30% of all products purchased online are returned as opposed to the 8.89% of returns that happen at brick and mortar stores.
An unfortunate side effect of running any kind of business is understanding that customer satisfaction is never a 100% guarantee.
However, introducing firm but fair customer service policies in regards to a return will help your client understand and trust your business.
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What is a Return Policy?
A return policy is an enforceable document that must be present to protect your business and offer clear information to your customers.
Retail merchants follow a hard set of rules which outlines the organisation’s policy to deal with customers returning previously purchased items.
Return policies exemplify the customer service approach a business decides to take and are often mandated by the law.
Oftentimes customers feel entitled to a return after purchasing a product unaware of the extensive back end activities delivery takes.
This was due to a dated practice of retailers guaranteeing a full value return if a product did not meet the buyers’ expectations.
While this was a noble stance to take, it does not make business sense. It worked as the ideal set up for businesses to be taken advantage of with policy misuse.
It is up to the business to establish the circumstances under which returns are valid, and the procedures to address a return request.
If you introduce too many lax terms your business will be swamped with unwarranted returns.
And a policy too strong could discourage customers from shopping with you again.
Big box retailers can afford more relaxed policies as their income is contingent on high volume sales.
The Return Policy Framework
Giving your customer a quick solution to a concern allows them to move on to the next purchase with assurance and trust.
Growing businesses should instead look to introduce policies that offer conflict resolution without incurring unproportional disadvantages.
Balancing customer satisfaction and business practicality should be the foundation of any return policy implemented by a business.
Building your return policy framework is heavily contingent on your business ideals.
However, the core should revolve around making your customer feel safe with every transaction.
Here are 8 steps you can take to build the best return policy for your organization
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The Power of A Good Policy
A well thought out return policy framework could act as a star player to boost customer service and marketing credibility.
If you build a policy you can stand behind confidently, ensure you have the information on display within the first few interactions customers have within your eCommerce space.
A crystalline and fair return policy, in cohesion with the terms and conditions page offers customers a clear picture of engagement terms.
Ensure the foundation is centered around customer satisfaction for a powerful branding aid.
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Easy Accessibility
If your returns policy is not easily accessible, it is as good as not having one at all. When you offer information gaps to your customer, you are less likely to build credibility.
Introduce a link into the footer of your webpage for quick and consistent access.
For added visibility to your returns policy, introducing a link below the “add to cart” button could push customers into viewing the framework.
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A Discussion, Not A Demand
The premise of a sale is a willingness to possess the object listed on your page. Using language that encourages the completion of a transaction rather than creating a stick in the mud impression boosts sales.
Ensure policies are always “firm but fair”. Avoid using words like “must”, “required” and “not responsible for”.
These words create an impression of a lack of care and trust in your products.
If your policy sounds like completing a purchase is a gamble, you are unlikely to win that customer.
Kindness costs nothing but can be everything in a customer service environment.
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Clarity Is Key
Keep your policies as simple to understand as possible. Introducing complex, interconnected processes will discourage a return and gain your business a recurring customer.
Your policies must address the following;
- How long does a customer have to initiate a return process after confirmed receipt?
- What are the circumstances under which a product can be returned? Can a product be returned if the client is unhappy or changed their mind about the purchase?
- If the product differs from the original state it was received in i.e. packaging damage, will the return still be processed?
- Who covers the cost of the return? Will shipping fees and transaction costs remain with the original transaction or will a second set of fees need to be paid? If so by whom?
- If the error lies with the business (a wrong color, size or damaged product sent), how does the company intend to remedy this? How quickly will they send a replacement or alternative product? Who covers the costs?
- Does the buyer have the flexibility to exchange a product for variants? If there is a difference in the pricing, how is that addressed?
- Is there a refund policy offered with the return? How are customers compensated?
Additionally, clarifying how refunds are initiated is extremely important. If a product passes the criteria for a return, how do customers get in touch with the business to move this process along?
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Centralized Communication
Ensure your team has clarity on the policy information. This reduces confusion when one employee communicates with the customer to resolve the problem but another handles the actual processing.
Standardized practices no matter who your customer communicates with helps build credibility and trust while minimizing the time spent to process the request.
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Made A Mistake? Fix it.
There is no guarantee 100% of the orders you fulfil will be correct to customer specifications. Use instances of human error occur within the organization as an opportunity to highlight your elite customer service.
Accept the mistake and act flexibly with your returns policy. Perhaps it states that customers send back products to be eligible for a refund.
If the mistake lies at the back end of your organization, bend the rules to compensate accordingly. While this is not a necessary component of the policy itself, it is a helpful problem-solving mechanism.
