A solid ecommerce return policy can make or break a sale or turn a visitor into a customer for life. One of the biggest contributors to a sale is how you deal with a potential buyer’s common questions, especially regarding what you’ll do if they don’t like what they purchased.
In a survey by comScore and UPS, 63% of American consumers check the return policy before making a purchase and 48% would shop more with retailers that offer hassle-free returns. These policies can have an even greater impact on international consumers, most notably in Germany where 72% of consumers would give more business to stores with hassle-free returns.
Consumers have been trained to be more cautious when it comes to buying online. Not only are they incurring the additional shipping costs, but they also are not able to interact with their purchase in person as they would in a physical store.
A clear returns, refunds, and exchanges policy shows that you, the ecommerce business owner, stand by your product, and pride yourself on a stellar customer service experience. It is one of the many “wow” factors you can provide shoppers who may be a little concerned about buying online rather than in person. Plus, looking out for your customers is just good business.
Refund & Return Policy Template
Discover how to create your shipping and returns policy, including:
- General guidelines
- Items to address
- How to roll out your policy
- How to remain competitive as a small business
Providing a comprehensive policy for returns and exchanges instills confidence in you, your business and your products. And trust has a huge impact on your bottom line. One study featured in the Journal of Marketing found that customers who received free shipping on returns increased their purchases over the next two years by 58 to 357%.
Developing a comprehensive plan can actually reduce the resources you spend on returns and keep your customers coming back. Even though the customer may not be satisfied with their original purchase, handling the return professionally will ensure their continued patronage.
Loyalty is earned by providing an awesome experience even when your product or service wasn’t a perfect fit.
How to Write a Great Returns Policy
When it comes to updating or even adding a returns policy to your site, there are a few best practices to abide by. We’ll outline these below, but we’ve also included some additional tips and tactics on what to include.
This is a potential differentiation factor between you and your competitors. Be sure you offer the better customer service experience from beginning to end, starting with ensuring they know your policy and ending by living up to your customer’s expectations of your promise.
- Don’t hide your policy. You customers should never have to go on a scavenger hunt to find information on your store. Keep this in broad daylight on your main menu. Or, if you’re comfortable, shout it from the rooftops by placing it in places like your carousel and banners throughout your store. But, the best place to put an ecommerce return policy is in your confirmation emails on purchases. Let those who have already bought know that you are dedicated to them liking their product, and that if they don’t –– they can always return it. Being your customers biggest advocate is a great way to foster lifetime loyalty.
- Never (ever, ever, ever) copy and paste. This goes for nearly anything on your site (especially product descriptions), but a returns and exchange policy is not a one-size-fits-all scenario. Personalize it to your specific business and target audience. Make this a fun page to read and reiterate your commitment to your customers. Include, if possible, customer reviews of the experience as well. Use this page as a testimonial spot on your site –– one that you can use to prove to potential customers that not only do people love your products, but that even when they don’t, you still treat everyone with respect, dignity and fairness.
- Use plain English. Yes, you want to talk to your target audience, but avoid using words that send people running for a dictionary. You don’t want to confuse anyone –– especially those Google bots that can help boost your SEO. Use keywords. Reiterate your promise. Incorporate real customer feedback. Rinse. Repeat.
- Avoid the scary stuff. Try not to use phrases like “you must” and “you are required” or, one of the worst, “we are not responsible for.” Long story short, make your returns process easy. In fact, your returns process should be just as easy as it was to buy the item in the first place. Don’t offload the issue on the customer.
- Outline what they can expect from you. Do you exchange, offer store credit or return their money? Every merchant has their own preference, and you shouldn’t feel pressured to offer only a full refund. Determine what works best for your unique business. You can even A/B test here to see which offerings your customers prefer.
- Set expectations for your customer. What’s the procedure for a return or exchange? Does the customer need to use your packaging or can they use their own? Do they need to include the order slip? Is there a limited time in which a return or exchange can be completed? Who pays for shipping? You or your customer? Outline the specific process and guidelines. Make your ecommerce shipping policy and returns understandable and straight-forward.
- Educate your staff. Make sure all employees are up to date with your return policy and procedures so they can assist customers quickly and effectively.
- Be prepared to eat the cost of your mistakes. If you messed up, be honest and make it right. If you shipped the wrong item, or packaged it poorly, you should be willing to make it right no matter what the official policy is. We all make mistakes, it’s how you handle those mistakes that matters.
Finally, don’t forget to play fair. If you make a change to your policy, be sure to honor the old policy if an order was placed before the change took place.
What Great Returns Policy Looks Like [10+ Examples]
And if customers are hesitant about a purchase, they want to know that your brand won’t make returning something difficult.
Great refund policies encourage customers to commit to a purchase, and allow them to shop without fear of consequence.
