Does Your Return Policy Suck?

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Does Your Return Policy Suck?

Does it have more rules than the IRS Tax Guide for Small Business? More fine print than a TV commercial for a prescription antidepressant?

If your return policy is non-existent, or if it isn’t generous and easy for customers to understand, you may lose sales.

Wait a minute. Isn’t the purpose of a return policy to make dissatisfied customers happy?

No.

The purpose of a return policy is to increase sales.

Return Policy

[Photo credit: Lending Memo]

Not long ago, I was shopping for a gift on Etsy. I narrowed the search to two shops. Both had similar items at comparable prices in the $80 range. Both shops had less than 30 sales, along with a handful of 5-star reviews. I then compared the “Policies” pages.

One shop had a Refund and Exchange Policy that simply stated, “Please ask any questions before you buy. We do not offer refunds or exchanges at this time.”

The other stated, “Your happiness is our only goal. If you aren’t completely satisfied with your purchase, let us know. We’ll fix the problem or refund the full amount.”

Which store do you think got my business?

I actually preferred the item from the shop with no return policy, but I bought from the shop that would let me return the item if I needed to do so, which I didn’t.

Here’s my point. A non-existent or poor return policy can steer a potential customer away from your shop, and toward your competition. An awesome return policy may inspire a potential customers to buy from you instead of your competition.

Sure, a good return policy can turn a dissatisfied customer into a happy one if you treat the customer as a priority instead of a problem. And a successful resolution to the customer’s concern can even lead to more sales and a loyal customer.

The points below may help you rate where your own policy falls on a scale of “suck to awesome”.

Your Return Policy Might Suck if You…

  • Don’t accept returns. The dreaded “all sales are final” statement essentially says, “Unless you’re 100% certain about this item, don’t buy it.” What is says to me is, “Shop elsewhere.”
  • Accept returns only if you (the seller) make a mistake.
  • Make your customers pay a “restocking” fee.
  • Give your customers an extremely short return window, like requiring them to tell you of the return within 3 days of delivery. I hope the mail carrier didn’t deliver the package right after the customer left for the lake to enjoy a 4-day weekend!

Obviously, there are exceptions. Some items are non-returnable for health or hygiene reasons. However, there are ways to successfully resolve customer concerns even with these types of items.

I realize a lot of stores have this kind of policy, and many do well. However, they’re also missing out on sales. A poor return policy sends the message that a company doesn’t stand behind its products.

What Makes an Awesome Return Policy?

Retailers such as Zappos, Kohl’s, and L.L. Bean are well-known for their customer-first, hassle-free return policies. It can help to differentiate in a crowded marketplace, and to build brand loyalty.

While the following suggestions might not work in all cases, they definitely add a “wow” factor for those willing to go the extra distance.

  • Offer a 110% money-back guarantee.
  • Offer a refund or exchange even on custom or personalized orders.
  • Pay for the return shipping.
  • Offer a coupon toward the customer’s next order.
  • Expand the timeline for returns. Instead of 7, 14 , or 30 days, try 45 days, 90 days, or even longer.

Your policy must make sense financially. If the cost to ship your product is $50, it probably doesn’t make sense to include paid return shipping in your policy. But can you extend the return window from 10 days to 45? Or maybe offer a coupon for 10% or 20% off their next order?

Won’t a Generous Return Policy Lead to Abuse?

Most customers do not buy with the intent to return. If you’re worried about excessive returns, it may point to a larger problem that you need to address.

We recently had our 100th sale on our new Etsy shop, Busy Bee Burlap. Before opening this shop, we had over 200 sales on a different Etsy shop, and I’ve also made over 200 sales on eBay. I always offer a 100% risk-free guarantee that even covers personalized items, and return shipping.

In over 500 combined sales across Etsy and eBay, I’ve only had 1 return. Because I took care of the issue and I treated the customer with respect and the priority she deserved, she returned later to place another order. And when we opened our new Etsy store a few months ago, she was one of our first customers.

You can checkout our policy if you’d like to see what works for us.

Questions: Do you view your return policy as a sales tool? Why or why not? How important is a return policy when you’re placing an online order? I’d love to hear from you.

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