Monday, February 27, 2012

Return To Sender: E-Book Return Policies

One of the most archaic practices in the publishing industry is the returns policy that allows booksellers to purchase inventory that can be returned for full purchase price within, well, just about any timeframe. While originally a good idea to boost a flagging industry for the short term, keeping it instilled for the long term, especially when current technology bases forecasting and inventory management more on science than hope, is just perplexing at best and ludicrous at worst.

But this post isn't about the traditional returns policy at the business-to-business level. It's about the returns policy and behavior at the business-to-consumer level. For ebooks.

Most brick-and-mortar stores have a fairly liberal return policy. After all, if a customer returns a physical book for any reason, if the store can't sell that copy to someone else, they can simply return it to the publisher for a full refund.

But what about online retailers and ebooks?

Interestingly, the two biggest online retailers -- Amazon and Barnes & Noble -- have quite divergent policies regarding returns.

One of the consistent complaints with B&N seems to be how difficult it is, if not impossible, to return an ebook through their online store.

In contrast, Amazon's return policy is so lenient unscrupulous customers can have a field day buying, reading and returning books without ever actually spending money to subsidize their reading habits. In essence, Amazon lets a customer return an ebook for any reason within 7 days of purchase for a full refund.

B&N's draconian policy nips any thought of unscrupulous practices right in the proverbial bud. But what about legitimate reasons for wanting a return?

  • Formatting: For instance, weird spacing between words, paragraphs that all run together, various type sizes -- and none of it intentional 
  • Copy Editing: The book has more than a tolerable number of errors and/or the writing is juvenile
  • Subject Matter: A reader picks up what appears to be a sweet romance, for example, and it turns out to be, um, not so sweet
  • The Enjoyment Factor: This one is completely subjective. It can be argued a reader who samples should be able to tell whether or not they'll enjoy the full story and that a return based on whether a reader liked a book or not isn't a legitimate reason to return a book. Technology allows Amazon to know how much of the book a specific reader has paged through. If a reader has finished a book, do you think Amazon should refund their money? If not, after what percent read should the money NOT be refunded? 25%? 50%? 75%?

Newbies who've just published with Amazon are often surprised to see those first returns show up on their statements. In the days before December 2011, the return rate averaged about 1-2%, even for a well-formatted, well-proofread book that delivered the same story promised in the blurb. Since December, return rates have shot up, mainly for books in the KDP Select program. Authors are even seeing high returns on FREE books. Let's look at why lovely readers who wouldn't think to exploit any loopholes in the system might return a book at Amazon.

All Books

  • A percentage of readers may have a legitimate complaint about the formatting, copy editing or bait-and-switch subject of a book. These are issues the author has complete control over.
  • A percentage of readers may not get the perceived enjoyment from a book. These are the returns that hurt authors most. Was my story really that bad? Did the reader just not connect with my voice or writing style? If sales are strong, then while these returns sting, there really isn't much the author can do to please everyone.
  • For books that pass the technical tests and the likability factor, Amazon gives us 1-click ordering that can play havoc with our return rates. Oops, I meant to send a sample to my Kindle, not actually buy it is a fairly common complaint. Not much an author can do about an accidental purchase except hope that sale that shows up a few minutes later is from the same customer who sampled it then decided to purchase it.

Select Books

  • Amazon helpfully lets the Prime customers know a book is available for free in the Lending Library by prominently displaying a big red $0.00 price (with a tiny little disclaimer) that overwhelms the actual retail price. The majority of readers not shopping for a Prime borrow can easily be confused into thinking the book is actually free. Even though the 1-click Buy button displays the actual price, once it registers on the reader, it's often too late and they've already clicked the button. 
  • Some readers who actually want to borrow the book aren't sure how to do a borrow and accidentally buy the book rather than borrow it. Often, an author will see a sale show up on their KDP dashboard followed by a return followed by a borrow in quick succession.

Free Books

  • Some customers read a lot of free books, and some of them aren't quite sure how to delete a book off their Kindle once they're done with a book they're pretty sure they don't want to read again. So they return it to make room for more free books.
  • In addition, some readers don't take the time to sample free books when they go on a download spree. They'll hoard a day or two's worth of free books, then go through them and choose the ones that they're really interested in. The rest get returned to free up space for more free books.
  • Some readers also see a book that's been returned to the paid list advertised for free on an old email or post, click through, then don't pay attention to whether the book is actually still free or not. When they find they've been charged, they return the book.
  • Some readers may see a book they've bought within the past 7 days now offered for free. They return the purchased book and download a free copy instead. 

Seeing a lot of returns can be discouraging, but if your book is of good quality and is being enjoyed by readers leaving nice reviews, then the returns are likely happening because of factors outside your control. It might help to do the math, too, keeping in mind 1-2% is a fairly normal rate of return even if you don't factor in all the erroneous buy errors that result in returns.

For example, SECTOR C has had 30 returns this month. Ouch. It's also sold 674 copies so far this month in the US, been borrowed 87 times and has been downloaded for free 2093 times. 30 divided by 2767 (or 674 + 2093) equals 0.0108, or 1.08%. Not a bad rate after all. Whew!

So why do YOU return ebooks?


Chelsea Pitcher said...

I've never returned a book. It seems so counter-productive. I've been *really* unhappy after reading a book or two in my life, and I still didn't consider returning it. So maybe I'm not the person to ask! (ha) But at least that's my perspective. I guess if something had a huge amount of typos or something I might feel differently, but I've yet to have that experience.

Phoenix Sullivan said...

Hi Chelsea! I'm with you. I've never personally returned a book either. I've asked for my money back at the movies twice: once when the projector broke down (the theatre was refunding ticket prices anyway) and once when I walked out of a movie that was so bad I could only sit through the first 20 minutes (one of the Alan Quartermain movies where Richard Chamberlain was sleepwalking through the role). Otherwise, not so much. Of course, I have quite a few books that are TBR on my Kindle that are past the 7-day return date that I might wish I could return ;o) (though really I hope not!).

Thanks for dropping by. I haven't missed any important updates on your side, have I?

David Alastair Hayden said...

Thank you so much for this post. The 11 refunds I had on a book last month had me befuddled, and a tad worried. But I had started to notice that I would get purchases and refunds almost at the same time. I just couldn't make sense of it.