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Plagiarism is Wrong
Do not copy-paste policies of a competing business. Copying the policies of a business that has nothing to do with your space will result in a framework that makes no sense. Introduce a template and work it around your business.
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Examples Are Helpful
Introduce a pictorial depiction of your return policy to help customers understand exactly what your system looks like.
An example of a successful return case gives context to your customers and helps them understand when to return a product. It is always best practice to have mechanisms to build credibility and trust with customers.
Types of Return Policies
Once you’ve established the circumstances for a valid return, the next step is to create an action plan.
Exchange Only
When customers initiate a return request businesses offer them a replacement product in compensation.
This only works if the customer was provided with a faulty product or claims return under warranty.
The only cost to the company is the additional product and logistics that could be covered by the initial sales revenue.
Store Credit
When a customer sends back a product they are unhappy with, businesses compensate the customers with “credit” equal to the product retail price.
The credit amount usually covers only the amount paid for the product and does not include reimbursement of logistic costs.
This involuntary customer loyalty mechanism may not work for clients that have had an obtusely negative experience with your organization or if you offer only one type of product.
All Sales Final
This is standard practice for businesses that offer bespoke or made to order products.
With a policy so stringent, the business must ensure it’s customers understand that they cannot return a product after purchase or after the product is dispatched.
However, if quality standards are not up to par, this policy will eventually but rightly so hurt the brands reputation.
Complete Refund
This is the most customer-friendly approach to return models. Offering a complete refund is full compensation of the transaction fee.
A vendor initiated refund, in the case of credit card transactions, helps customers invalidate their unhappy purchase at no additional cost.
However, the business absorbs back end transaction fees.
Restocking Fees
Businesses looking to minimize the negative side effects of a refund can offer a restocking fee clause in their returns policy.
You can offer a clear disclaimer to customers outlining returns at 10-20% of the value of their item to cover costs associated with conducting the return.
This includes processing charges and logistic fees. Companies that charge restocking fees normally do so for customer discretion based returns rather than returns due to defective products.
VARStreet’s RMA Feature
The VARStreet Return Merchandise Authorization feature on their eCommerce stores allows users to handle returns and refunds on their online VAR store efficiently.
Due to the nature of the IT VAR industry, which is predominantly VARStreet’s niche, the returns and refund initiation on an eCommerce store is not the most straightforward.
VARStreet identified this obstacle that VARs faced and has an RMA functionality that gives VARs multiple options to manage returns as per their business needs.
The eCommerce platform supports fully automated, a form-based semi-automated or manual RMA handling with the option of requesting a call from a sales rep to initiate the return.
Examples and Impact of Return Policies
Glossier
A niche, US-based skincare company that focuses on simple and easy to use formulas. Their return policy consists of simple terms and solutions.
Using easy to understand language helps build trust with native and non-native language speakers. Customer frustration becomes minimal because Glossier has clearly mapped the return process and is simple to execute. Keep in mind, customers come from around the world, the easier your policy is to translate the better.
Red Oxx
The US-based bag and accessories manufacturer introduced a lifetime warranty concept to their return policy page;
‘The Red Oxx Lifetime Guarantee is completely transferable for life. We cover all bags and accessories made by us (both custom and mass-produced), at any time in our history, regardless of how they were obtained – gifts, second-hand store, eBay auctions, hand-me-downs, custom work and modifications done by Red Oxx, etc. Our “No Bull” Lifetime Warranty is, in a word, unconditional!’
The lifetime warranty on items means the concept of returns is as simple as the customer expressing unhappiness.
While this pushes trust behind the quality of the product and the commitment to customer satisfaction, it could prove expensive with a faulty batch.
eBay
The worldwide marketplace that lets independent sellers get in touch with a large client base offers the option to create custom return policies for your store and also a money-back guarantee.
Eligibility is contingent on;
- Receiving an item that deviates from the item description
- When an item is not received and this information is conveyed within 7 days after the specified timeframe if the seller is in the same country, or within 30 days if the seller is in a different country.
With a wide array of sellers available on the platform, eBay was smart to institute a policy that protects customers from poor facilitation provided by the website.
This customer-first framework keeps buyers safe while they indiscriminately explore various sellers.
Conclusion
Building a return policy may seem like a daunting task but focus on developing policies that are fair, even generous to your consumer, while keeping back end costs in mind.
This offers a balanced perspective on your policy approach. It lets customers know they are important and reiterates a brands confidence in itself to not make a mistake.
The returns policy is a contingency plan and a non-negotiable part of an eCommerce store. Take your time building a policy that fits your organization just right.
