Pelco's Shipping and Return GuaranteesBy Brian Rhodes, Published on Aug 09, 2012
Will making returns easy and guaranteeing stock draw integrators to Pelco? The company thinks so, and they have leveraged the idea into a recently announced Product Shipping/Return Guarantee. In this note, we examine this policy's value and see how it stacks against competitors.
Today, customers can be more demanding about quick turn-around. Ten years ago, if a manufacturer's item was out of stock or backordered, it forced the buyer to renegotiate an installation or maintenance deadline. Now, if an item is backordered, the initial order is cancelled and alternative sources are sought. At best, the buyer finds another source to buy from, or at worst finds a competitive product from a different manufacturer to meet the need.
Pelco Policy Overview
Pelco lays out the policy on their website, with two major claims:
- "24-Hour Out-The-Door Shipping": Pelco items appearing on an Approved Stocking List [link no longer available] are guaranteed to ship within one business day, or Pelco "pays ground freight shipping" within the US, and for our Canadian customers we will provide a 2.5% rebate."
- "90-Day No Questions Asked Returns": Any new or used Pelco item can be returned within 90 days of initial purchase with no restocking fee.
How will Pelco handle situation where 'out of stock' parts are needed more urgently than 'free ground shipping' provides?: "Pelco's standard policies will still determine how we treat special requests for shipping. This new 24-Hour Out-the-Door promise for our ASL list of products provides for Ground Shipment if we miss our promised ship date. That is the policy as it relates to this program. If customers wish to request expedited shipping, we will charge our customary rates for those expedited shipments."
Will Pelco issue me a credit or cash refund on returned product?: "For customers that buy Pelco product directly from us, we will issue a credit in the case of a return. For customers who purchase from a Distributor and who have a need to return a Pelco product to their distributor as part of the “90-Days No questions asked” policy, the Distributor will provide a credit to the customer, and Pelco will in turn provide a credit to the Distributor when they return the product to us."
If an integrator buys through a distributor instead of directly through Pelco, does the practical benefit or impact of 24/90 change?: "The benefits of the 24/90 policies are much the same for all customers, direct or indirect. With the new 90 policy we have extended the “No Questions Asked” way of doing business to our Strategic Distribution Partners as well. A Distributor has the same opportunity to extend our “No Questions Asked” policy to their customers when product is shipped from their inventory. We thus are able to provide the same benefits to all customers regardless of their point of purchase."
Other Manufacturer Policies Compared
Unlike Pelco, most manufacturers have significantly shorter return policies and no formalized commitments for next day shipping. Additionally, typically manufacturers require some prior approval or RMA to accept returns. Here is a short review of relevant formal policies from manufacturers:
Axis: Any product determined faulty within 30 days is entitled to new product replacement with valid RMA. Advanced replacement products are shipped within 24 hours when inventory is available. Axis supports an 'Open Box' return policy for Channel Partners where uninstalled, opened product can be returned with a 10% fee up to a maximum of $250. The product must have been sold to an Axis Channel Partner, be in “Like New” condition and be returned within 90 days.
Arecont Vision: If a camera is determined to be "Bad" within 30 days, it will be exchanged for a new camera. Cameras beyond the 30 day period, but still within Warranty period are able to be exchanged for refurbished cameras, but not credit or refund. Product returns are not addressed by the manufacturer outside of the RMA process.
ACTi: Faulty product is eligible 30 day product return with RMA for sales credit from manufacturer, but returns are subject to distributor's policies. After 30 days, product is subject to Warranty process with varying costs to repair or exchange product. Advanced replacement is available with prior approvals and is subject to product stock levels.
While no manufacturer we checked had a formal stocking guarantee, most featured 'advanced replacement' policies for equipment currently in inventory. We were unable to find other manufacturer's 'stocking list'.
Written Policies Vs Actual Practice
When speaking with other manufacturers, they emphasized that, in practice, they frequently, if not regularly achieved similar shipping and return objectives as the Pelco policies. Of course, this is at their discretion and may be more frequently approved for larger partners, those who complain louder, etc.
Pelco's Policy Analyzed
Overall, a formalized written policy helps to eliminate surprises or favoritism while providing a powerful signaling effect for branding / marketing. However, the policies themselves are mixed:
Inventory Guarantee is Weak: Despite the assurance, Pelco's self-imposed penalty for missing 24 hour delivery is weak with only a relatively trivial payment / penalty (covering ground shipping). If Pelco fails to support inventory levels, the integrator may face a significant logistical problem with just a few dollar discount to show for it. If Pelco is truly committed to this, they should put (more) money behind this to truly compensate the integrator for resulting problems.
Returns Policy is Strong: Pelco's acceptance of any return, for any reason for a full 90 days after purchase is broadly accommodating compared to other competitors. No other manufacturers we checked had a written policy that matched both the length and 'no hassle' guarantee of Pelco. Several manufacturers commented to us their formal returns policies are subject to 'internal discretion' and considered on a case by case basis. Other manufacturers state that returns decisions are frequently made in the best interest of the integrator/customer. However Pelco's written statement takes individual assessment and judgement out of the equation, and flatly defines the company's return terms.
The 'old' Pelco was clearly known for its customer service and support. Since the Schneider acquisition this reputation has faded. This policy should help restore some of that and may motivate rivals to match, which would be good for the entire industry.