HDTV Return Rates — The Real Deal?

Some time ago, Forrester research issued a report that (among other things) outlined the retail return rates of HDTVs, and the numbers and conclusion were shocking.  Boiling it down, in some regions 2 of every 10 HDTV sets that were walked out of retail stores came back and were returned.  If you think about it, this has to be very expensive not only for the retailer (with big-box items like a TV, that take  two people to lift, even draconian charge-backs for remainders and returns don’t make them whole), but for the manufacturer, who inevitably gets dinged with return charges.  For large items like this, the costs can be very significant — especially when you multiply by between 10% and 20%.

EE Times Asia has several experts chime in with their theories from early last year:

Consumer confusion hikes HDTV return rate

Now, this data is from Q4 2006, and is a bit dated.  Contemporaneous data suggest the issue has gotten better — but return rates are still astonishingly high.  One would naturally ask “why are so many people so dissatisfied with their HDTV purchase that they would go through the bother of hauling it back”?

My very unscientific poll of Best Buy (and before they went under — Circuit City) floor associates, CE equipment and silicon vendors suggests that return rates are still high, but that in 2007 and 2008, there are two primary reasons:

1. The single largest reason HDTVs show back up at stores is because They Won’t Fit.  Yes, as absurd as this sounds, the TV looks a lot smaller when it’s up on a wall with 120 other TVs.  People do the “Michelangelo” measurement technique with two thumbs and a squinted eye, take the TV home, and lo — it’s actually too big to fit on their table, or in their cabinet.  Back it goes.  This kind of return is pretty easy to “spot” in data because the returning buyer uses store credit to buy a TV of the exact same brand, but just smaller.

2. The second biggest reason is that the buyer used to have a CRT set at home, and has standard-def digital cable.  All they know, is that when the TV was at the store, the picture looked great.  They haven’t been told, or don’t fully understand, that to really see what the TV is capable of, they need a high-def source.  When they plug in the new HDTV to their stepped-on, over-compressed cable system’s SD feed, the low-end TV faithfully reproduces all the compression artifacts, ringing, blocking, and banding/false contouring, looking much WORSE than their old CRT set, which did a good job of blurring all those artifacts to the point where they weren’t as noticeable.  So… back it goes.

Now, some of us techheads would think nothing of blowing $3,000 on up for a good set (I stare at pixels for a living, so it matters to me), but the fact of the matter is that even $1,500 is a BIG purchase for most families of average income.  In many cases, money has been saved for a good deal of time to allow the purchase — and expectations are high.

I don’t think “customer education” is the entire solution — I think customers who spend a “lowly” $1,500,  have expectations that their 42″ HDTV LCD or Plasma TV will look “better” than their old 50″ Projection TV that cost $900.  I don’t think that’s out of line.

What do you think?  And, what are your suggestions for solving the issues?


~ by opticalflow on February 14, 2009.

One Response to “HDTV Return Rates — The Real Deal?”

  1. thanks, your article is very informative.

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