How Customers Want to Return or Exchange a Product

Identifying and Measuring the Key Moments of Truth in Return/Exchange/Cancel Customer Scenario® Patterns

September 11, 2008

Customer scenarios fall into patterns. It's valuable to know these patterns ahead of time so that you'll know what kinds of customer and operational metrics to elicit. Then you can focus on how to differentiate the experience, products, and services you offer to help customers reach their goals. This report focuses on the moments of truth and metrics in a typical return/exchange/cancel scenario.


We have published the 2008 Customer Scenario® patterns for selecting and buying[1] and for reordering and renewing[2] products and services. Now we are looking at the flip side: returning or exchanging a product or cancelling or changing a service. However, we have discovered that many customers will not commit to purchasing a product or service unless they understand how they would be able to exchange and/or return that product or cancel that service if it no longer meets their needs.

There are three points in the customer lifecycle in which cancels, returns, or exchanges are common:

  1. At the very beginning of the lifecycle—right after the initial order is placed.
  2. During the usage of the product or service when the customer discovers that it doesn’t quite fit (or no longer fits) their requirements.
  3. At the end of the product lifecycle, when, instead of renewing, replenishing, or repurchasing the product or service, the customer prefers to cancel.

Although the details of the situation for each customer are different and the types of products or services are different, there are patterns to virtually any return/exchange/ cancel customer scenario. When returning a product or cancelling a service, the customer typically has three key requirements:

  • It’s easy to make a return, exchange a product/change a service, or cancel a service
  • There is no unexpected penalty for returning/exchanging/cancelling
  • I get quickly reimbursed for any monies owed me

We call these the customer’s “Moments of Truth”—aka “showstoppers”—if you don’t address these issues crisply, you risk losing your customer forever.

Once you recognize the common moments of truth, you can identify the types of customer metrics that will ensure that you meet their conditions of satisfaction as well as the operational metrics you can put in place to monitor how successful you are at meeting your customers’ ultimate goals for doing business with you. Then you can focus your co-design activities on how to differentiate the experience, products, and services you offer to help customers reach those goals.

Identifying customers’ moments of truth and metrics allows you to recognize:

  • How the customer will be “grading” you
  • How you grade yourself in helping the customer be successful
  • How you can identify and measure business opportunities that can result from providing a great customer experience


Similar for Products and Services, B2B and B2C

It happens in both business and personal situations—you are unhappy with or no longer need a product or service for which you have paid. Typically, now comes the hard part: returning, exchanging, or cancelling the product/service and getting reimbursed. Frequently, providers make it so difficult or confusing to return, exchange, or cancel that a lot of customers simply eat the expense and throw the unwanted products in a closet somewhere. In fact, many vendors actually rely on people keeping unwanted items and services and figure that into financial plans. Think about it; have you taken up a free product or service offer, knowing that you will be able to return it or cancel it with no penalty before your credit card will be billed? How often have you actually completed the return or bothered to cancel, especially if the cost wasn’t particularly high?

Now think about why you didn’t complete the return or cancellation? Usually it’s because you weren’t sure exactly how to make the return; or else, it is so complicated to execute that you don’t cancel the service. What you really want is a clear, simple way to return what you don’t want and get your money back.

Moments of Truth in Return/Exchange/Cancel

Although there are always variations on a theme (based on specific customer type, specific service or product line, industry, and context), there are three key moments of truth that are part of every return/exchange/cancel scenario, as shown in Illustration 1:

  • It’s easy to return a product, exchange a product/change a service, or cancel a service.
  • There is no unexpected penalty for returning/exchanging/cancelling.
  • I get quickly reimbursed for any monies owed me.

Moments of Truth in Return/Exchange/Cancel Scenarios

Moments of Truth in Return/Exchange/Cancel Scenarios

© 2008 Patricia Seybold Group

Illustration 1. In return/exchange/cancel scenarios, whether for products or services, or B2B or B2C, there are three key moments of truth.

CONDITIONS OF SATISFACTION FOR MOMENTS OF TRUTH. Although these moments of truth are virtually universal in this type of scenario, sometimes they are expressed in a slightly different way depending on the Conditions of Satisfaction for the customer. Conditions of satisfaction are things that have to happen in my specific context and scenario to make me happy; sometimes they are expressed as emotions (how I feel about what’s happening). In a return/exchange/cancel scenario, there are a bunch of conditions of satisfaction, which, although they aren’t universal, often emerge...(more)

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