{"id":1065,"date":"2019-01-17T14:27:15","date_gmt":"2019-01-17T22:27:15","guid":{"rendered":"https:\/\/www.logiwa.com\/?p=1065"},"modified":"2025-05-02T04:24:01","modified_gmt":"2025-05-02T11:24:01","slug":"ecommerce-returns-policy","status":"publish","type":"post","link":"https:\/\/www.logiwa.com\/blog\/ecommerce-returns-policy","title":{"rendered":"Ecommerce Return Policy"},"content":{"rendered":"

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Sell More With a Great Ecommerce Return Policy<\/h2>\n

30% of online purchases are returned<\/a>. In 2015, that was $260 billion dollars lost in returns. This issue is particularly pressing for retailers because the return experience is a pain point for many customers. As a result, a great return experience increases customer loyalty. Returns negatively impact your business\u2019 bottom line, and most retailers don\u2019t invest in their returns process. Not to mention, return rates aren\u2019t going down any time soon.<\/p>\n

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\u201cRetailers are not very good at managing returns right now, and so unless they invest in their ability to manage returns, the volume of returns coming back will cause problems in their overall supply chain,\u201d said Tom Enright, supply chain research director at Gartner Research<\/a>.<\/p>\n<\/blockquote>\n

This investment starts with a clear ecommerce returns policy and followed by streamlining your ecommerce returns management processes<\/a>. We wish we could tell you \u201cAnd here is the perfect return policy!\u201d, but the truth is, your online returns policy is a very individual document to your company. So since we can\u2019t just whip up the best policy for you, we decided to help you create a great returns policy that increases return customers and helps you sell more.<\/p>\n

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Contents<\/p>\n

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  1. Your Returns Policy Can Generate More Ecommerce Sales<\/a><\/li>\n
  2. Your policy is part of the customer experience<\/a><\/li>\n
  3. Do You Use Your Return Opportunities to Cross-Sell or Up Sell?<\/a><\/li>\n
  4. How to Write a Great Return Policy<\/a><\/li>\n
  5. Common Types of Return Abuse<\/a><\/li>\n
  6. What You Need to Include in Your Return Policy<\/a><\/li>\n
  7. How to Market Your Ecommerce Returns Policy<\/a><\/li>\n
  8. Great Ecommerce Return Policy = More Sales and Happy Customers<\/a><\/li>\n<\/ol>\n<\/div>\n

    Your Returns Policy Can Generate More Ecommerce Sales<\/h2>\n

    What if we told you that a clear and customer friendly returns policy could increase your online sales? It\u2019s true. In a study published in the Journal of Retailing, Narayanan Janakiraman and his team concluded that a generous monetary return policy increases sales<\/a>. This means your \u201c100% back money guarantee\u201d can actually encourage your customers to buy more.<\/p>\n

    It does mean that returns are likely to increase, but Janakiraman\u2019s analysis showed that sales increased more than returns. It\u2019s important to remember that each return is an opportunity, not a lost sale.<\/p>\n

    It\u2019s important to note that over 60% of customers review your return policy before buying from you<\/a>. If they aren\u2019t happy with what they see, they will likely shop around.<\/p>\n

    Grant Carbone, an international sales expert, fully advocates for flexible return policies (if they fit your products). In fact, he described a scenario that pushed him to a competitor while furniture shopping<\/a>.<\/p>\n

    He said that he had selected $20,000 worth of merchandise, and a shag carpet caught his eye towards the end of his trip. He asked if he could return the rug if it didn\u2019t match his office furniture and if they would waive the restocking fee since it was a freestanding item. They refused, and Grant went to a competitor and spent twice as much and purchased two shag carpets.<\/p>\n

    The moral of the story here? \u201cThey lost a $20,000 furniture sale, their main income, because of a policy that stated they wouldn’t take a return on a $400 carpet sitting on the floor,\u201d said Grant Carbone.<\/p>\n

    Your policy is part of the customer experience<\/h2>\n

    In another study, published in the Journal of Marketing Research, showed that when customers believe a product has a lower level of risk, they\u2019re more likely to make a purchase<\/a>. Not only that, but customers may be willing to spend more if your return policy lowers the consequence for a \u201cbad\u201d decision.<\/p>\n

    Your return policy is a very company-centric decision. A 100% return policy may help you sell your high-ticket items. A 100% guarantee on low-ticket items may cost you more than the item\u2019s worth in restocking and shipping fees.<\/p>\n

    What about pushing the restocking fee and shipping back onto the customer? That would make them less likely to send a product back, wouldn\u2019t it? Well, that\u2019s true. However, it also makes it less likely that they will purchase from you again in the future.<\/p>\n

    Is losing that customer\u2019s lifetime value worth refunding that one sale?<\/p>\n

    Use Your Return Process to Positively Interact with Your Online Customers<\/h3>\n

    In many cases, it can be hard to interact with your customers if you sell in online marketplaces like Amazon and Walmart. This makes branding difficult for most marketplace sellers. While a returns scenario isn\u2019t ideal, its a chance to interact with your marketplace customers.<\/p>\n

