporary Jewelry & Judaica in New Orleans used to have a return policy of store credit only. “But I’m in a tourist area, and I’ll miss the sale if I do that,” explains owner Dashka Roth. “So now I tell them, ‘Go ahead and try it, and see if your wife likes it.’”
However, customers sometimes abuse that privilege, says Roth. “I sometimes get a return on something someone has had for years, and it looks like it was run over by a truck. I have to tell them that’s not acceptable.”

Most galleries welcome special orders. Requiring an upfront deposit makes it less likely that the customer will change her mind after the order has been placed.

The Hudson Valley Arts Center handles many special orders including jewelry, fiber art, home furnishings and sculpture. “We get everything in writing detailing specifications of the order, including the nature and quality of the work, and the time frame, and verify it with the artist,” explains Marotta. “Then we ask for a commitment from the customer and a 50 percent deposit.”

Special orders make up 40 percent of Trilogy Gallery’s business, and a 50 percent deposit is required. “Once in a while we get a request to cancel the order, usually in cases of automobile accidents or divorces, and unless it’s a special-made piece, we’re willing to give a refund,” says Stuart.
“We take the customer’s credit card number for special orders,” notes Nancy Beasley, manager of Rare Things in Creede, Colo. “But we don’t run the charge until we ship the piece out.”

“If it’s an established client, we don’t take a deposit,” says Dianne Sorrentino of Dianne’s Gallery of Jewelry and Fine Gifts, in Vernon, Conn. “For others, we take 50 percent. And special orders are not returnable.”

“I used to take a 50 percent deposit on special orders,” says Roth. “But when I got married eight years ago, I bought a wedding dress, which was a special order. I had to pay for it in full before the store would order it, and I thought, ‘Now that’s a good idea.’ I’ve been requiring upfront payment in full for special orders ever since. It’s so simple, and it eliminates special bookkeeping.”

Sometimes a customer really likes an item but isn’t sure it will work in her home. Often, the only way to make the sale is to let her take it home and try it. “Most of our customers drive from 30 to 90 minutes to get to our gallery,” notes Stuart. “They can’t conveniently bring an item back the next day, so we predetermine a date when they can bring it back for a full refund. Ninety-eight percent don’t bring the item back.”

“If it’s a decorative piece, we encourage customers to take it home and live with it a while,” explains Sorrentino. “We let them keep it up to a week. If it’s jewelry, we allow 24 to 48 hours.”

“I just let a member of a synagogue committee take a piece of Judaica out on approval,” says Roth. “The entire committee has to decide on the purchase. I didn’t ask for a deposit or credit card. I know these people; I’m part of the community.” While Roth’s policy is more lenient than most, it is an example of knowing your customers and working with them to make the sale.

You can’t prevent all misunderstandings with customers, but you can keep them to a minimum by following a few simple rules of thumb:

• set and clearly communicate reasonable policies;
• make sure your sales slips include your return policy;
• have customers sign agreements that spell out your terms for special orders; and
• specify in writing return dates for on-approval purchases.

Having clearly set policies doesn’t mean you won’t occasionally make exceptions for special customers. But when you do choose to waive the policy, your customer will know she’s getting special treatment — and that’s a great way to build customer loyalty.