Ecommerce Return Policy: How to Write a Returns and Exchanges Policy That Sells

by Katey Ferenzi January 28, 2016
January 28, 2016

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A solid returns and exchanges policy can make or break a sale. One of the biggest contributors to a sale is how you deal with a potential buyer’s common questions, especially regarding what you’ll do if they don’t like what they purchased. In a survey by comScore and UPS, 63% of American consumers check the returns policy before making a purchase and 48% would shop more with online retailers that offer hassle-free returns. These policies can have an even greater impact on international consumers, most notably in Germany where 72% of consumers would give more business to stores with hassle-free returns.


Consumers have been trained to be more cautious when it comes to buying online. Not only are they incurring the additional shipping costs, but they also are not able to interact with their purchase in person as they would in a physical store. A clear returns and exchanges policy shows that you, the ecommerce business owner, stand by your product, and pride yourself on a stellar customer service experience. It is one of the many “wow” factors you can provide shoppers who may be a little concerned about buying online rather than in person. Plus, looking out for your customers is just good business.


Providing a comprehensive policy for returns and exchanges instills confidence in you, your business and your products. And trust has a huge impact on your bottom line. One study featured in the Journal of Marketing found that customers who received free shipping on returns increased their purchases over the next two years by 58 to 357%.


Developing a comprehensive plan can actually reduce the resources you spend on returns and keep your customers coming back. Even though the customer may not be satisfied with their original purchase, handling the return professionally will ensure their continued patronage. Loyalty is earned by providing an awesome experience even when your product or service wasn’t a perfect fit.


Writing a Great Returns and Exchanges Policy

When it comes to updating or even adding a returns policy to your site, there are a few best practices to abide by. We’ll outline these below, but we’ve also included some additional tips and tactics on what to include. This is a potential differentiation factor between you and your competitors. Be sure you offer the better customer service experience from beginning to end, starting with ensuring they know your policy and ending by living up to your customer’s expectations of your promise.



  1. Don’t hide your policy. You customers should never have to go on a scavenger hunt to find information on your store. Keep this in broad daylight on your main menu. Or, if you’re comfortable, shout it from the rooftops by placing it in places like your carousel and banners throughout your store. But, the best place to put a returns policy is in your confirmation emails on purchases. Let those who have already bought know that you are dedicated to them liking their product, and that if they don’t –– they can always return it. Being your customers biggest advocate is a great way to foster lifetime loyalty.
  2. Never (ever, ever, ever) copy and paste. This goes for nearly anything on your site (especially product descriptions), but a returns and exchange policy is not a one-size-fits-all scenario. Personalize it to your specific business and target audience. Make this a fun page to read and reiterate your commitment to your customers. Include, if possible, customer reviews of the experience as well. Use this page as a testimonial spot on your site –– one that you can use to prove to potential customers that not only do people love your products, but that even when they don’t, you still treat everyone with respect, dignity and fairness.
  3. Use plain English. Yes, you want to talk to your target audience, but avoid using words that send people running for a dictionary. You don’t want to confuse anyone –– especially those Google bots that can help boost your SEO. Use keywords. Reiterate your promise. Incorporate real customer feedback. Rinse. Repeat.
  4. Avoid the scary stuff. Try not to use phrases like “you must” and “you are required” or, one of the worst, “we are not responsible for.” Long story short, make your returns process easy. In fact, your returns process should be just as easy as it was to buy the item in the first place. Don’t offload the issue on the customer.
  5. Outline what they can expect from you. Do you exchange, offer store credit or return their money? Every merchant has their own preference, and you shouldn’t feel pressured to offer only a full refund. Determine what works best for your unique business. You can even A/B test here to see which offerings your customers prefer.
  6. Set expectations for your customer. What’s the procedure for a return or exchange? Does the customer need to use your packaging or can they use their own? Do they need to include the order slip? Is there a limited time in which a return or exchange can be completed? Who pays for shipping, you or your customer? Outline the specific process and guidelines. Make it easy, understandable and straight-forward.
  7. Educate your staff. Make sure all employees are up to date with your return policy and procedures so they can assist customers quickly and effectively.
  8. Be prepared to eat the cost of your mistakes. If you messed up, be honest and make it right. If you shipped the wrong item, or packaged it poorly, you should be willing to make it right no matter what the official policy is. We all make mistakes, it’s how you handle those mistakes that matters.

Finally, don’t forget to play fair. If you make a change to your policy, be sure to honor the old policy if an order was placed before the change took place.


Examples of Great Return Policies

Need some ideas on how to create a good policy? Start by checking out your competitors. What are they doing to make their (potentially your) customers happy? What are they doing that you can do better? This should always be the first place you start on any industry or market research project.


Once you have some basic guidelines, look beyond your retail segment and into the industry as a whole. Specifically, take a look at what the ecommerce innovators are doing. There are already plenty of businesses doing returns well –– really well –– and they don’t all start with the letter Z. Yes, Zappos’s returns policy is mentioned a great deal, and for good reason. They do a great job standing by their product, both shipping and returns are free of fees and hassle.


Here are a few other big names to check out:


Nordstroms


Nordstroms has built a strong reputation on allowing free returns at any time for any reason. And, the company does a fabulous job of making sure all of their customers are aware of the policy. It is displayed right there on their homepage.


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Note, too, though, the language Nordstroms uses to describe their policy.


“We stand behind our goods and services and want you to be satisfied with them. We’ll always do our best to take care of customers — our philosophy is to deal with you fairly and reasonably; we hope you will be fair and reasonable with us as well.”


This is a great example of boundary and expectation setting and could be a sentence found in a psychology 101 textbook. It is clear. It is concise. It level-sets an expectation with honesty and integrity. Your return policy should do the same.


Anthropologie


Anthropologie’s return policy page leaves no detail out. It walks customers through exactly how to return items, the time frame in which they can do so, and even provides information on SmartLabels and complimentary USPS pick-up for big ticket items that turned out to not work in the customer’s space.


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Plus, Anthropologie allows for both full refunds and exchanges. This likely helps to satisfy individual customer preferences for how the return is handled.


Athleta


The athletic apparel company advertises a “Give-It-A-Workout Guarantee” and will take back any purchase for any reason. This directly counters Lululemon, a primary competitor notorious for their tough returns policy.


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Costco


Costco offers a full refunds on all their products, but they do have a time limit of 90 days on consumer electronics like computers, phones, cameras and TVs. This is a great example of creating a personalized policy that works best both your business and your customers.


For Not-Yet Household Name Brands

It is definitely easier for legacy companies to offset the financial impact of free shipping on returns and exchanges or full refunds with no questions asked. As a midsize business, it can be hard to go big right out of the gate –– especially when you have margins to consider.


Ideally, you’ll work your way up to a very competitive offering, like the lifetime guarantee Bigcommerce customer Lupine has for their dog collars.


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In the meantime, there are some things that you can do for your customers that will still show them you stand behind your offering. After all, a good returns policy should not only be positive for the customer, it should still be profitable for your business.



  1. Crunch the numbers and figure out how to offer free return shipping with a minimum order value. For instance, you could have free returns on any order over $ 50. This will help you cover some or all of the cost of the return or exchange.
  2. If you have a physical store, let your customers return or exchange a product in person for free. That’s something the big guys do, and many consumers prefer this convenient option over shipping back returns.
  3. Offer free return shipping during your high-volume sales periods, like Christmas and other holidays, as a promotional offer. Customers who purchase during a set period of time, up to Dec. 24 for example, would qualify for free shipping on any returns. The high volume of sales could offset any losses you may encounter.

Have any advice or examples we missed? Leave it in the comments and we’ll update the post.

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