Here’s a scenario: a man—let’s call him Ted—has been researching high-end driving irons for months. He knows what he wants, and he finally finds one at an online sporting goods store for just under $250. He even pays extra for two-day delivery. By the weekend he’s holding it in his hands, taking practice swings on his patio, and feeling a deep sense of…
…disappointment.
It’s not the club itself: the club is as sleek and well-balanced as he anticipated it would be. The problem is, all that anticipation is gone now. He’d spent weeks building excitement, looking forward to this moment. Once the moment was here, however, the excitement faded away.
Now, he’s thinking about his next credit card statement. Now he’s wondering what his wife will say. Now he’s realizing that he doesn’t even play golf more than two or three times a year. And he’s coming to the conclusion that this might not have been such a smart move, after all.
It’s called buyer’s remorse. And it’s not a good feeling.
Understanding Buyer’s Remorse
We’ve all experienced buyer’s remorse at one point or another. Sometimes, it’s the realization that we made a dumb purchase; it could be something we don’t need, can’t afford, or both. This often leads to a return, and while that’s not ideal for the merchant, it’s not the worst thing, either.
In other situations, however, that guilty feeling really comes more from the fear that we made a dumb purchase. Let’s say Ted takes in a round of golf that very afternoon, and absolutely falls in love with his new iron. It turns out his wife isn’t really upset, he knows he got a great deal on it, and it makes golf so much more enjoyable for him, he actually starts playing more often.
Just like that, he forgets all about the regret he felt. So what’s really going on here?
The psychology of buyer’s remorse is actually fascinating. I don’t have the space to go into all the details, but a large part of it is based on two different motivational systems: avoidance and approach. In simple terms, your approach system tends to make you excited about getting things, and your avoidance system makes you sorry when you actually get them. It’s not unlike the cartoon trope of trying to make a decision with an angel on one shoulder and a devil on the other, each pushing their particular agenda.
Approaching vs. Avoiding
What the avoidance system is actually trying to avoid is any type of risk: our psyches don’t like feelings of fear or guilt, and we have a built-in tendency to avoid situations that might cause those feelings. In our example, Ted feared his wife’s reaction, and felt guilty for spending so much money.
The approach system—as in, approaching the purchase or event—is essentially the anticipation of an event. This can be a long, drawn-out process, like Ted’s. It can also happen by just seeing a celebrity in a new pair of shoes and immediately driving to Neiman-Marcus for a pair of your own.
The problem is, the approach system is typically louder than the avoidance system—so much so that it effectively drowns out the “proactive regret” that would cause us to stop and examine a situation more carefully before we actually carry through. The more you want something, the more your approach system eggs you on.
Your desires drive the approach system, and it pushes you to imagine (or rationalize) how much better your life will be once you achieve one of those desires. After the fact, however, the approach system more or less goes to sleep…and that means you can now hear the avoidance system hammering things like money worries to the front of your brain.
With the approach system out of the picture (for now), the avoidance system can make the fear and guilt seem greater than they really are. That’s why we’re as likely to experience buyer’s remorse over a good, logical purchase as we are over a questionable transaction. The difference, of course, is that the fear and guilt usually disappear quickly if the purchase indeed turns out to be a good one.
And if it doesn’t? Well, that’s another story.
Buyer’s Remorse and Chargebacks
Buyer’s remorse can easily lead to a returned purchase; as I pointed out earlier, this isn’t ideal, but for the merchant, there are worse things. Like chargebacks.
If Ted had decided not to keep his driving iron, he could have simply returned it to the merchant. But he also could’ve called the card’s issuing bank and filed a chargeback. Of course, he’d need to use a non-valid claim, such as saying the product never arrived, or was broken on arrival. He’d also have to convince the bank that the merchant refused to resolve the situation.
If the bank agrees, it will forcibly remove the purchase price and shipping from the merchant’s account, and refund them to Ted. The merchant would also be hit with an administration fee.
