Buy and Return

A tactic

by Peter Ratnadurai, October 29, 2009

We know that Sri Lanka's economic survival depends on exports of garments to the West, which accounts for a quarter of foreign currency earnings. We know that by linking employment of Sinhalese to the human rights of Tamils we can help secure a just future for our people. Given the snail pace of Diaspora organisations in Europe and Canada, how can we as individuals help cultivate this leverage?

Example

1. Buy goods marked as “made in Sri Lanka”.
2. IMPORTANT – Use credit card to make the purchase and check returns policy for the goods.
3. Within hours or days, return the goods with a short note:

“I am returning these goods because they are made in Sri Lanka. Rights groups, US and EU say Sri Lanka is violating the fundamental human rights of 300, 000 civilians detained in internment camps. I refuse to contribute to this crime against humanity.”

Note can be as short as one likes: what is important is that the store is aware of your reason as opposition to “made in Sri Lanka”.

Easy

There is no start or end time or a fixed date. Wife buys during her lunch break and returns on her way home; I buy one afternoon and return the other. How about putting aside 30 minutes during the weekly family shopping?

No need to stand in the cold or prepare placards. Half a dozen notes can be printed on an A4 paper or they can be hand written by the kids. For this tactic, photos and police permissions are unnecessary.

Effective

Why is this better than simply walking into a store and handing over a colourful leaflet quoting HRW, Amnesty and the lot?

Many of the retailers, at the purchasing decision making level, are already aware of Sri Lanka's disregard for human rights. When the GSP+ debate was hot topic, for example, Britain's Marks and Spencer went on record urging the scheme to be extended simply because its operating profits could be hurt.

What we need to do is get the message across to the retailers in a language they understand: by taking actions that affect their revenues and share prices.

One tactic is store front protests, as the anti-fur and Burma campaigns did. This requires effective and thought-led organisations. Unfortunately, we in the Tamil Diaspora are not blessed.

Buy and Return also hits the bottom-line for retailers, though many may be ill aware of this.

Most important to note is the merchant fee a retailer has to pay when a credit card is used for purchase. Currently, this is about 1.5% in UK, 1.75% in US and 2% in Canada and Europe. So, buy 200 dollars worth of goods at a Gap in Toronto, and you have already cost them four dollars. This fee is, of course, built into the price of the item. When it is returned, however, that fee is a loss for the retailer. And there is an additional reversal fee (charge back).  

There are other operating costs involved in the sale of an item; all of which are built into the sale price. When items are returned, these are losses. Take for example the labour cost of staff processing the sale. Furthermore, when an item is returned there are additional costs associated with processing of the return and then re-introducing it into the supply chain.

So, when 200 dollars of goods are bought and returned, loss for Gap may well be more than 20 dollars. When done in sufficient numbers, that will hurt. Imagine 10, 000 people making a single 200 dollar return each per week: 200, 000 dollars loss in a single week.

The Gap has stores in US, Canada, UK and France. If well organised, we can have 50, 000 people returning 500 dollars worth of goods each week. Loss could be in excess of 2.5 million dollars. The Gap's weekly global earnings are less than 20 million dollars. That means an effective Buy and Return campaign can shave profits by more than 15%; in other words, we can have the entire executive management fired.

Most retailers have strong quality control mechanisms to monitor returns; simply because of their financial impact. The best way to communicate with senior management is not via email or post: both will find a corner in the recycle bin. The notes with which goods are returned will reach store manager. If numbers are sufficient, they will reach area manager and even purchasing manager.

Global organisations have to source from same manufacturer for all countries. They can not afford to produce the same shirt in Sri Lanka for US market and in another country for Canada and UK markets. Though Tamil Diaspora may be concentrated in Canada and UK, we can have major impact on multinational retailers.

“Every Little Helps”

The slogan of a British retailer, Tesco, which is known to source garments of Sri Lanka, says a lot about what we need to do.

Rather than waiting for one of our organisations to advertise on radio and TV, we as individuals must think through this tactic and help implement it.

Each and every one of us has to be true to our conscience, set ourselves targets of amounts we want to buy and return every week.

We must also do our bit to communicate this tactic in all languages to all Tamils and friends of Tamils in all countries, so that the number of people participating can be maximum possible.

Success will come when Mahinda Rajapaksa's Sinhala vote base marches down Colombo demanding the release of 300, 000 Tamils, including 50, 000 children, who are interned since May. If their livelihoods depend on it, they will. Our kins' lives depend on it. But, will we?