I need a 150-word response to the following forum post made by my peer in my marketing class (at least one reference and it needs to be positive):

Corporate decisions always have Customer Impact

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In the grocery store case, the management is making a mistake. Granted, the refund policy could save the store $500,000 per year but also exposes the location to lost revenue and adversely affect customer loyalty at the expense of a $50 per year possible credit.  Since the average customer at the store generates a $2500 profit over their five year life cycle an impact of $250 over the same period would have damaging effects in lost and disgruntled customers. 

The marketing group would definitely need to be involved to package the paradigm shift to keep existing customers as well as assure loyal customers that the store would continue to offer the same great service and wonderful products. The marketing department should not emphasize the elimination of their refund program rather continue to market the stores strengths to overcome any perceived issues caused by the creation of the new policy.

There are numerous implications and ramifications in respect to the customers. For example if there is a manufacturer recall, the store is obligated to refund the customer. Additionally since refunds to grocery stores are so sporadic, dive deeper into the causes of the refund expense as well as the people demanding refunds from the store.  Investigation might determine that there is are poor stocking issues which distributes products beyond their expiration dates or there are customers out there gaming the system. If customers have received bad product from the store a good corporate citizen would want to return the bad product to the store for a full refund. If the store refuses then there could be catastrophic implications in the form of a lawsuit or worse, bad publicity.

Finally, the savings calculations based on eliminating the refunds assumes that every customer has a refund. When was the last time you returned anything to the supermarket? As an average shopper I can attest that I have only asked my supermarket for a refund maybe once in my life for something far less than $50.

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