So why would Ted choose one method over the other? Well, when we’re talking about buyer’s remorse, some potential triggers actually stem from a merchant’s policies. For example:
Imagine if Ted didn’t try out the club that afternoon; in fact, it’s almost three weeks before he gets to the golf course. That’s when he finds out he doesn’t like the club, and decides to return it. Unfortunately, the merchant he purchased from has a strict 15-day return policy. Ted is stuck.
Or let’s say the merchant has a reasonable return window, but Ted would have to pay return shipping. Or a 15% restocking fee. Or both. In these scenarios, we could say it was Ted’s own fault, either because he waited too long or because he didn’t read the fine print. But in reality, the merchant’s strict return policies could be forcing customers to file chargebacks as a last resort
Merchants Aren’t Always in Charge
Here’s another situation: Becky is at the mall when she spots this darling yellow sweater in a shop window. She’s almost late for an appointment, so she doesn’t have time to try it on. She simply pops into the store, grabs a size medium, and takes it to the cashier. (Remember, the approach system doesn’t always need a long lead time.)
Fast-forward to that evening, and you can imagine the scene: Becky’s in front of the mirror wearing the sweater. The sleeves are too short, the shoulders too tight, and as it turns out, yellow just isn’t her color. Like Ted, she’s regretting her purchase, and wondering what to do about it. She could easily take it back to the store…but let’s add another twist to the story.
What if the cashier at the store that day happened to be a gum-chewing, Instagram-obsessed teenager who acted like the whole retail experience was beneath her. As she reluctantly started to ring up the sweater, she looked Becky up and down once or twice, then coldly asked “Are you sure you wouldn’t be better off with a large?”
Clothing sizes being what they are, our heroine may’ve actually been wondering that herself. But remember, she didn’t have time to try it on … and she certainly wasn’t going to back down from Little Miss Eye-Roller. She paid for the sweater and left.
Now, however, she has another problem. The sweater obviously isn’t a keeper, but if she goes to return it, there’s a chance she’ll run into that same cashier. The purchase itself was bad enough; now Becky’s imagining the smug, “I-told-you-so” look on the girl’s face. “No. Way.” she thinks.
Here’s where the avoidance system kicks in, big time. In this case, it’s actually arguing with itself: on the one hand, it’s telling her she has to return the sweater (guilt over wasted money) while simultaneously saying she can’t return the sweater (fear of looking foolish).
By filing a chargeback, she can avoid both things…so you can see how that might feel like a very attractive option.
Dealing with Customers’ Buyer’s Remorse
So what is a merchant to do? Well, in our last example, there’s not much you can do, except keep a tight rein on your employees. When it comes to policies, however, merchants need to do everything in their power to make returns fast, simple, and hassle-free.
A lot of merchants don’t like to hear that. “You’re encouraging customers to return merchandise!” they say, but it’s actually worse than that: I’m advocating policies that might discourage some people from buying in the first place.
The key word there is “some”: while you obviously want to entice customers to make purchases, tricking someone into buying by using misleading information or hiding policy specifics will come back to haunt you. If you’re hiding your return policy in the fine print and hoping the purchaser doesn’t notice it until it’s too late, well, guess what? The customer literally has months in which to opt for a chargeback.
You may think you’re not deliberately hiding your policy information—most merchants don’t—but that’s not enough. You need to practically scream it from the rooftops. Particularly with eCommerce, your return policies should be simple, clear, and posted in multiple locations on your website.
The bottom line is, merchants need to ensure that making a return is faster, easier, and less hassle than filing a chargeback with the bank. It may mean you have to accept more returns (and possibly eat more shipping costs than you’d like), but in the long run, you’ll have happier customers, a better relationship with your bank, and fewer chargebacks to deal with.
Buyer’s remorse isn’t new, nor is it likely to go away in the future. It is, however, one more thing the merchant needs to factor into an overall risk mitigation strategy.
