Average Rate Of Return For CE Products Remains Statistically Constant At Eight Percent, Finds New CEA Survey

Updated Consumer Research Study Provides Industry with Valuable Customer Insight on Return Rates and Related Issues.

Arlington, Virginia, 12/20/2005, The average rate of return for consumer electronics (CE) products remains statistically constant at eight percent, according to a study released today by the Consumer Electronics Association (CEA®). The study is an update to CEA’s Return Rates and Issues for CE Products Study last conducted in 2002. CEA has conducted a total of six product returns research studies since 1994.

The 2005 study found that overall, 27 percent of consumers have returned or exchanged a CE product in the past two years, which is comparable to 30 percent in 1998. Study results showed that males are more likely to return than females, 31 versus 24 percent; however, women indicated they feel they’re better at navigating the returns process.

The reasons for a return also remained constant compared to the 2002 findings: the product didn’t work as the consumer thought it would, it didn’t work right out of the box and the product broke while using it. In general, returning a product didn’t change consumer confidence significantly in the brand or the retailer and nearly 70 percent of consumers were satisfied with the return process.

“The biggest changes have come in the vehicle electronics and video categories,” said Tim Herbert, senior director, CEA Market Research. "In vehicle electronics, we found a drop in returns from 11 percent in 2002 to a mere three percent today. Video tells a different story, with an increase in returns from seven percent to 11 percent.

“DVD players appeared in the survey as the most returned product, which may be explained by the fact that we’re in the late stages of DVD adoption with 80 percent household penetration. Consumers moving over to DVD at this stage may have an older TV without the proper connections or perhaps they thought the product would be able to record programs just like their VCR. Additionally, with so many sub-$50 players on the market today, many DVD players may be purchased as gifts that the recipient did not need and, therefore, returned. That is something for retailers to be mindful of as we round-out the holiday shopping season and prepare for possible January returns.”

Herbert added that CEA has several online consumer resources, which may help diminish product returns resulting from consumer confusion or misunderstandings about product capabilities. CEA’s Connections Guide (www.ceaconnectionsguide.com) is an online Flash program that takes consumers step-by-step through the set-up process to interconnect consumer electronics products. Created by CEA’s Accessories Division, the Connections Guide contains easy-to-understand descriptions and photographs of each connector for audio and video devices. Additionally, CEA recently unveiled another online resource for consumers - www.MyCEknowhow.com - which is the place to learn about the latest technologies, concepts and terminology before consumers make a purchase. Launched just in time for the holidays, MyCEknowhow.com currently features a buying guide for digital imaging and will incorporate other technologies in 2006.

CEA Market Research surveyed 2,000 adults by phone in October for the 2005 Return Rates and Issues for CE Products Update. It was designed and formulated by CEA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer electronics industry. The complete study is available free to CEA member companies. Non-members may purchase the study for $499 at www.ce.org/CEAStore.

About CEA:
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the consumer technology industry through technology policy, events, research, promotion and the fostering of business and strategic relationships. CEA represents more than 2,000 corporate members involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, home networking, multimedia and accessory products, as well as related services that are sold through consumer channels. Combined, CEA’s members account for more than $122 billion in annual sales. CEA’s resources are available online at www.CE.org, the definitive source for information about the consumer electronics industry. CEA also sponsors and manages the International CES - Defining Tomorrow’s Technology. All profits from CES are reinvested into industry services, including technical training and education, industry promotion, engineering standards development, market research and legislative advocacy.

Contact Information

Jeff Joseph

Consumer Electronics Association (CEA)

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