Tips For Creating A Return Policy for Your Business

Alice Chen — March 31, 2017

A return policy outlines the details that allow your customers to return items that they’re not satisfied with or have changed their minds about. Establishing a fair return policy for your business is part of providing great customer service and shows customers that you genuinely care about nurturing customer relationships and not just the bottom line. It comes down to deciding on a return policy that’s both reasonable for your customers and makes sense for your business.

Why do you need a return policy?

In an ideal world, consumers would never need to return their purchases. But returns are inevitable, especially with online purchases because customers can’t interact with the product in person. 9% of goods purchased are returned to stores, while at least 30% of online orders are returned.

Convenient and easy return policies sway customers to purchase. 2/3 online shoppers say they would buy more if returns were free, and 63% of online shoppers check the return policy before buying.

Because the return policy is a factor when consumers are deciding to purchase, if you don’t have a proper one in place to refer to, you could lose potential customers. There are many reasons why customers return items purchased online — the item is damaged, it’s not what they expected, or if it doesn’t fit. Regardless of the reason, if consumers can’t return the items to you, they may initiate a chargeback and go straight to their credit card company to request their money back, which translates to lost sales, potential fees, and brand damage for you.

What to consider when crafting your return policy

Time period

Consider the time period that you want to allow for returns with your product in mind. The common return policy period ranges anywhere from two weeks to three months but items like perishables, intimates, or sale items are usually final sale.

There are different return policies across the retail industry. On one end of the spectrum are retailers that allow for returns without restrictions – anywhere, anytime, and in any condition. On the other end are retailers that have a 14-day “exchange only” policy.

If you have an online and offline presence, consider whether it makes sense to unify your return policies for both channels; it can help you provide a cohesive overall experience.

Proof of purchase

Next, you have to decide whether you will only accept returns that are accompanied with the original receipt. Some retailers don’t require them at all, while others not only require receipts but photo ID as well. Asking for a receipt gives you a way to verify if it’s your merchandise, the date, and the cost. This requirement prevents thieves from stealing merchandise and returning it for money (return fraud).

State of item

Determine the condition that you’ll accept returns. Most retailers only accept items back if they’re unopened and with original tags. However, keep in mind the nature of the products that you’re selling as some products like makeup and electronics need to be used before the customer decides if they want to exchange it.

Fees

You have the option to charge customers restocking, reshipping, or repacking fees when they return an item. For online purchases, decide whether the customer will pay for return shipping or if you’ll provide a shipping label. If you do decide to charge these fees, ensure that the customer knows.

Ease of return

Online returns are often trickier than in-store ones. If you’re an eCommerce merchant, make sure you state the procedure to return items clearly and succinctly on your website. Do they have to fill out a form with their reason for return? Do they have to print out a shipping label? Make it as easy as possible for customers to return items – remember, it’s a contributing factor to whether or not they’ll purchase from you. If you’re a multichannel merchant, consider allowing customers who bought products online to return them to their local store. Another option is to offer a loyalty card, much like beauty behemoth Sephora, that records your customers’ transactions, eliminating the need to keep their physical receipts.

Method of refund

Lastly, you have to decide how you will issue the refund. Often, businesses issue the return in the same method that it was purchased, others only offer store credit.

Implementing your return policy

Be clear

Use succinct language when it comes to writing your return policy. Think about your brand voice and ensure your return policy aligns. It can be serious or quirky – just so long as it’s clear and concise.

Publicize your return policy

Once you’ve finalized your return policy, make sure it gets read. Put it on your front counter and on customer receipts. For eCommerce stores, make sure it’s in your navigation menu, emails, and even social media pages. Include printed copies of your return policies and shipping labels if needed in packages.

Train your staff

It’s good practice to train your staff to let people know about the return policy and whether the item they’re purchasing is final sale at checkout. This preemptive measure on top of making sure your policy is visible helps make sure customers know what they’re getting into when they buy.

Taking these steps to crafting your return policy will help you reduce resources spent on customer service, save you from potential chargebacks, and increase your loyal customer base.

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