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With the Christmas season over, retailers and distributors are now facing one of the biggest and ongoing headaches in the channel, increased product returns.

Typically the post-Christmas season is rife with returns, particularly in the software market, when customers bring back unwanted presents or software unsuitable for their systems. However the old adage "The customer is always right" is proving to be both untrue and a major bugbear for retailers and distributors, who are being forced to wear the costs of often unjustified product returns.

"Customers will often fail to read the requirements, or even the fact that it is a PC title which will not work on a Mac computer," director of Berlin Wall Software Supermarket Rob Beaumont explained. "[Customers think, 'oops, it does not work - no probs, I'll just take it back and get my money back'."

According to Beaumont, the problem is driven by the marketing initiatives of big chain stores, where customers have come to accept no-questions-asked return policies as fait accompli. The channel is not only bearing the cost of returns. The policy also opens the door for increased piracy.

"The bulk of our shop is software, a minefield in itself because it can be copied, returned and nothing is said," said Beaumont.

The Business Software Association of Australia's Jim Macnamara told ARN that under consumer laws, customers are entitled to a refund when the products are returned in good condition, but retailers could take steps to deter would-be cheats.

Macnamara advised fraudulent returns could be slowed down by warning the customers about piracy.

"Asking customers to provide a signed statement that all software has been taken off their machines is a good deterrent" he advised. "Obviously it doesn't stop them, but it can slow them down because if a small business or individual signs their name, they tend to think twice."


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