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How to write an ecommerce returns policy

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Returns management.

It’s the phrase that every online retailer hates hearing, let alone thinking about. But in 2021, it’s impossible to run a thriving brand without a well-thought-out returns strategy – and this is where your ecommerce returns policy plays a major role.

Every merchant needs a comprehensive returns policy if they’re going to attract and retain customers, but putting one together is a daunting task that usually prompts a lot of questions:

We’re here to answer these questions (and more) in our guide on how to write an ecommerce returns policy – and why it’s so critical for your business to get it right.

Let’s get started!

Ecommerce: The rise of returns culture

We get it. No retailer wants to lose valuable sales. But returns are a huge part of online shopping culture – and brands need to learn how to manage returns effectively to build a successful business.

The rise of consumers ‘bracketing’ their purchases (i.e. buying multiple versions of the same item to try and return later) has set return rates skyrocketing. Categories like clothing and apparel now see return rates as high as 60%, which puts a lot of pressure on your reverse logistics.

But believe it or not, a comprehensive ecommerce returns policy is actually an advantage and can mean more – not fewer – sales. Read on to find out why.

Why having an ecommerce returns policy matters

It might sound counterintuitive, but returns aren’t necessarily ‘bad’ for business.

Why? Because the ability to return (and to return easily) is now expected by consumers – and meeting these expectations is definitely good for business.

It influences purchasing decisions

It’s common knowledge that consumers love straightforward returns – to the point that many refuse to purchase online without it.

Over half of US consumers say they won’t shop with an online seller that doesn’t offer a free and easy returns process, with a further 49% checking the returns policy before making a purchase.

So, if you don’t have an ecommerce returns policy that’s generous and accessible, this equals a lot of customers shopping with your competitors!

It fosters customer loyalty

Processing a return may be a short-term loss of revenue, but it pays off further down the road – if you make a good impression. A striking 95% of customers say they will shop again with a retailer if their returns experience was a positive one. It’s a sign of how returns have become a major brand differentiator in the eyes of consumers – and an important strategy for boosting your retention rate.

It creates a more efficient returns process

Without written guidelines, your business is left to handle returns on a case-by-case basis. This is both inefficient and labor-intensive for your staff. It means slower returns processing and a higher likelihood of mistakes being made – neither of which will endear you to customers.

How to write an ecommerce returns policy in 5 steps

1. Outline what your policy offers

First things first: Your ecommerce returns policy needs to make clear what customers are entitled to. When you’re writing the policy, you must answer the following questions to prevent confusion or unnecessary queries:

  • Can customers get a full refund, or just store credit?
  • Which products can/can’t be returned or exchanged?
  • Will you maintain a separate policy for discounted or clearance items?

The policies you choose to adopt will depend on what you’re selling and the difficulty of resale. However, it’s a good idea to keep it as simple as possible. Stipulating different conditions for every product category will make your policy confusing, which is likely to put customers off purchasing.

2. Condition for returned products

Retailers should set minimum standards  for how products need to be returned. It ensures that items are resellable and can go back on the shelf as quickly as possible. This includes:

  • Tags still being attached
  • Including the correct packing slips/paperwork
  • Products returned in their original packaging
  • Products being unwashed/unworn
  • Products being free of damage

3. Setting a return/exchange period

Setting a window for returns and exchanges can be tricky for retailers; consumers should have a reasonable amount of time to send items back – but within a timeframe where the retailer has a good chance of those items being resold.

A 30-day return/exchange period is considered standard, and most consumers will expect this at a minimum.

However, it’s critical to state exactly when this period starts and finishes. While using the date of shipping might be easiest, it could be deemed unfair by consumers. Instead, consider using the date of delivery (your carrier or 3PL will be able to confirm this for you).

4. Decide how to manage return shipping costs

This issue lies at the heart of retailers’ concern about returns; are they obligated to pay for return shipping? These costs can quickly add up and affect your profit margins, especially during return-heavy periods like the holiday season.

However, it’s important to note that not offering return shipping could cost you in sales. Customers want a seamless returns experience – and paying for shipping is something that adds a lot of friction.

But there are half-measures you can consider, such as offering returns shipping on full-price items, or to customers with a certain loyalty status. This allows you to reward your most loyal customers while reducing your returns management costs.

5. Explain how customers can initiate the returns process

Last, but certainly not least, is providing step-by-step instructions for how your customer can navigate the returns process. For example, can a customer begin the returns process on their own, or do they need to contact you first? Do they have the option to return in-store as well as online? You should also cover:

  • The relevant web portal for completing the return
  • What information they will need e.g. Order ID
  • Instructions for shipping
  • How the refund is processed
  • Where they can go for more information

Best practice tips for your ecommerce returns policy

1. Use plain English

The best way to avoid confusing your customers? Keeping wordy or complex language out of your policy. This can look as though you’re trying to mislead customers (a big no-no). It’s also likely to result in your customer care team being bombarded by questions – which is exactly what you’re trying to avoid by creating a policy in the first place.

2. Make your policy easy to find

Hard-to-find return instructions are going to frustrate people wanting to make returns – and this could make them decamp to a competitor. One-third of consumers say that difficulty finding a returns policy online will put them off purchasing!

Moreover, if you want your ecommerce returns policy to be a selling point for your brand, you need to make it accessible to prospective customers. It’s a good idea to put return information in the footer, labeled either ‘returns and exchanges’ or ‘returns policy’ for clarity.

You should also consider linking to your policy in the following places:

  • Order confirmation emails
  • Product pages
  • Checkout
  • Live chat

3. Make sure your staff understand the terms

It’s important that all of your associates and customer service reps understand your ecommerce returns policy so they can action it correctly. If you are bringing in a new policy or making changes, make sure that everyone is bought up to speed before you introduce it.

4. Look at what your competitors are offering

As we’ve already demonstrated in this post, a customer-centric ecommerce returns policy can give brands a serious competitive edge. So, it’s always a good idea to keep up-to-date with returns management practices by other brands in your space – and think about how you could do it better.

Think about giving a longer returns window during the holiday season

We all know that the holiday season is a goldmine for many online retailers – but it’s also responsible for a massive spike in returns in the New Year. With carrier networks overstretched and many customers on vacation, it’s fair and reasonable to lengthen your returns window over this period. As well as making your business more attractive to consumers, this also eases pressure on your staff by spreading out return volumes.

Looking for seamless returns management? Consider partnering with an experienced fulfillment provider

Managing and processing returns can be a big drain on a retailer’s time and resources, but it’s critical to get it right. If you can meet high consumer expectations for a seamless and easy returns process, your business is much better positioned to build a loyal customer base.

For best results, consider partnering with a fulfillment provider who can offer you advanced integrations with third-party returns solutions such as loop, Returnly, Happy Returns. This takes the pressure off so that you can focus on what matters – growing your business!

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