Zappos is a great example of a return policy gone well. Their willingness to accept refunds and excellence in communicating that policy means they make fans for life.
“Our best customers have the highest returns rates, but they are also the ones that spend the most money with us and are our most profitable customers,” says CEO Craig Adkins.
A good return policy doesn’t just reassure your customers. Writing and displaying a clear policy also reduces the time spent processing returns, meaning it’s great for your staff too!
If customers know what to do and where to go, you’ll spend less time dealing with returns, and more time making them happy.
Here are 10 tips to help you create a return policy that builds trust and make customers for life.
1. Embrace the bigger picture
“As a business practice, it’s expensive. As advertising, it’s cheap.” – L.L. Bean
The first step of writing a great refund policy is to stop thinking about returns solely as money lost. The return in investment is much more than just the lost value of products returned.
L.L. Bean has fully committed to their return policy as a value added service. Their unlimited, no questions asked policy attracts shoppers looking for high quality clothing because customers know that they will always end up satisfied.
It’s a very forward thinking policy – if their executives simply added up the cost of all the returned stock, it would likely seem a very expensive practice. However, the real benefit of an extensive return policy is the additional sales brought in by the publicity and brand perception.
Not only will a killer return policy bring in sales, interacting with customers returning products is a great opportunity to further engage your customer and earn their repeat business.
Of the 60% of online shoppers that make at least one return or exchange per year, 95% will make another purchase if the return experience was positive.
This is referred to as the “service recovery paradox.”
Surprisingly, customers that have a poor experience that’s handled well end up more loyal than they were in the first place. Giving customers hassle when they are trying to return something is more likely to deter them from shopping with you again, than deter them from the return.
Start thinking about returns in terms of the bigger picture, and you’re already halfway to a great return policy.
2. Keep it easy to understand
Why do even the friendliest brands somehow resort to legal speak when talking about refunds?
Phrases like Adhering to Policy, Under Any Circumstance, and Sole Discretion aren’t adding any legal validity to your return policy, but they are making customer’s heads spin.
For example, a Return Authorization Request (RMA) is a common term in ecommerce, but your customer shouldn’t need to know what one is to return an item.
When writing a return policy:
- Keep it simple
- Don’t use complicated legal jargon
- Maintain your brand voice
Hyphen Mattress, a trendy online mattress seller, sticks to their friendly brand voice throughout their return policy. Note their avoidance of complicated wording or limitations on the return.
I love the first point they make: if your customer is requesting a return, it means they bought something from you in the first place. And that’s something to be celebrated!
A High Five Guarantee? Man Crates keeps it simple and on brand with their refund policy. It’s not about shipping costs, RMAs or exclusions. Just call them and they will “make it right,” which is all your customers care about.
Sweet Stamp Shop’s return policy is so sweet, it’s easy to understand why their customers love them.
Embracing the same pastel colors, hearts and happiness that the rest of their online shop exudes, they walk customers through the simple process to get a refund. When you purchase from them, you’re confident that if anything isn’t perfect, it’s going to be simple to get your money back.
3. Shout about your great policy
63% of online shoppers check your refund policy before purchasing. To make the shopping experience for these customers as easy as possible, don’t make your policies difficult to find.
A good refund policy influences purchase decisions, especially if customers aren’t 100% sure at the checkout. At the very least, a return policy should be included in the main menu of your site. If you have a particularly awesome return policy, advertise it proudly on your home page.
Some might be concerned that advertising a refund policy might encourage more returns. Would you rather your customers keep a product they didn’t love, or would you rather have a happy customer with an exchange?
Communicating your refund policy, both before and after a sale ensures that you don’t have those silent, unhappy customers lurking in your reviews section. Instead you get to proactively make their day.
Shopping for shoes online always includes a bit of uncertainty, especially around fit. Lems Shoes knows that customers might be concerned about being stuck with a poor fitting pair of shoes, and makes them feel comfortable about returns immediately upon landing on their home page.
Toy Fiesta’s return policy is so good, they devote a section of their home page to it. If there’s any doubt about the purchase, customers know they’ve got options to return it with no hassle.
4. Be upfront about all of the conditions and set expectations
No one likes surprises. If there’s something your customer needs to know about returning products, make sure it’s included in the policy upfront.
It’s also important to set expectations for how quickly money will be returned or replacements sent out.
MEE Audio sets clear timelines for when the refund occurs, and even breaks down why a customer might see a delay in getting their money back. It’s much better to under promise and over deliver. If they beat their four week refund timeline, customers would be much happier than if they originally expected to get a refund in a week, and ended up waiting three.
5. Give them enough time
It’s common to limit return and exchange periods following a purchase in order to prevent old merchandise from being returned late.
