Lululemon's Strict Return Policy Has Created A Huge Black Market

Business Insider

By lululemonathletica on Flickr

Lululemon has one of the strictest return policies of any major chain. 

The yoga-wear retailer doesn't allow any returns after 14 days, even on gifts. And even if you do bring the item back in that time it has to be in mint condition with tags intact. 

Customers have responded by taking to online forums to complain. But longtime Lululemon shoppers have a tip: sell it on eBay

Sure enough, an eBay search reveals thousands of Lululemon items, some new, some used, being sold at close to full-price. 

Lululemon's CEO, Christine Day, told The Wall Street Journal that this policy helped the brand to sell 95 percent of its product at full price by creating the concept of scarcity. 

"We aren't Nordstrom," Day told the WSJ. "We aren't your personal shopper."

The policy allows Lululemon to have more cash available and keeps employees from getting bogged down, analyst Brian Sozzi at NBG Productions told us. The retailer is also "constantly bringing in new products," so a lax return policy would mean that many clothes would be out of place. 

While this strategy might work in the short-term, there's a possibility that the plethora of items available on eBay could devalue the brand. 

"Along with that underground market for basically new goods that undercut products in the store price-wise, they are also cultivating a pool of unhappy yoga-goers," Sozzi said. 

Take this Yelp review of a customer who said the return policy meant she wouldn't be going back: 

"Lululemon- when you wrong a customer and misinform them, it's your job to make it right. Shame on you. You have lost a customer and many future purchases for failing to simply take back the pant so I can purchase the one I originally wanted but was told, incorrectly by your salesperson, doesn't exist. I will be sure to give Lululemon top prize whenever the topic of horrendous customer service comes up." 

Lululemon could alter its strict return policy and still make great returns. More importantly, this would lead to happier customers and better business down the road. 

DON'T MISS: Retailers Are Investing In The Wrong Form Of Customer Service >

More From Business Insider

Rates

View Comments (0)