Home / Blog / Your E-Commerce Returns Policy: What Should It Be?
07 Apr 2019

Your E-Commerce Returns Policy: What Should It Be?

Even for the largest e-commerce enterprises, developing a returns policy can be a process of trial and error, as evident from Amazon’s decision earlier this year to start closing the accounts of customers who exploit its lenient approach to returns.

Ultimately, your returns policy will need to strike a balance between fostering trust with your customers and controlling financial losses. Despite the plentiful policy templates published online, there is little sense in implementing a cookie-cutter procedure.

What you can do, however, is follow some general guidelines—like those you’ll find outlined in this post—to help you find a solution that works for your business.

4 Things Your Returns Policy Should Be

Because a returns policy is something of a balancing act, you will need to build it with both your customers and your business in mind. While you may not be able to offer a hyper-liberal policy like Amazon’s, it is essential to let your customers know that their experience matters to your business.

Remember, a returns policy is not only about bringing unwanted purchases back into your inventory. It is also about the return of customers to your store.

Evidence of this exists in research findings, such as those revealed by Supply Chain Digital recently, in which 60% of shoppers said they are unlikely to return to an online retailer after an unfavorable returns experience.

In short, you need a returns policy that expresses your intention to help rather than hinder shoppers when they seek a refund or exchange. To do that, while also protecting your business, the following four qualities should be at the forefront of its design.

1. Make it Plain and Simple

Try to keep your returns policy short, simple, and to the point. Let your customers know that it’s OK to change their minds after purchasing your products.

Complicated fee structures, limitations, and an excess of fine print only lead shoppers to feel that you are actively discouraging them from making returns.

While minimizing returns should be a priority, there are ways to do that, and a policy full of legal-style conditions is not one of them.

2. Make it Transparent and Obvious

Customers should need only to skim your returns policy to understand what their options are, hence the need for plain, simple, and welcoming language. However, before they can skim it, they need to be able to find it, so make sure your policy is in plain view on your website.

Many shoppers will actively look for a seller’s returns policy before deciding to make a first-time purchase. If they think you are trying to keep it inconspicuous and they can’t understand it with a cursory once-over, they may move straight on and shop somewhere else.

3. Put it in the Language of Your Customers

While English is the international language of business, you might be engaged in cross-border e-commerce, perhaps in markets where English is a second language, or not spoken at all.

Your returns policy, and for that matter, all your website content, should be easy for people in your target markets to comprehend. That means publishing it in the languages of those markets, as well as in English.

Don’t make your overseas customers use Google Translate to make sense of your policy. Foster trust by offering it in their national language or, if you really must write it in English only, observe all the previous points in this post about clarity, simplicity, and honesty, because they will pay dividends in your cross-border sales efforts.

4. Tailor it to Your Products and Business Model

We’ve covered importance of understanding what customers want. At the same time, it’s important that your returns policy not handicap your business. It should work for your enterprise, while also meeting your customers’ needs.

For example, if you are selling low-cost, low-value products to a cross-border market, it may not even be worth your while to ask customers to return those products physically.

Instead, you might find it best just to offer a refund or replacement and let the customer dispose of the original item.

On the other hand, if you are selling expensive and bulky products with thin margins, you might have little choice but to charge some form of return fee, perhaps making it simple for the customer by covering the shipping costs and deducting a restocking fee from the refund.

You should only apply fees to returns resulting from a customer’s change-of-mind. The seller should always cover the cost of returning faulty, damaged, or incorrect products.

Some Returns Policy Questions to Consider

In determining the mechanics of a returns policy, the options are endless, and those described in the section above are just a couple of examples. To help you develop your strategy, though, you might wish to consider the following questions:

  • What proportion of the purchase price will you refund?
  • How easy will you make it for customers to return a product?
  • Will you offer cash refunds, store credit, exchange, or all three?
  • Will you provide refunds for products that were purchased for a discounted price or during a sale?
  • What will be the timeframe (from the date of purchase) within which you will accept a return?

It’s OK to Experiment

Developing a returns policy for your online store or social selling enterprise can seem daunting and indeed, it will probably be one of the more challenging elements of your business strategy to settle on.

However, even the most influential players in the e-commerce space have to experiment and adjust from time to time, and you should not be afraid to do the same.

The important thing is to get a policy defined and published. Then you can see how it works for a while, and make adjustments over time until you hit on the best formula for your customers and your business.