Chasing away your customers

[silverstaff]

This is a story that became rather notorious in the town I grew up in.

Place: Independent local department store in a small town in southern U.S.
Time: Circa 1990

This department store had been around for around a century, and was known to be "the" place to shop for clothes, shoes & jewelry for counties around.

Wal-mart had opened up in the town and had been eating into their profits, as a lot of the lower-end customers went to buy inexpensive clothing there. A new four-lane highway made access to the "big city" a lot easier so higher-end customers were going to the mall in the city. This department store facing challenges on multiple fronts. It still had a loyal core of customers, mostly middle-aged and elderly folks who had been shopping there for their entire lives.

The venerable old department store was losing money. Right before the Christmas shopping season was about to start, the owner/manager (grandson of the founder) decides to implement a new policy to save money: No more free gift wrap.

You see, for 90+ years they had a policy that if you bought something there during the Christmas season, they would gift wrap it for free. Just bring it to the service counter in the basement and present the receipt and they would box and wrap it, ribbon & bow included, for free. For some reason, this made people really enthused about doing their Christmas shopping at the department store.

So, a few days after Thanksgiving, the policy was in full swing. Many customers begrudgingly paid the gift wrap charge, but weren't happy that this longstanding policy ended. It left a lot of bitter tastes in the mouths of longtime customers who basically only went there out of loyalty, since there were other options now available.

Then the Great Old Lady came in. She was a multi-millionaire, probably the richest person in the county. She got that way because her late husband was a local tycoon a few decades ago.

She wasn't seen around town too often, she'd come to shop there periodically, and was seen occasionally around town. For 50+ years she'd always done all her Christmas shopping at the department store. So, she walked in one morning with her two assistants following her. They went from department to department buying a not-so-small fortune in high-end clothing, jewelry, shoes, ect.

Then, just like she had every years since before World War II, she went down the stairs to the service desk and requested gift wrap.

The clerk then said it would cost "X" dollars, a certain amount per item. For somebody who had already spent a high four-digit or maybe even five-digit sum that day you wouldn't think it would be a big deal.

It was. She was indignant. She insisted that gift wrap is free, and she wanted her free gift wrap. The clerk stood her ground, said rules are rules and they bend for no man (or woman).

The Old Lady decided that she wasn't going to be treated like that by ANYBODY. With her assistants in tow, they started to go around to every single department in the store returning everything. The Owner got wind of this and came up to her, begging her to stop, promising her free gift wrap for life. . .but it was too late. Apparently it was quite the comic scene as he followed her and her entourage around the store begging while she ignored him and undid her ~$10k in sales.

Somehow word of this scene got around. It was a crowded store, and people knew what was going on. Word leaked out quickly that the store no longer offered free gift wrap, and had greatly irritated the Old Lady in the process. A lot of people apparently decided to change their shopping plans that year. Sales went into free-fall within a week, the slow leak of customers turned into hemorrhaging.

The department store closed less than a year later. That was its last Christmas season. The building is there, but it sat empty for years. Now the bottom floor is a bookstore and a coffee house. No idea what they do with the upper floors, but they aren't open to the public.

I don't know just where the suck is. Maybe it was a sucky manager trying to nickle & dime loyal customers. Maybe it was the customer for being that petty over a small fee the manager was willing to waive. Maybe it was the clerk for not making an exception for a customer who had spent as much that day as probably her entire annual wages.

. . .but I'm pretty sure there is some kind of business lesson to be learned in all this.

[Mel]

Just goes to show how much influence money has.

[MoonCat]

To me, this just emphasizes that people want something for nothing. Even people who will never miss the money. The cost for gift wrapping was probably miniscule compared to the cost of her purchases, but she threw a hissy fit because she couldn't get something for free. EW to the max. I've never agreed that because you spend money somewhere, you are entitled to free stuff.

[Slayer]

. . .but I'm pretty sure there is some kind of business lesson to be learned in all this.

Couldn't agree more!

To me, this just emphasizes that people want something for nothing. Even people who will never miss the money. The cost for gift wrapping was probably miniscule compared to the cost of her purchases, but she threw a hissy fit because she couldn't get something for free. EW to the max. I've never agreed that because you spend money somewhere, you are entitled to free stuff.

It does sound like because she spent the money she wanted free stuff, but at the same time, it doesn't.

She'd been going there for 50+ years and every year received the same benefit: free gift wrap. For a sudden change, it can get quite frustrating (hell, I'm annoyed my mall's subway's "cash register can't do 10% on trios" for mall employees after changing owners and thus I rarely go there now unless it's just for a sandwich alone).

She probably went there specifically to buy items in order to get the free gift wrap. I bet lots of others did, too. If they went simply to buy, the customers wouldn't have abandoned the store like they did. They'd have laughed her off for being a bitch and continued to be customers regardless of now having to pay for wrap.