It’s not always the most customer centric move though.
If you’re buying gifts, or having a busy week when your order arrives, 14 days might not be enough to time to make a decision on a return. By not rushing the return, customers will feel more at ease making the purchase.
For example, a mattress is an extremely personal decision to make. A good night’s sleep can have a big effect on your life. So imagine the concerns with ordering a mattress online without even trying it once.
That concern is why Hyphen offers such a comprehensive return policy. Not only are returns free, you can also return it after you’ve slept on it for 100 nights. They are so sure you’ll love their product, they’ve made a big gesture to build customer trust and encourage sales.
Return periods are particularly troublesome during the holidays. Take this story about a woman who bought her father a train set for Christmas. It needed to be exchanged due to a defective power switch, but because she had purchased it early in December, the refund period had passed. It’s not practical to expect gift buyers to open and test their presents prior to giving them.
To combat holiday returns, Cases.com offers an extended return period through January 15th. It’s the headline on every single one of their pages. Gift givers can shop with abandon, knowing that any gifts that don’t quite hit the mark can be returned even in the new year.
6. Reduce costs as much as possible
Returning a recent purchase isn’t a fun experience. You were excited about your new toy, and now it has to go back to the store.
When your customers are already sad, it’s not a good time to hit them with unexpected shipping and restocking fees. Customers are also wary about return fees before they even purchase.
Two out of three online shoppers say they would buy more if returns were free. If at all possible, eliminate restocking fees and be upfront about shipping charges on returns.
Austin Bazaar makes it clear that returns are totally free for customers, and if there was a mistake or accident with the order, they will even pay for the shipping costs both ways.
7. Help customers help themselves
81% of customers try to help themselves before contacting you.
Providing options for customers to arrange their own return or exchange saves them time, and it’s cheaper than staffing front line representatives to process the refund. It also reassures customers that they won’t need to jump through hoops, or argue with agents to get their money back.
Kap7, a water polo supply company, knows that their customers are too busy playing to pick up the phone and call to arrange a return. They make it easy by providing a simple form for customers to fill out and send back to them.
Using an ecommerce platform like BigCommerce allows your customers to request and submit their own returns through their account page. Keeping it simple for you and them saves everyone time and money.
8. Think “effortless”
The biggest cause of customer disloyalty is a high effort experience. A remarkable 96% of customers reporting high-effort experiences do not become repeat purchasers, compared with only 9% of those with low-effort experiences.
This applies across their entire lifecycle, from browsing to checkout, shipping to returns. Keeping returns a low effort experience keeps customers coming back in the future.
RedsBaby sells strollers and other baby accessories online, something that could be very bulky and difficult to return. That’s why they offer a concierge return service for a small price. Simply email their support team and you’ll never need to think about the return again.
Erdem offers a similar low-effort return experience suited to their target market of busy business women.
If you look at the process, it’s just two steps and they take care of the shipping. First, let them know about the return, then arrange a time for the pickup. With exchanges that easy, why not buy and try-on the whole store?
Keeping customers informed on the status of their return is also important to an effortless experience. Let them know (or provide tracking numbers) when their item has made it back to you, when the refund has been processed, or the replacement sent out.
9. Offer alternatives
A return doesn’t always need to mean a full refund. Offering alternatives is a great way to be cost efficient and make sure your customers stay happy.
An exchange is better than store credit, because your customers will have what they need. A store credit is better than a refund, because it keeps the money locked to your store.
If you are offering alternatives other than a full refund, train your front line staff on when (and how) to offer each alternative. They’ll need to be proactive about reducing refund costs while still ensuring the customer is happy.
Di Bruno Bros takes a creative approach to refunds, offering a refund, a replacement or “other arrangements,” whatever creates a win-win situation for customer and company.
10. Make sure it makes sense for you
Once you’re created your trust-building return policy, with simple language, you’ll need to gut check that it makes sense for you.
Not all companies will be able to offer a 100% guarantee right off the bat. It just wouldn’t be financially feasible to do so. Only you can crunch the numbers and see at what point the additional sales from a strong refund policy balances the lost revenue from refunds.
Dinovite offers a return policy very unique to their product. They encourage customers not to take advantage of their guarantee until a full 90 days after purchase, because it takes that long for pet owners to see the full benefits of the product. A 14 day return policy just wouldn’t be prudent for them.
Remember, your policy isn’t set in stone. You could offer a one month promotion with free returns and see how it goes. Just remember that if the policy does change, you’ll need to honor whatever was promised when the customer made their purchase.
Go forth and write.
Hopefully we’ve provided you with enough examples and tips to get your brain juice flowing on how you can build and improve your own refund policy to drive sales. You know your business best.
If there’s anything we missed, or if you have any questions, please feel free to leave them in the comments below.
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