Restocking Fees, 30-Day Free Trials


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You are really curious about that $25k amp. The online dealer will send it to you on a trial basis with a 15% 'restocking' fee if you decide not to keep it. $3750 gone...if you decide to send it back.

Do you think there should be a cap on restocking fees? Say for up to $25k in equipment, the maximum restocking fee is $1,000? Or, say a flat %5 fee across the board with the buyer paying shipping both ways?

It seems it would be more profitable just to send equipment out on a trial basis and hope it comes back.

What do you think is a fair way or fair fee to let audiophiles try out internet purchases?
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A 30 day return home trial offer......

How do you know the amp you are buying "as new" has not been sent out as new before, or a couple of times before you?

In the case of the dealer in question here I would hope any equipment returned would not be resold as new but would be sold as used and discounted the 15% + at least an additional 5% to 10%.

If the dealer is honest about the resale of a returned piece of equipment how does the manufactures warranty work?

Maybe the dealer resales the returned item as a in home demoed unit.....
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With shipping costs and the real danger of damage when shipped and returned, it is a fools errand.
The OP's post is a perfect demonstration of how "audiophiles" are driving audio dealers out of business.
I can't agree with Br3098 that this is what is driving audio dealers out of business. The marketplace has certainly changed with the advent of the internet, and dealers are going to have to adjust to that. Many audiophiles are also stuck in a town or city where they cannot audition the gear that they are most interested in locally.

But in response to the OP's question, the return policy and possible restocking fee should be up to a dealer to determine based on the dealers' calculations of the potential financial gain and loss from these policies.

A returned product can no longer be sold as new, so the restocking fee can help the dealer take less of a loss for a returned item. Also, a restocking fee may separate the more likely buyers from gear swappers who just want to try something different out.

On the other hand, other dealers seem to have decided that not having a restocking fee will potentially attract more buyers to their business, and that makes up for the likely higher number of returns from buyers who are only out the cost of shipping.
The OP's post is a perfect demonstration of how "audiophiles" are driving audio dealers out of business.
03-02-13: Br3098
Br3098,

I assume you mean B&M dealers....

There is only one Hi-End B&M dealer left in my area.
His policy, and always has been his policy, you buy it you own it.

If you are serious about buying a piece of equipment and want to hear how it sounds in your home, connected to your system, the dealer will allow the customer to take home an in store demo unit for a few days.

The dealer asks what do dealers do with a returned item? Resale the item as new? Resale the item as used?

I guess a dealer that accepts returns, especially an online dealer, has a returned item section on his web page where buyers can buy returned equipment at a used price..... Surely online dealers don't resale returned equipment as new......

It would be fraudulent to sell a returned item as new. Could the dealer lie about it? Sure. But anyone can lie about anything.

Usually I suspect what happens is the dealer sells a returned item as a demo unit. You see a number of dealer ads selling demo items.

Is a 15% restocking fee reasonable versus an arbitrary cap? From the dealer point of view, absolutely. A new $25K preamp will not sell for $24K used or demo. It's going to be much less than that. Oh, say at least 15% less, and probably worse.

If you believe the dealer is above board and would not sell a used item as new, then you should also believe that a percentage based restocking fee is reasonable.

Some dealers and manufacturers have a restocking fee and others don't. If you personally do not want to do business with those that do, well, it's a free country.
I would prefer to take a dealers demo home for a weekend then buy a new peice of equipment for a 30 day in home trial. It takes longer than 30 days for equipment to break in properly. I figure the dealer demo is well broken in and is a true representation of what my system will sound like over time. You cannot underestimate the advantage of a brick and mortar store in the decision making of a good and balanced system.
Forgot 15% restocking charge is not a FREE 30 day in home trial by any means.
True. It isn't a free trial. But are these being advertised as "free home trials" or just as having "a 30 day return period" etc.? But also not a biggie how they decide to phrase it, unless the buyer is not clear that there is a restocking fee.
If we think as a seller, restocking fees its a way to protect them. @Wilsynet point makes sense.
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Another option for dealers is to specify one or two units that they use specifically for trials only. Charge a 10% fee if the guy does not buy a new unit. If the unit goes out on trial ten times in a year...he's just sold a new unit and he still has his trial unit. Even with a trial unit, he should be able to sell it for 50% off list after he's collected several trial fees off of the unit....and still make a profit.

The bottom line here is, buyers do want to hear the unit before they buy it. Sellers have to figure out a way to get the unit into the hands of serious buyers.

Right now there is a large contingent of audiophiles that wait a couple of years until the flagship drops to 60% or 70% off of the new asking price...if they like the unit, they keep it. If they don't like it they can easily put it back on the market with little or no loss.

There has to be a middle ground that's equitable where the buyer and seller are protected.