Like Mel said, money talks. Hers did and so did the residents. The fee was probably negligible in comparison to her 10k purchase, but sometimes it's just a matter of principle. For example, the $1 savings I'd get from ordering my trio isn't a lot, but I won't buy any regular trios anymore (which isn't exactly the same comparison as the lady since I'm dealing with liars versus an added fee, but meh).

If it were me and I was a new customer at that store, I wouldn't care. If I had been going there for 50+ years spending 4-5 digits each time? That would probably change my opinion. If I were the owner, I'd have seriously marketed the hell of out the free wrap in order to grab more customers.

Then again, I always wrap my own gifts XD Way cheaper!

[Irving Patrick Freleigh]

The cost for gift wrapping was probably miniscule compared to the cost of her purchases,

Then why not continue to offer it for free?

When you're a smaller, independent, more pricy store trying to make it against the Walmarts and big boxes and shopping malls of the world, service is about the only thing you've got going for you. Without that there isn't much of a reason for anybody to continue shopping with you.

Perhaps the Great Old Lady was being entitled, but then again she'd been getting free gift wrapping for many years, and word travels fast in a small town.

[SongsOfDragons]

This isn't the only department store that I've heard of close after stupid money-saving policies were rolled in.

[Irving Patrick Freleigh]

I don't think the policy is as big of an issue as is the store's apparent decision not to publicize it in any way.

Were I the owner, I would've made damn sure to let people know gift wrapping was no longer free. I'd put an ad in the local newspapers. Something like:

Due to changing economic conditions, we regret we are no longer able to offer free gift wrapping. We will continue to cheerfully wrap your purchases for the low price of $X per item. This was a difficult decision for us to make. Thank you for your continued business and we hope to continue serving you during the holidays and beyond.

I'd also put up signs around the store announcing the change.

It sounds to me the owner just made the decision on the fly and people didn't find out about it until the old lady starting returning all her purchases. Which is pretty shitty when the free gift wrapping drove a lot of business into that store.

[Seraph]

Well, you know, it might've been better for them to have done something like what Irv there suggested, publicize the heck out of the fact that gift wrap is no longer free.....unless you spent above $xx amount.

Small towns are SCARY with their word of mouth. They'll destroy something just by a rumor, let alone something that true. <shudder>

[Bunny the Veggie Slayer]

Agree with Seraph. And ad along the lines of "Free gift wrap service on all purchases over $xx.". That way, they'd save money by not wrapping low value sales. Keep the big spenders happy. And maybe encourage a few up sales. "Hmm, brand x is $x more... But they'll wrap it better than I can."

[wagegoth]

I worked at a department store many years ago (that also no longer exists) that had both free and paid gift wrap. The free gift wrap was a certain color, which varied from month to month and a designated bow. Anything else cost a couple of dollars. Customers loved it. The two oldest employees in the store manned the wrap desk. (I helped out one day and learned the secrets to pretty and fast wrapping, an extremely useful skill.) The paper was nice and heavy, but relatively inexpensive, as they bought it on huge rolls, as well as the ribbon. It was a reason shoppers came to the store. There was a Macy's, Sears, JCPenney, and another department store all in the same mall. If it came down to the same item at about the same price between our store and another, they'd come to our store for the free gift wrap.

I think the manager made a poor decision. Nickel and diming and cutting service, as noted, when service is part of your business, does not work. Maybe the rich woman did spend a lot that day and they lost the sale, but there were probably a number of other people who decided not to come back or didn't buy items because free gift wrap was no longer offered. A lot of small sales lost quickly add up.

[MoonCat]

I see what you're saying, but to me it still comes down to somebody valuing one small thing -- free gift wrapping, which they could well afford to pay for--over everything else the store offers. She liked the merchandise and the service just fine until she found out she had to pay for gift wrapping. I agree that the store could have handled it better..maybe free gift wrap if you spend a certain amount--and definitely advertising the change to let people know they feel they have no choice. And in that case, the locals who supposedly support the store should be willing to pay a nominal fee to keep their locally-owned-and-operated store, which employs local people, in business. Otherwise, it's just about a sense of entitlement. No business is ever obligated to give anything away.

[RealUnimportant]

It's not entitlement if it's always been a feature of the store. And yes, we all get those customers who "spend so much" (in their minds) so they expect "better" treatment, but this is someone whose single purchasing spree would have offset many of the lost lesser customers...

Stopping the free wrapping was a fail move; people have always loved gimmicks like that, it's what makes people come to your store instead of the other guy when you both sell identical goods for identical prices. When your only draw is "we've always gone there", removing the reasons why you've always gone there removes your attraction.

[Solacelawlz]

key traditions like that make your store stand out and have been in existance for ages, that stuff you don't wanna change when it comes to budget cuts. there's many other things a business can do to cut expenses, taking away a corner stone of your company that makes you stand out, esp if you're a small business, is not the correct way to do it. They found out the hard way it seems. and you most certainly don't wanna run away your vip customers, every company has them. they're just as essential as every other customer!