Standard practice is to establish a time limit for returns. In addition, prudence-as well as the pertinent MLM and Party Plan regulations-suggests that you have a sound basis for not accepting product which has been used or damaged (other than by shipping considerations), or is outdated or expired, and is otherwise not resalable.
The law requires that you purchase back product from a canceling distributor if the product is in resalable condition, and if the product was purchased within 90 days of the requested refund. The refund can be adjusted for as much as 10% for handling and re-stocking, less any commissions or rebates paid to the distributor returning the products. This is a standard provision that will appear in your distributor agreement and company policies and procedures. (If not, quickly get in touch with an MLM attorney specializing in our industry.)
Many companies go far beyond the minimum 90-day requirement, if for no other reasons than to (1) maintain sound standing with state and federal regulatory agencies and consumer protection bureaus, and (2) to maintain goodwill with the field and to contribute to the overall soundness of the reputation of direct selling.
On the other hand, there will always be reasons to follow your stated policies precisely-in fact, this must be the rule, rather than the exception-and a good customer service executive will know when policy administration requires a careful evaluation of when to go beyond the policies.
100% Satisfaction Guarantee
Solid companies earn the respect and confidence of their customers and distributors by guaranteeing the satisfaction of their customers and distributors. This is especially important when you consider that person-to-person marketing requires that a distributor stake his or her reputation on your ability to fulfill your promises (and sometimes the distributors’ promises!) and to take care of those who take a chance with you. Our society is geared to doing business with companies who offer no-haggle, no-hassle guarantees, interpreted by consumers to mean that the company will do what it takes to keep them happy. This is especially important in the early stages of a distributor’s efforts to attract a new customer or recruit.
The “100% Satisfaction Guarantee” is rooted in creating a safe haven for a new customer or distributor making a decision whether to take a chance on your company. It follows, therefore, that the guarantee has a short life before the stated guarantees concerning product returns and account cancellations take over. Normally, the stated policy for such a guarantee is 30 days; the life of such a guarantee, whether publicly stated or just followed internally, is ninety days. This gives a customer or new recruit ample time to have taken the chance, gotten started, and established a comfort level. Perhaps most importantly, it is a tool for your distributors who often work very hard to bring new customers and recruits to your company.
MLM and Party Plan Companies that set and enforce the time limit for returning products report the following: (a) the practice has reduced the number of returns; (b) returns are received earlier; (c) it apparently has not adversely affected sales; and (d) the company now has the option to handle late returns on a case-by-case merit basis