return policy

The Basics of Creating a Useful Return Policy for E-Commerce Growth

If you run an e-commerce business, know that your return policy tells customers how much you’re willing to work with them if something goes wrong. Policies build trust and help people know they’ll be taken care of, or if their frustrations are going to be ignored. Return policies tell customers how much you value them and the service you’re willing to provide. That means a good policy can increase reputation and sales, while a lousy policy can lead to revenue losses. If you get it right, you can even use returns as a marketing tool by showing how satisfied customers are and how well you help.

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To master the return policy and learn how it can even boost revenue, let’s look at what makes a good policy and the elements to consider within it:

It might be the law

Return policies usually start by focusing on the intersection with you and your customer, but there’s another critical juncture to consider: your business and the legal requirements of selling products. In many states, there are returns and refund laws, as well as some federal policies. In most cases, you need to have a return policy.

More often than not, your customers usually have three days to change their mind about a purchase, and you’ve got to accept returns for defective merchandise. Start by learning what’s mandated.

Keep requirements clear

Once you understand what is required of you by law, start to flesh out what you will require of customers and the products sold.

Define what you will and won’t take back, as well as what customers need to make a return. For example, you might not accept returns for anything that’s opened but is working correctly. Customers may need to return something within a certain number of days or contact your support team first. Make everything clear and as inclusive of all types of products you sell.

Don’t hide your policy or make things difficult to understand. When you’re clear, customers know what to expect, and it can positively impact how they feel about your business. Plus, it limits the risk of customer service interactions in which someone is upset that they misunderstood your returns requirements.

Simplify the label process

One of the best things you can do for your customers is to make return shipping easy. Stand out from your competitors by automating elements, especially creating return labels. Build out a section of your website or use your e-commerce and order management software to allow people to see orders, select what they’re returning, and click to create and print a label.

Doing so removes a lot of the headache and can turn a typically arduous process into a positive experience. Customers will be relieved that the process is simple and may even be more likely to buy from you again. Reducing stress around returns can also make customers more willing to accept things like store credit.

Give yourself a more significant boost by also making returns free. A free return is generally easier to automate with software and platforms, plus it’ll make your customers feel more comfortable with the process. But first, ensure you can afford this. If you’re concerned about it, try baking in some potential returns costs into product costs or require a specific order value for a free return.

Related: How to Make Passive Income with a Dropshipping Store

Make it easy to find

After your policy is created and added to your website, find ways to link it to every page where you provide company information and where you offer products. You want your return policy (or at least a link to it) to be visible at any given moment, because it builds trust and reassures your audience about their potential purchase.

If you think your policy is simple and effective enough to be a competitive advantage, go beyond just an FAQ page and create a small blurb that you can put near the footer of sales pages. If you’re adding a chatbot for 24/7 sales and customer service support, teach the bot about your returns policies. For complex policies or those with restrictions, help your bot learn how to state the broad elements and then specifically call out that customers should read the entire policy.

Follow the strong UI practices you’re already using for your site to keep the policy visible.

Test and demonstrate

Don’t get stuck with a theoretical policy that fails in practice. Create your return policy and thoroughly test it as a regular customer would use it.

Make a purchase. Follow the steps for the return. Then, monitor your return to ensure that you get all the right emails and communications for labels and more. See if you get the right confirmation and how long it takes for money to be put back on a card or for a returned item to be sent. Repeat this a few times for products that can and can’t be returned. Test the system out to see if procedures are followed correctly.

After you’ve tested your return policy and are ready to roll it out, highlight this experience for your customers. Showcase how they’ll return something and what the process looks like. Not only do you want an explanation, but a visual can help significantly, too. Illustrating the process makes things a lot easier for people to follow and often makes them feel more comfortable.

Work with customers

The returns process is often stressful for everyone. Customers will be upset that something didn’t fit or arrived broken. You’re frustrated because there’s a potential revenue loss, and warehouse and sales teams have more work to do to get back where they were.

Take a minute to help your customers out and try to create a positive experience. This isn’t a defined part of the strategy you put in writing, but a company cultural element. Give your service team steps and actions to engage with customers in order to try to make things right. If you make a mistake or an accident happens, try to resolve things as seamlessly as possible.

Discounts, coupons, credit and freebies can all be robust tools to make up for a mistake. And, as you likely know from your own experience, few things are more helpful than when a company admits a mistake and apologizes without causing a fuss. Handle things right, and your customers are likely to reward you.

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Why do it? More sales

While there’s a lot of customer service focus when it comes to a return policy, you also have some solid business cases to make for creating a good one.

The best business reason for spending time on returns is that they can generate better sales and revenue for your business, even when customers use the policy. If you make returns simple, most customers will buy from you again.

A 2019 survey by UPS found that 73 percent of those surveyed said that the returns experience impacted whether or not they would buy from a retailer again.

Since we all know that it’s easier and more affordable to get a repeat sale than find a new customer, helpful and stress-free returns policies can have a significant impact on your growth.

Similarly, a ReBOUND study notes that customers who have negative experiences during returns are less likely to shop with you again. And the younger your audience, the higher likelihood that a poor experience will end their shopping.

Key takeaways

Return policies are just one way in which customers will interact with you. It’s a customer service opportunity, creating risk and potential reward. Build a policy that’s easy to understand and find, and your customers will appreciate it.

Making returns easy to accomplish can go a step further and help people come back to buy from you again. Think of it this way: build the policy that you’d want to use next time you have to return something.

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