GM 60 Day Return Program a Marked Success
Remember the General Motors refund program? Back in the early fall of 2009, GM decided that the most effective way to convince shoppers that its vehicles were the best in the business was to include a 60-day return policy. Under this program buyers were able to essentially wash their hands of any future payments should they be dissatisfied with the quality of their new purchase. As a marketing exercise, the initiative was so successful that GM would go on to extend it in order to continue cashing in on the renewed foot traffic that it brought to the company's dealerships - traffic that it desperately needed to help re-establish itself after a crushing bankruptcy re-organization.
Perhaps the most surprising aspect of the entire car return program is not that GM chose to offer it - Hyundai had put a similar deal on the table in the first quarter of 2009 - but that so few automobiles ended up being taken back by their respective dealerships after they had been sold. So far, 439,000 cars, trucks and SUVs have been sold by Chevrolet, Buick, GMC and Cadillac since the plan was put into place. Out of that massive number, a mere 339 buyers have taken advantage of the return option. As Mark Reuss, president of GM North America put it, 'that's less than 1/10th of 1 percent.'
Of course, there are a number of mitigating factors that could explain why the overall number of returns have been quite low. General Motors requires that buyers meet certain qualifications prior to being able to being their vehicle back in terms mileage or damage to the vehicle, as well as asking them to satisfy a minimum 30 day ownership period. In addition, the company also offered shoppers the chance to swap their right to return a vehicle for an additional $500 incentive. Since no figures have been released by GM regarding how often that particular option was exercised, the claim of '1/10th of 1 percent' becomes slightly more difficult to validate.
Despite these reservations, there is no doubt that 339 returns is a number so small that the program can definitely be labeled a success. In fact, given that GM claims to have extensively interviewed dissatisfied customers in order to find out exactly why they chose to abandon their brand new vehicles, the entire program could very well be painted as an inexpensive method for the brand to conduct in-depth market research.
Unfortunately for new car shoppers interested in a domestic vehicle, it does not appear as though GM will be extending its program a second time, past its January 4, 2010 expiration date, or that other companies will follow suit and mimic its actions. Hyundai decided to continue on with its own initial return policy despite signs that the economy had taken a few small steps toward recovery. Its more restrictive program is still available through 2010.
The amount of consumer confidence generated by General Motors through its low vehicle return rate will undoubtedly help it to continue moving cars and trucks at a far higher rate than it was able to manage in 2009.