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[ The PC Guide | The PC Buyer's Guide | Understanding PC Sources, Vendors and Prices | Vendor Evaluation Factors | Guarantees and Return Policies ]

Restocking Fees-A Balanced Look

Under certain conditions, some companies will accept a return on a product, but will only refund a portion of the price you paid for it. A percentage of the price, usually between 10% and 20%, will be forfeited to what is commonly called a restocking fee. These fees normally apply to items returned only, not exchanged due to defects for example.

These restocking fees are hated by customers and much reviled by most who discuss buying issues and selecting vendors. And I agree that it's certainly simpler to just buy from companies that do not have restocking fees. At the same time, I think restocking fees have been overly derided. Since I have a history of taking controversial stands, I will continue it here in presenting what I hope is a more balanced look at the subject. At least, I want to explain what the purpose of restocking fees is supposed to be. In my view, restocking fees are not only not "pure evil" but they are in fact something I would expect a reasonable and honest vendor to charge in some circumstances.

(Heresy! Am I suggesting that I would try to find a vendor that charges restocking fees?! No, I am not saying that. What I am saying is that there are legitimate reasons under which you should expect to pay a restocking fee, and utterly dismissing all vendors that ever charge them is simplistic.)

Why do many honest companies charge restocking fees? The reason is simple: to keep costs (and thus prices) down when dealing with the return of items that are not defective. There are a lot of costs associated with processing an order. If you buy something and then return it, the company has to deal with more costs to handle the return.

Worse, the company is in many cases stuck with a product that cannot be sold as new any more. Do you want to buy a product that is supposed to be new and instead receive a box that has been opened and a product used by another customer? I certainly don't. If I buy a new notebook PC, I expect it to be new.

But what if I order a new notebook and then decide to return it because I realize it wasn't the one I wanted, or it doesn't fit my briefcase, I don't like its color, or for any of a thousand other reasons? If so, the vendor returns my money, but ends up with nothing, in exchange for what could be hundreds of dollars of losses. They then have a notebook that has my fingerprints all over it, with a hard drive that I may have mussed with (almost certainly :^) ). They will have to send it back to the manufacturer, who will then also have to eat costs to return it to saleable condition. The question is: who should pay for all this cost?

Restocking fees are a statement by the company that they feel the person who decides to return a non-defective item should pay for these costs. And I personally think this is perfectly fair, as long as restocking fees are only charged in cases where I return an item due to my making a bad buying decision. I don't expect anyone else to pay for my mistakes.

Now some people will say that returns are a cost of doing business, and the company should just absorb them and deal with it. And that's fine, many companies do exactly that. Just realize that TANSTAAFL. Companies don't "absorb" costs, they pass them on. When you buy from a company that has no restocking fees, you pay for any frivolous returns that company handles, indirectly, through higher prices.

The bottom line is that you should not summarily dismiss a company solely on the basis of charging restocking fees, but rather, find out the conditions under which a company will try to charge them. Even the most reputable of smaller vendors will charge restocking fees for the return of some non-defective items, because if they do not, they cannot offer competitive prices.

Note: Companies that don't charge restocking fees on most of their products, even if returned for no particular reason,  will often charge them on products that involve consumables, such as printers. Once you have opened a printer, used its print cartridge, and gotten ink and dirt in the mechanisms, it cannot be resold without being cleaned, which costs money. Again, this seems perfectly reasonable to me.

Of course, not all companies are reasonable about charging restocking fees. If I buy an item at a retail store and then return it a day later in perfectly saleable condition, it's hard to argue that a restocking charge should apply, yet some stores will try to do this (losing my business forevermore in the process). Worse, some seem to use them primarily as a club to discourage returns even when the vendor has sent the wrong product, or the item is defective, or they have overcharged. These are the companies that you want to avoid. See this discussion of inappropriate restocking fees for more.

Next: Warranty Service and Warranty Policies

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