Source: Business Insider
Casper’s generous return policy on its mattresses is costing the company tens of millions of dollars, the company revealed recently in its initial public offering paperwork . In the first nine months of last year, returns, refunds, and discounts cost Casper $80 million — or about 20 cents of every dollar in sales it took in during that period. The company has also had to set aside increasing amounts of money as a reserve against future returns. In part thanks to such costs, the company is operating in the red at a time when Wall Street is increasingly skeptical of money-losing companies. Click here for more BI Prime stories . It turns out that offering an extraordinarily generous return policy on mattresses can be super-costly. At least that’s what Casper’s financial statements indicate. In the first nine months of last year, refunds, returns, and discounts cost the company $80 million, according to the document the company filed last week in advance of a planned public offering . That’s about 20 cents out of every dollar in sales the company took in, including those that it ultimately refunded. “That’s a high number,” said Rob Siegel, a lecturer in management at Stanford Graduate School of Business.
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