REI’s easy return policy made them MORE money!

7 Apr 2026 · 1 min

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In this monologue, Dan Novaes explains how REI distinguished itself from typical retailers by allowing customers to return used gear, a policy that many viewed as risky. He argues that this generous return policy reduced the perceived risk of purchasing expensive outdoor equipment, fostering customer trust and loyalty. Rather than harming the bottom line, the policy strengthened repeat business and demonstrated that innovation can focus on removing decision risk rather than altering the product itself.

Chapters

REI built customer trust with one of the most generous return policies in retail. Most stores have strict rules: limited days, unused items only, original packaging required. REI did something different. For years, customers could return products even after using them. If a jacket didn't perform well, or gear didn't meet expectations, it could still be returned. The idea seemed risky. People might abuse the system. Costs could increase. But something unexpected happened. Trust grew. Customers felt confident buying expensive gear because they knew they weren't stuck with it. Returns didn't destroy the business. They strengthened loyalty. People kept coming back. REI didn't just sell products. It reduced the fear of buying them. Sometimes innovation is not about the product itself. It's about removing the risk that stops people from making a decision.