Paying $25k for a new amp to find out that it's not your cuppa tea scares the hell out of me.
Do you think there should be a cap on restocking fees? Say for up to $25k in equipment, the maximum restocking fee is $1,000? Or, say a flat %5 fee across the board with the buyer paying shipping both ways?
No! No! No!

It seems it would be more profitable just to send equipment out on a trial basis and hope it comes back.
No! High risk of damage, misused and possible hassle getting it back. You said it, HOPE!

Like they say, when you drive the car off the lot, it depreciates 20% to 30%. Too bad audio gear don't have an odometer.

Most companies on the WWW don't stock anything but just take your order and the component is drop ship from the manufacturer. This is the major reason they can sell at a discount with virtually ZERO overhead.

What do you think is a fair way or fair fee to let audiophiles try out internet purchases?
If used, find a local seller where you can demo before purchase. If new and plan to shop for best price on WWW, attend audio shows. I think one major reason with increasing # of audio shows is to compensate for loss of BM.

Depending on price of the component, some companies will deduct the cost of travel to their facility from the purchasing price for a demo.
Another option for dealers is to specify one or two units that they use specifically for trials only. Charge a 10% fee if the guy does not buy a new unit. If the unit goes out on trial ten times in a year...he's just sold a new unit and he still has his trial unit. Even with a trial unit, he should be able to sell it for 50% off list after he's collected several trial fees off of the unit....and still make a profit.
I'm not sure the math adds up. For a dealer to make a living he'd need to move a certain amount of product. So he would either need more than 1 or 2 demo units, or he would need a larger percentage of sales to be sight unseen.
And if a unit made 20 trips vis UPS or whatever carrier (10 there, 10 back), I suspect there's a good chance it will be pretty beat up.
But I do agree buyers will want to hear the unit first, no doubt.
"Restocking fee" done on a % of sales price does not make sense to me. It cost the same to re-stock a similar sized amp for example whether it costs $500 or $50000.

The reasonable approach is to have the customer cover the actual or reasonable cost of shipping and handling for an in home eval. Also with an agreement that equipment must be returned in condition clearly identified by the seller up front. That way, expenses incurred are absorbed fairly if all is done as it should be. It's not much different from returning an item to a store, except now there are specific shipping and handing charges that must be addressed.
03-05-13: Mapman
"Restocking fee" done on a % of sales price does not make sense to me. It cost the same to re-stock a similar sized amp for example whether it costs $500 or $50000.

You are missing the point. The online dealer may be calling the charge a restocking fee, but, if the guy is honest and doesn't try to resale the equipment as new, he is using the fee to offset the cost to resale the unit as used, open box, demo, or what ever the dealer wants to call it.

Would you pay $25K for an amp that somebody had in their home before you? Or would you demand a new unopened factory fresh sealed unit?

A little background on pricing. The cost a dealer pays most of the time to the manufacture/Distributor for a Hi-end piece of equipment is 60% of the manufactures retail set price.

So using your $25K priced Amp the dealer will pay, up front before delivery from the manufacture, $15K + shipping....

I can hear you now.... 40% PROFIT!

Well first are you going to pay the dealer $25K for the amp? Maybe things have been slow and the dealer discounts the amp to you 10% off.

30% profit WOW!

Well that might be if the dealer is running the business out of his basement of his home and has a full time job doing something else. Even then I would bet the guy has a line of credit with a bank and will borrow the money from the bank + interest to buy the amp.

But I doubt that is the case. Would you buy a $25K amp from a guy that operates out of his basement?

If the dealer has a store front he has overhead costs.
Rent.
Utilities.
Phone, Yellow page buisness ad.
Internet hookup.
Advertising costs.
Insurance costs.
Any employees? Costs, costs, costs...
Showroom inventory?
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Deduct overhead costs from the 30%
Jea,

Makes sense. But isn't there a difference when one buys direct from the maker via Internet? If I return something for whatever reason, and the maker tests it out and confirms it functioning like new before reselling? I could see whatever that costs as being baked into the "restocking fee" I suppose. The actual cost might vary for say speakers versus amp versus DAC, etc.
But isn't there a difference when one buys direct from the maker via Internet? If I return something for whatever reason, and the maker tests it out and confirms it functioning like new before reselling?

Is the equipment then resold as "B" stock? Discounted "B" stock price?

New is new....

Back in the 1970s I bought a new Nak cassette deck from a B&M dealer, paid full price. Factory fresh.

Got the thing home took it out of the box hooked it, played with it for a while and then, LOL, sat down to look through the owners manual.

To my surprise a salesperson's business card, one of the dealers employees, was stuck between two pages......
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"Is the equipment then resold as "B" stock? Discounted "B" stock price?"

No, because the maker has certified it as functionally "new".

If cosmetic defects or other issues would remain, I would expect so then.

I just think things are a little different when buying direct from teh maker than via a middleman, which is probably why that seems to be the direction things are heading these days.