Best Buy’s Dropping Restocking Fees Eliminates Sore Point with Customers

Best Buy dropped most restocking fees, eliminating a sore point with customers. The action comes as the company increasingly uses service offerings to combat Wal-Mart’s and Target’s deep discounting, analysts said.

The retailer will maintain a 25 percent restocking fee on special order items. But the 15 percent and 10 percent fees that applied to returned CE goods and iPhones were dropped effective Dec. 18. Best Buy is offering a refund on restocking fees on items returned Nov. 17-Dec. 18. The fee was typically a percentage of the price refunded.

Best Buy increasingly views Wal-Mart and Target as its main competition for CE sales, industry officials said. Wal-Mart and Target don’t have restocking fees, and with demise of Circuit City in 2009, Best Buy found itself alone among national chains in charging them, industry officials said. “It’s probably not a big economic driver for them, but it infuriates customers that you could lose forever,” said David Strasser, a retail analyst at Janney Montgomery Scott. “They are just realizing that they have to be a solution-driven place and they have to differentiate on customer satisfaction,” and restocking fees aren’t “consistent with that."

Best Buy ended the fee after reporting a decline in Q3 sales. Dropping the restocking probably won’t have an immediate effect, but “you will probably see it over time in not losing those customers,” Strasser said. “I think they take customer service seriously these days, and I will bet they kept seeing that comment pop up in surveys or in feedback to management from the store level."

Customers told Best Buy that “they want to give confidently this holiday season and every other day of the year -- and with that comes easier returns,” the company. For full refunds, purchases still must be returned within time limits -- 14 days for digital cameras and 30 days for TVs, a store staffer said.

Other CE retailers may be forced drop restocking fees or at least change their policies to compete with Best Buy, industry officials said. But many regional retailers we polled said they don’t plan to make changes. Systemax’s CompUSA and TigerDirect stores can charge a 15 percent restocking fee but “hardly ever charge one except in extreme circumstances,” Systemax Technology Products CEO Gilbert Fiorentino said. Brandsmart has no plans to change its policies, President Michael Perlman said. The chain typically charges a 20 percent restocking fee for products that don’t fall within its product-return guidelines.

"Things that are brought back improperly should be charged back,” Perlman said. “It’s a fine line. If someone gets an appliance or big TV, you know it’s coming back without a box and you don’t hammer them for that. But if somebody comes back with a small camera, it should come back” with everything.