How To Create A Return Policy For Your eCommerce Store In 5 Easy Steps
You have a great product, and you’re ready to start selling it online. Or maybe you already have an online store and it’s time to take your sales from “good” to “great.” So what’s holding you back? When you think about the fundamentals of eCommerce, it’s easy to put your focus on the “e,” which of course stands for electronic and means online. However, you also need to pay attention to the other part of eCommerce: the fundamentals of sales that are true for any type of commerce. And trust is perhaps the single most important basis for any type of sales.
Whether you’re selling in person, face to face, or online through unlimited computer screens across the globe, the way to get customers to buy from you is to convince them to believe in your product and trust in you to deliver it. Paradoxically, a customer-centered return policy is one of the most important signals online sellers can send to show customers they can trust you to deliver a quality product or service. Make it known that you’re willing to back up your promises, and if you fall short in any way, give your customers the option of sending items back to you.
Of course, before you invite returns, you should be sure you’re offering the right products to the right buyers at the right price. A high return rate might be telling you that you need to reevaluate one or more of your sales fundamentals. Read our free ebook on eCommerce fundamentals for more information.
Table of Contents
Why Return Policies Are So Important
Sellers’ resistance to a generous return policy often boils down to one thing: the fear that customers may abuse it, potentially costing you money. Would it put your fears to rest to know that in a recent survey, the top reason for customer returns was product defects? That’s right. While 42% of those surveyed said they simply changed their mind and didn’t want the item anymore, a whopping 59% of shoppers who returned items did so because something was wrong with the product. Another 29% said the product didn’t meet their expectations.
Like all sellers everywhere, in whatever format, you bear the responsibility for providing usable products, in good condition, that meet your customers’ expectations. When you think of your online store’s return policy in that light, you may start to see why a generous and clear return policy makes good business sense.
How To Create A Return Policy
Before you start to create a return policy for your online store, take a few minutes to identify your top competitors or some merchants you wish you were competing against. Then check out the return policies they list on their websites. That’s what you’re up against.
Let others’ return policies inspire you as you create your own. The keyword is “inspire.” The words you use should be your own. That said, you can use these steps as guideposts. Although the examples are from large vendors, the spirit of these return policies, if not the actual details, can apply to vendors of any size.
Step 1: Express Your Gratitude.
You’re probably not going to write off a customer forever just because one particular order didn’t work out. If that were your intention, you wouldn’t be looking for help creating a return policy. Your policy should start with a simple acknowledgment of your relationship, your regret that this sale was unsatisfactory (for whatever reason), and your hopes for future opportunities to deliver.
Step 2: Explain Any Limitations
If you are selling different types of merchandise, you may have reasons why some items are returnable while others are not. An unopened package of handmade greeting cards is one thing, for example, while an unwrapped chocolate bar is quite another. Maybe you can offer only exchanges on some items, instead of returns. If you make that kind of reasonable distinction between any of your products, state the facts clearly. Look at this example from video game and accessory vendor GameStop, which lays out some distinctions using clear language. Be sure to state a time frame for returns, t00. Outdoor vendor L.L. Bean famously offered full refunds forever until recently — you’re probably not able to be quite so generous, but you can set a reasonable time, like GameStop’s 30 days, that allows customers flexibility while helping you manage your inventory.
Step 3: List The Steps You Want Customers To Take
Let’s say a customer orders something from you, receives it, and needs to send it back. What’s the first thing you want that customer to do? List the steps you would like the customer to take: call you, go to a specific webpage, request authorization, put it in the return mail, etc. There’s no right way to do it, so outline a process that works for you. The only big mistake you can make is to not look at the process from the customer’s point of view. It’s not reasonable to expect them to progress through 17 steps and wait seven to 10 days for approval at each stage. Look at the following example from WalMart.com. Notice how it lays out just a few simple steps and tells the customer exactly how to move through them.
If you need any special information from the customer, be sure to explain that, too. You likely have the order information in your system already, but if you need anything specific, like a receipt or the original packaging, or a particular method of payment, let customers know upfront. Setting clear expectations lets you avoid back-and-forth exchanges that can lead to frustrations on both ends of the transaction.
Step 4: Explain How Customers Will Get Their Money Back
You have told customers what items you can accept for return and what they need to do to initiate the return and get the merchandise back to you. Now comes the important part, from their perspective: the refund itself. In general, the seller has two options. You can offer the customer a credit against a future purchase, or you can issue a direct refund. No surprise: Customers prefer receiving a refund. If there’s a good reason why you can’t offer that, say so clearly on your product pages and order forms so there’s no unpleasantness later.
Two other unpleasant surprises customers won’t like finding out about when they initiate a refund? Restocking fees and the costs of shipping a return to you. If you are able to eliminate those, you may be repaid in customer loyalty and future orders. If you need to charge customers for either or both, make sure that information is stated clearly and unequivocally when they order from you.
Step 5: Plan To Stay In Communication
It’s scary for customers to drop off merchandise they’ve paid for. They can easily feel out of control. Set them at ease by building in devices to keep them in the loop. Can they track the return through your system on their own? Can you send them an automated email when you receive the shipment? Create a notification stating how long it should take to process their refund or issue the credit they’re waiting for. Definitely let them know when you have processed the return and issued the refund. Staying in touch is the best way to reinforce your relationship and hopefully build on it in the future.
Five Tips For A Great eCommerce Return Policy
Assuming your products are 100% equal in quality, price, and availability a clean, clear and reassuring return policy could be what makes the difference in a customer deciding to buy from you and not a competitor. Keep the following things in mind when crafting your return policy:
View Returns As An Opportunity, Not A Threat
Use your return policy to build your brand and your reputation, by highlighting that policy. Think of it as a way to build loyalty with your customers, both now and in the future. The underlying message you want to send should be something like this: “We love our customers and value your business. We believe we offer the best products on the market. If you ever disagree, please give us a chance to make it right.”
