Refunds, Returns and Replacements
Returns and refunds are a fundamental part of running a business: it’s inevitable - from faulty goods, unwanted gifts, an incorrectly-sized item or simply buyer’s remorse, customers have a multitude of reasons for returning items or expecting refunds, exchanges or in-store credit. With 30% of products ordered online returned, compared to 8.89% in physical shops, it’s something you can’t ignore. But it doesn’t have to be a negative experience.
Having a clearly written and implemented returns policy to deal with these situations quickly and fairly will be a win-win for both you and your customers. In fact, getting it right can help boost customer satisfaction and loyalty, ultimately leading to more sales in the future.
In this article we’ll talk about why you need a great returns policy and how to put one together that benefits your business and your customers.
How Returns Can Affect Your Business
Refunding your customers costs money, and the knowledge that a customer didn’t like your product can be difficult to deal with. But if not addressed properly, the issues can mount up. Bad reviews can damage further business, especially if they start to appear on your Google listing or on your social media accounts.
Every business has to deal with complaints, but if a trend of dissatisfaction emerges around a contentious topic like how you deal with returns, eventually you will see a drop in conversions.
Advantages of A Good Returns Policy
Your returns policy and processes can impact customer satisfaction for better or worse. The overall experience can influence whether or not a shopper will buy from you again.
It can be thought of as an extension of your business and as such, should be representative of it. Not only is it a method to explain your return requirements and process, but it’s also a means of making a good impression and laying out how you value your customers.
Even if someone is unhappy with a purchase - the handling of the situation is what the customer will remember and what could mean they buy from you again. It can show you pride yourself on great customer service.
Remember the policy needs to work for you as well: ASOS recently amended their policy because of ‘wardrobing’, a practice in which serial returners were buying clothes with the intention of wearing them once before sending them back.
Finally, a good policy increases trust if it is clear and easy to find. It could be the final thing to make up the customer’s mind and bag you the sale!
How to Write a Great Returns Policy
- Use simple language
Keep the language simple and jargon-free. Write your policy so it is clear and concise, and make sure it is not ambiguous.
- Keep it positive
Avoid terms like ‘you must’ or ‘we are not responsible for’.
- Make sure you can honour it
For example, are timeframes realistic? Make sure you’re logistically able to deal with the Black Friday and Christmas periods - January 2nd has become known as ‘National Returns Day’ and is a busy time for gift returns!
What Should You Include In Your Returns Policy?
Here are the top 10 things you need to make sure are covered in your returns and exchange policy.
1 How does the customer start the process?
For example, do they email you or is there a form they need to fill in?
2 Packaging
Can they use their own box to return the item or will you send them something to use?
3 Do you offer exchange, refunds, or in-store credit?
Exchanges are better than returns and refunds for your business, from a financial point of view. However, this may not always be possible. If customers don’t want an exchange, store credit is the next best option for you.
You may have to accept though, that sometimes you will simply have to refund a customer. While this is financially the least attractive option for you on the face of it, it can keep the relationship with the customer strong, and hopefully their future business will still come your way.
4 Clear timeframes for returns
Up to 30 days is standard, but some policies go up to 90 days. Particularly during the pandemic, which has seen delivery logistics impacted, it might be better to have a longer period. (Some businesses also extend the returns period during the Christmas break.)
5 Define product condition requirements
Specify the rules around returns, exchanges and refunds when it comes to used or damaged goods. Different circumstances may require a different approach from you.
6 Define any costs
Will the customer have to pay to return the item? Will you send them a return label to make it easier for them to send back to you?
7 Are there any documents the customer needs to send back with the item?
Will the customer need to include a receipt or other proof of purchase?
8 What are the timeframes to process the refund or exchange?
Make sure expectations are set from the very start to avoid any confusion.
9 Ensure you include clear contact information
Making it easy for the customer to contact you builds trust and helps to reassure the customer that you’ll be available to deal with any issues.
10 FAQs
It’s a good idea to link to an FAQ page that answers any secondary or specific questions that customers may have.
To get you started, there are lots of sample returns policy templates that are free to download and use.
Where Should You Display Your Returns Policy?
1 Make sure it’s clearly signposted on your website
67% of shoppers check the returns policy before purchasing so make sure they can find it!
2 Make it clear throughout the customer's journey to purchase
A sensible place to display it is in your sitewide footer and in your FAQ page, plus highlight it during the purchase process - on the product pages, in the cart and in the checkout.
3 Make it clear for customers post-purchase
We would recommend including the policy in the purchase confirmation email.
4 Use a physical reminder
Some businesses also send a physical copy with the item but this might not be considered an environmentally friendly approach.
Essentially, your returns process should be as easy as when the customer bought from you in the first place. 92% of customers said they would buy from a retailer again if the returns process was easy so it is in your best interests as a business to make it as robust, clear and customer-centric as possible.
Make Sure Your Actions Reflect the Policy
Logistically, you need to make sure that you can effectively deal with returns, especially as your business scales. Customer returns management functionality can be useful here and can make the process easier for your customers as well as your staff. There are lots of examples of plugins in the Shopify App Store that can help. One we like is Clicksit, a free returns management app. It improves the return experience by giving customers a self-service portal, sends pre-paid labels and tracks your returns.
It’s also key to make sure everyone in your business understands how returns work - clarity with your staff will make it easier for them, as well as the customer.
Finally, If you’ve made an error, it’s important to own up to it and put it right. The mistake is not necessarily the issue: it’s how it is rectified. In fact, research has shown that poor experiences handled well makes customers more loyal than had there not been a poor experience in the first place.
Remember: a good returns policy can keep your customers returning!
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