Structuring your return policy – an essential guide
Selling products and receiving payment from customers doesn’t complete the sale process. Having worked with consumers and eCommerce platforms over the years on automated returns and complaints systems in the Nordics, Reclaimit data shows that returns are part and parcel of the sale process.
There are several instances customers won’t be fulfilled with the product or service despite its quality. Either, the customer ordered the wrong size of the item, the item(s) arrived damaged or the order didn’t meet their expectations. At this point, the customer will ask for a refund or a replacement of the item.
On the part of the business, there should at least be proper mechanisms to handle such requests. Having a clear set-out return policy in your retail store will save you from frustration, confusion, and the potential loss of customers.
A standardized return policy helps you keep track of any returned items. You can use this information to gather insights on return patterns and/or issues related to specific items or products. The retrieved information can also be used to improve your products and overall sales.
Formalizing your return policy ensures that all customer returns are dealt with in an even manner. It’s efficient and less expensive when compared to dealing with requests on a case-by-case basis.
Return policies aren’t similar and will vary depending on the products you sell and the logistics of your eCommerce store. Nevertheless, every return policy should at least cover these basics:
👉 List items that can be returned
👉 List items that can be exchanged
👉 List items that cannot be returned or exchanged (products under the category of final sale)
👉 In what condition should items be returned (i.e. with tags still on, original condition, original packaging, lightly worn, etc.)
👉 Duration of time to return or exchange items (normally 14 days in Sweden)
👉 List of items that can be returned for either a refund, store credit, or a product of equal value
👉 The procedure of initiating a return or an exchange (i.e. visiting a web page or contacting customer care through an email address)
Always remember to include exceptions in your return policy if there are any
Examples of common exceptions are:
👉 Discounted items fall under a final sale and cannot be returned or exchanged
👉 Returned items must have no visible signs of wear or use
👉 Returned items must have their tags still on and be returned in original product packaging
To complete your return policy, add the following information to make logistics easier for both parties:
👉 The time it will take for the customer to receive their refund, store credit, or replacement product
👉 Shipping fees the customer will need to pay (if any)
👉 Return restocking fees the customer will need to pay (if any)
👉 How the company handles damaged or lost returns
👉 Business contact information if the customer has any questions
Advantages of a Customer Oriented Return Policy
👉 Positive reputation
Why is it common to see brands advertise their returns as either ‘easy’, ‘free’, or ‘no-hassle’? A survey we conducted showed that 70% of online consumers are likely to shop at an e-commerce shop with a smooth and easy return process. Always remember that clients are likely to go back to brands that make them feel comfortable.
👉 Long term clients
It’s important to follow customer insights for any business. Have you followed the trends in your business? Are your customers one-time buyers or loyal customers?
A major contributor to customer behavior is the return policy. Brands with loyal customers have a customer-centric return policy while a poor return policy directly contributes to customers turning into one-time buyers.
A customer-oriented return policy increases the chances of customer retention which leads to long-term revenue growth. Our Reclaimit Survey showed that as many as 44% of online consumers have refrained from buying something online due to previous negative experiences during the return process.
Disadvantages of a Poor Return Policy
👉 Bad Reputation
A poor return policy will make your business suffer a bad reputation. Customers will leave negative feedback online that might appear on search engines, customer review websites such as Yelp, or your targeted ads on social media. Over time, this will drive potential customers away.
👉 Time Consuming
A poor return policy will see you manually process returns whilst dealing with customers on a case-by-case basis. Again, this is time-consuming and in the long run expensive for your business operations. In the absence of monitoring and optimizing returns, it will be difficult to scale your business.
Having followed these guidelines, your return policy will be comprehensively geared towards serving your clientele. Besides, it will prove that your business takes ownership and is willing to address customer concerns.
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