Polishing Your Return Policy

Here are some tips to ensure your policy is sensible and easy to understand.

by Dennis L. Prince
- Mar 07, 2014

If you're going to be selling goods then you're going to be processing returns. Even when a customer seems certain that what you're selling is exactly what they want, sometimes they change their mind.

Customer returns are just a part of doing business. The key to managing returns effectively is ensuring you have a return policy that is easy to understand and sensible to all involved.

Even if you've been in business for a while, it's a good idea to regularly give your return policy a bit of sprucing up. At least once a year, you'd be well served to give your return policy another look, give it a bit of tuning up, and ensure that it meets the needs—your customers' and yours.

Here are some tips for re-evaluating your return policy, and making adjustments that will help manage those times when a customer steps up and says, "I'd like to return this." You'll be able to smile and respond, "Of course, let us help you with that."

The foundation of an effective return policy

Customers shop where they feel comfortable and confident that they can make a change post-purchase without a lot of hassle and headache

If this is a tune-up of your return policy, it might seem a bit daunting to question it at the foundation level. Well, if your return policy is a bit difficult to manage, whether for you or your customers, then a fundamental reworking might be exactly what is needed.

The core of successful customer returns comes from the philosophy upon which it's built. Do you really want to accept customer returns? If you don't but you still have a policy, it might be a begrudging method that betrays the fact that you don't want to provide refunds or exchanges to your customers—at all!

These days, that's a self-defeating approach. Customers shop where they feel comfortable and confident that they can make a change post-purchase without a lot of hassle and headache. In fact, consumer advocate agencies caution shoppers to fully understand a business' return policies before they make a purchase. Yes, some will take advantage of friendly policies but recent polling revealed that 90 percent of shoppers indicated the importance of a friendly return policy where they shop.

As you might expect, then, hassle-free return policies actually serve to attract customers, and will usually encourage them to shop more just by knowing they can return something if need be. Of course, you don't have to open yourself to every whim of the indecisive or indiscreet customer. Even so, you should consider allowing for returns and exchanges as a showing of your care for your customers and your confidence in your offerings.

So what is the right policy?

Here's where you control the situation: The policy is whatever you want it to be. If that seems to run counter to the advice just given, it's not. Rather, it's where you balance the need to help customers who wish to make a return while ensuring you're keeping your bottom line solid days, weeks and months after a sale.

Post your policy where it's easy to find—usually at the point of entry of the shopper's experience and again at the time of checkout

So, again, a good return policy is one that's easily accessible and easy to understand for your customers before they make a purchase. Post your policy where it's easy to find—usually at the point of entry of the shopper's experience and again at the time of checkout. Clarify the following:

  • Time constraints: It's OK to indicate that returns must be requested within 60 or 90 days of original purchase, but if the customer complies with that, be ready to cheerfully help them.
  • Conditions of acceptance: Do you accept returns of used goods, or must all items be unopened, unused and 100 percent complete? State those conditions up front to avoid any conflicts later.
  • Special exceptions: Do you have cases where you don't accept returns on certain types of goods or at certain times of the year? The most common examples of this include software or other media items (they need to be sealed in order to be returned) and special sale items (deeply discounted items are often sold with a "no returns, please" policy).

You might have other conditions or parameters you want to set in managing returns (such as exchange-only items or the need for a restocking fee). Whatever you decide upon, make it clear and make it clearly visible to your customers. They'll have the opportunity to understand it before they shop and then decide if it suits them as well. Remember, it's your policy, though you'll want to pay close attention to how well it serves your customers.

Don't be afraid to make changes

To the previous point, be sure that you take an appropriately flexible approach in managing your return policy. If you've received several requests for changes, consider them; your customers might be trying to help you understand what conditions would encourage them to shop for more as well as more often.

Often, merely explaining the reasoning behind your policy is enough to help customers see it from your perspective

Also, if you find high rates of returns, take every step possible to understand why. You might need to get a bit more stringent in some areas to prevent unwanted exploitation of your policy. Whatever the situation, keep a constant pulse of your policy and how well it might be attracting (or discouraging) your customers.

'No questions asked' is a beacon to customers

As previously stated, most customers will honor their purchases without trying to make gains at your expense. If you can welcome these customers with a policy that states "no questions asked" about returns (provided it still fits within any time, condition or completeness parameters you've set), those customers will feel at ease when shopping from you. They typically want to make purchases from you but, if something isn't quite right, they don't want to be subject to harsh questioning. (Who does?)

It's OK to not accept returns

Finally, as you work to refine your return policy, understand that it's perfectly all right to indicate that returns will not be accepted… but you should explain why. If you deal in rare or one-of-a-kind items or maybe sell time-sensitive goods, it could make perfect sense that returns wouldn't be accepted. Often, merely explaining the reasoning behind your policy is enough to help customers see it from your perspective. If they have questions, answer them politely while also checking to see if you've been too restrictive (you can adjust).

The best test of your return policy is determining how many times it comes under question; it might be too stringent or simply unclear. Then again, if you seem to be accepting returns at a high rate, especially from repeat customers, then your policy might be too lenient.

The key is to watch it closely and adjust it appropriately whenever it seems to need it. Stay flexible and you'll find a perfect balance that suits you and your customers more often than not.

About the Author

Dennis L. Prince has been analyzing and advocating the e-commerce sector since 1996. He has published more than 12 books on the subject, including How to Sell Anything on eBay…and Make a Fortune, second edition (McGraw-Hill, 2006) and How to Make Money with MySpace (McGraw-Hill, 2008). His insight is actively sought within online, magazine, television and radio venues.

Opinions expressed here may not be shared by Auctiva Corp. and/or its principals.

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