With the largest quantity of returned merchandise rolling in just after the holidays, now's the time to make sure your guidelines for returns and refunds are thought-out and clear. To refresh or reconsider any aspects of the current policy before the year ends, mull over these suggestions and concerns.
Why your return policy matters
While you may be thinking about returned merchandise in terms of your lost profits and bottom line, your customers are likely tuned into another aspect of the process. According to TIME magazine, consumers view a strict or sneaky return policy as a blow to their trust and relationship with that store. The source explained how retailers have always focused on the customer service they provide before the sale is made, but fewer pay attention to the way employees interact with shoppers during returns.
From a store's perspective, it seems best to limit returns because it can become expensive, especially when people make fraudulent returns. However, Inbound Logistics recommended finding a way to retrieve the most value from each return without creating a hassle for customers. The key is striking a balance between a return policy that's too lenient, resulting in an abundance of returns, and guidelines that are too strict and cause a decrease in customer loyalty or sales.
What you should be considering
- Length of time: Each store can determine if customers need to complete returns within a week, a month or have an unlimited amount of time for the transaction. According to Entrepreneur magazine, a 30-day return policy is average while permitting 60 days is a generous choice. Using a 90-day return policy can set you apart in the market, the source explained. However, many businesses extend the window for refunds during the holiday season, since people often return gifts they received.
- Omnichannel issues: If you sell merchandise online as well, you need to consider how this impacts your return policy. Consider if there's room on display tables for items that were purchased online or if they must be shipped back to the warehouse. For online orders, you may want to include a shipping label to make the return process easier for customers.
- Valid reasons for return: Are returns only granted if the items were damaged or misrepresented? In other words, are refunds only allowed just when the reason relates to a mistake on the store's end? If so, you may also want to allow shoppers to return items that they changed their minds about or that didn't fit.
- Compensation: Do you want people returning merchandise to receive a full refund? Will the money go back on their credit cards or are they exclusively given store credit? These are key details to nail down and make clear to avoid frustrated customers.
- Visibility: An important part of keeping your customers happy regardless of your return policy's specifics is transparency. You should have a sign in your store displays that details the policy and a sentence or two on the receipt that explains the rules. It's also helpful for employees to state the policy when they're ringing up purchases for shoppers. If everyone is aware of the set guidelines regarding returns before they make a purchase, the extra information could prevent any disagreements about refunds.