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#48900 - 12/11/01 02:00 PM Cable Return Policy
mxy15 Offline
Gunslinger

Registered: 06/18/01
Posts: 52
Loc: Rogers, AR
In response to the latest news regarding Outlaw Audio Cables, here are my two cents worth of opinion.

1. "Unlike higher priced electronics products, there is no practical market for "B Stock" cables, and we would basically have to trash any returned cables."

I don't agree with this statement. I think there is a potential market for B Stock cables. I think the reason why we haven't seen a large market for B Stock cables is because cables are the most commonly overlooked component of a typical system.

If people are willing to buy an used amp or CD player, which has a greater chance of breaking down due to usage, what's the chance of a cable breaking down after extensive usage? When was the last time anyone had a defective cable? I never experience this before. I know people who have bought used premium cables at a discount and have no problem with it. Therefore I would be less hesitant to buy used cable then a piece of used electronic equipment. Also by buying used cable, it lowers the cost of entry for those of us on a budget.

2. "On one hand, we could allow returns, but cover the cost of returns either by raising the price to everyone or adding a "restocking fee" for returned cables."

Why bother doing business this way? Let the consumer pay for shipping both ways. When I return cables from other Internet shops such as Bettercables.com and Audioadvisor.com, I had the eat the shipping charge. This way you don't have the raise the cost to cover returning. If Outlaw decides to charge a re-stocking fee to cover the Outlaw's profit margin I think that's reasonable as long as it is explained up front.

Let's crunch some numbers to see if what I proposes makes sense. Assuming that I buy the 3 pairs of PCA-Pure Copper Analog 0.5M interconnect for $79.95 + $12 S/H. I try it at home for 20 days and find it lacking and decides that I don't want it. Without a return policy I am out $92 and have three sets of cables I don't want. But if Outlaw allow me to return it with let's say a $20 restocking fee, ($10 a pair, which I think is HIGH) and I have to pay another $12 for S/H, now the total cost to me would be $44 (2 S/H charges and restock fee) and I get $48 back. Assuming that there is demand for B Stock cables, and Outlaw can then sell the return cables for let's say $50 or $55 for the set of 3, Outlaw should still make a nice profit from this transaction.

As much as I trust Outlaw to provide me with quality audio and HT gears at a reasonable cost, I am still hesitant to try the Outlaw cable without the safety net of a return policy. Especially being a new product in the market I just don't know what to expect from these cables without audition them. Please chime in if you agree with my assumptions and also please let me know if you think I am totally wrong on this. Thanks.

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#48901 - 12/11/01 02:42 PM Re: Cable Return Policy
gonk Offline
Desperado

Registered: 03/21/01
Posts: 14054
Loc: Memphis, TN USA
I've leaned somewhat toward Outlaw's position here. Compared to the "big" stuff, they've got to be operating on a narrower profit margin on the interconnects.

1. I can see where they are coming from with the statement that there's not a practical market for used cables. I think such markets could potentially be developed however, but there may be some concern or uncertainty about dedicating the time and effort to explore it for a single product. They could probably go through a channel like Audiogon and sell them for a reduced price, or they could try to sell them on their site. If that was the only hurdle, I'd agree that it's a weak argument.

2) Restocking fees, higher prices, and/or return shipping charges... The time it takes to process a returned $20 optical cable is not much different than the time it takes to process a returned $1100 amp (add some time for figuring out how to move the 70+ pound box). Time costs money, and it wouldn't take much time to eat up the entire list cost of a PDO cable just handling a return. Factor in the fact that if they're lucky they're going to get to re-sell that PDO at a reduced price ($15 or less?) and at this point they're giving the cables away as far as their bottom line is concerned. A short stack at $80 would be perhaps a little easier to absorb, but still would start to be risky. A restocking fee and leaving shipping to the buyer would be a reasonable solution (if they could find a reliable way to re-sell the returns), and I think $20 for the short stack you mentioned (which is $6.67 per pair, not $10 -- 3 pairs) is not too high when you consider restocking fees in some other industries are often 25% to 30% or even more (or so the contractors tell us when they get stuck with the wrong product and want to use it anyway).

I don't think you're far from wrong, in fact your probably pretty much right. It's a case, however, where the risk to the manufacturer is enough that it is reasonable to argue for either choice -- no returns or returns with a restocking fee. I'd hate to see Outlaw get burned by a bunch of returns on interconnects and not be able to keep the 950 at the $899 price or have to delay some other product development because of financial problems.

As an alternative to the absence of a return policy, a wary buyer could perhaps buy a set and if necessary sell the cables for close to list price on somewhere like Audiogon or eBay and recover most of their investment. It's more of a hassle than simply boxing it up and shipping it back, but it's an option.
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gonk
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