You might think that it’s not reasonable for online buyers to expect every seller to have a generous and forgiving return policy. But if even a small shop on Etsy like MinimaMaximaShop can do it, what’s holding you back? Note the use of the word “gladly” in the first sentence under this return policy. It’s a great example of how to let shoppers know you’re committed to their satisfaction.
Let’s face it, you can’t satisfy every customer, 100% of the time. And when your products leave customers wanting, it’s not hard for them to find another online vendor to step in. Conventional sales wisdom says that a dissatisfied customer who is treated fairly can actually end up becoming a loyal customer for life. So when someone wants to return an order, look at it as an opportunity to cement that buyer’s loyalty. You’ll reap not only future sales but also online gold in the form of five-star reviews and recommendations.
When you craft your return policy, start from that viewpoint. Tell customers that if you fail to meet their expectations, you want another chance. Then put in place a thoughtful return policy that will make sure you earn it.
Cover The Fundamentals
You can find plenty of examples online to inspire you as you plan your site’s return policy. Look for examples that would make you, as a customer, feel good about browsing and maybe buying. When you’re ready to hammer out your own return policy, ditch the formal language in favor of a more natural tone. Try to make your policy sound like a natural part of your website instead of something that exists to trip up casual shoppers. However you phrase it, make sure that your written policy covers these basics.
- How long customers have to return an order
- Any exceptions to your return policy, i.e., items you cannot accept
- If they need authorization to make a return
- How they can request authorization, if needed
- What condition returned items should be in
- How you will reimburse them, typically via credit or direct refund
- Who is responsible for the return shipping?
Write It Like You’d Say It
You don’t need a template or a lot of legal jargon to create a return policy. You just need to talk to your customers, using clear language that makes expectations clear on both ends. Imagine that you’re standing in front of a customer in a brick-and-mortar location. The customer has her wallet in hand and is pulling out her credit card. “Wait,” she says. “If I don’t like this when I get it home, can I bring it back?”
If your immediate response would be to say anything but “Of course you can!” and maybe add, “But I know you’re going to love it. Just keep the receipt to make it easy, in case you don’t,” you’re doing it wrong! That’s the same way you need to treat the possibility of online returns. Instead of listing a whole bunch of “don’ts,” use friendly, accessible language to list all the things you would like customers to do to help you make returns run smoothly. For example, your policy might list a few details like “We want you to love it. If you don’t, let us know right away. Please keep your receipt and the original packaging to make returning it easier.”
Be sure you don’t ask customers to jump through too many hoops. Studies show that restrictive return policies can keep customers from clicking the Purchase button on a website. If you plan to charge customers restocking fees, make them pay for return shipping, or allow them an unreasonably short time for returns, you may cause them to abandon their shopping cart before checkout — or worse, never put anything in their carts at all.
Build An Awareness Of Returns Into Every Page Of Your Website
Building your brand online — and boosting your sales — gets easier when you can build a solid base of repeat customers. It’s so much easier to make repeat sales than to continually search for new buyers! It all boils down to customer satisfaction. Remember, when you deliver quality products that meet or exceed customers’ expectations, they are likely to keep those products and then later return to your site to buy again. So make that your goal for every single page on your website: shaping customers’ expectations of your products and beating their expectations. Describing your fairly priced products clearly and fully is one of the base strategies for doing that. Top that off by letting customers know you want them to be satisfied with what they order from you.
At Amazon.com, for example, nearly every page contains a link to information about the company’s return policy. By linking it (see “Returns and Orders” in the top right of the toolbar) clearly, Amazon is letting customers know that it’s okay, returns happen, and they want to make it easy if you’re ever unhappy.
Remember: A good return policy actually can encourage customers to buy from you, because it offers reassurance that you stand behind your products and your ability to deliver as promised. If reassuring customers that it’s safe to buy from you is the goal, why hide your return policy?
Make Returns Easy On Your End
Once you’ve set a policy that works for your store and for your customers and made buyers aware of it, you need to be ready to accept inevitable returns. Depending on your sales volume, that may mean finding a software solution to make the process run smoothly. A top-rated SaaS (Software as a Service) application like ShippingEasy (read our in-depth review here) lets you choose to send pre-printed labels with every order or to send return labels to customers upon request. You’ll also be able to access discounted postage rates. ShippingEasy offers a free version for sellers who ship fewer than 50 packages a month, with paid plans ranging from $29 to $99 per month.
There are plenty of online solutions you can use to make customer returns run smoothly. And it’s worth the effort to make it easy for customers. Half of online buyers in the United States say that an easy and no-cost return policy is a major factor in their online shopping decisions. So if you want to encourage buyers to continue shopping on your site, it may be worth your while to accommodate most buyers’ desire for easy, free returns. And it’s definitely worth your while to set up a system to make that process as painless and inexpensive for yourself as possible.
Getting Started on Your eCommerce Refund & Return Policy
Once you understand that customer returns are not the threat they sometimes appear to be, you can quickly craft a clear policy that enhances customers’ online shopping experience. Be sure to cover all the basics in your return policy, letting customers know that you stand behind your products and that you value their long-term satisfaction over any single transaction. Don’t hide your policy; put it front and center on your web pages, to reassure customers every step of their shopping experience. Once you take away the uncertainty from the transaction, reduce the discomfort on your end by utilizing software solutions that make accepting returns as easy as possible. Adapt and adjust as necessary to make sure your return policy both increases customer satisfaction and boosts your sales over the long term. A customer-centered return policy should deliver on both those goals.