    Most major marketplaces let their sellers handle returns. Which means your return policy can be a differentiating factor between you and your competitors. Most customers dread the returns process, so when you can provide a positive and friendly experience, it sticks with them.<\/p>\n

    Do You Use Your Return Opportunities to Cross-Sell or Up Sell?<\/h2>\n

    You should always start with truly listening to your customer. Only then will your representative know if the situation is right for exchanging, cross-selling or up selling.<\/p>\n

    Did your customer order the wrong size or color? Then perhaps you can offer a free exchange.<\/p>\n

    Could you offer your customer similar or best-selling products to go along with their exchange at a discounted rate?<\/p>\n

    Would they be happy with an online credit versus a monetary refund?<\/p>\n

    If the answer to those questions ends up being no, and your policy says you\u2019ll offer a full refund, then you should do so. You have to look at the big picture in terms of your refund policy. Don\u2019t lose a lifetime customer over one product return.<\/p>\n

    How to Write a Great Return Policy<\/h2>\n

    Writing a great return policy is no easy feat. But you can do it, and you can do it well. Your return policy depends on your ecommerce business and the sort of products you sell online. Certain product categories are plagued with return policy abuse for different reasons.<\/p>\n

    You have to keep these scenarios in mind when creating your return policy. You won\u2019t be able to prevent return abuse completely, but you can certainly make it more difficult.<\/p>\n

    Common Types of Return Abuse<\/h2>\n

    Wardrobing or Renting<\/h3>\n

    You\u2019ll see this when someone wants to use a product or wear clothing for a short amount of time. Many evening wear retailers don\u2019t allow returns at all due to the nature of their product. After all, people don\u2019t usually wear evening gowns often.<\/p>\n

    A product category that you might not consider being a part of the \u201crenting\u201d return scheme is electronics. You might have heard about people purchasing huge flat screens for the Superbowl, but what about game systems? This Reddit user was called a \u201clazy inspired genius\u201d for his Xbox coup.<\/p>\n

    This is an in-store example, but people are known to \u201crent\u201d electronics, like cameras, for vacations as well.<\/p>\n

    Electronic \u201cBricking\u201d and Switch Fraud<\/h3>\n

    Customers will purchase an item just to break it or strip valuable parts to turn a profit on the item through a money-back guarantee (hence turning the item into a \u201cbrick\u201d). Switch fraud occurs when a customer purchases a perfectly good item and returns a previously owned but broken item in its place.<\/p>\n

    Upgrading<\/h3>\n

    The example below is an in-store \u201cupgrading\u201d scheme, but can you see how it could be applied to ecommerce if you don\u2019t keep track of which customers return what items? Time frames can help limit this problem, but keeping track of customer returns would be key here.<\/p>\n

    What You Need to Include in Your Return Policy<\/h2>\n

    Customers do avoid stores with strict policies, but a strict policy and a clear one aren\u2019t synonymous. You have to assess your inventory and determine the sort of return policy that would be fair to your customers AND your business.<\/p>\n

    If you sell swimwear, you can\u2019t afford to have people return bathing suits without the tags and protective liners. You can\u2019t restock them to sell to another customer. If you sell food items, you can sell an opened container of anything to another customer.<\/p>\n

    Here are some points you should make sure you include in your return policy.<\/p>\n

    Return Time Limit<\/h3>\n

    Like we\u2019ve said, the time limit you choose should be dependant on the products you sell. If you sell a variety of products, then establish a time limit based on product categories.<\/p>\n

    Ecommerce retailers are exploring product categories that were previously only in the purview of brick and mortar stores. Mattresses are a really good example of this. Online mattress sellers usually offer a more generous return policy than in-store retailers.<\/p>\n

    Almost 45% of retailers require that customers keep their mattress for a minimum amount of time before returning it, which is an interesting idea.<\/a><\/p>\n

    Conversely, some retailers offer a lifetime guarantee, which can help customers make the leap to buy. Briggs<\/a> and Riley, a luggage retailer, offers a lifetime repair guarantee<\/a>. This helps them keep their customers happy, while keeps \u201cupgrade\u201d scammers at bay.<\/p>\n

    \"Briggs_Riley_lifetime_repair_policy\"<\/div>\n

    Briggs and Riley offers a lifetime repair guarantee versus a lifetime money back guarantee, which is a great way to keep customers happy. <\/em><\/p>\n

    L.L. Bean had to change their lifetime return and replacement guarantee<\/a>. A small but growing group of customers who used the policy to return heavily used and damaged items. In a letter to their customers, L.L. Bean said:<\/p>\n

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    “Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”<\/p>\n<\/blockquote>\n

    How Your Customer Will Receive Their Refund?<\/h3>\n

    Refunds can come in many ways. Will you offer store credit? Exchanges only? Money back guarantee?<\/p>\n

    Store credit can be a great way to offer a customer their money back while ensuring that they will shop with you again. Your customer doesn\u2019t feel pressured to make a decision about an exchange right now, and you increase the chance that they will buy from you again.<\/p>\n

    Who Pays for Shipping on Returns?<\/h3>\n

    According to the 2017 UPS Pulse of the Online Shopper study, 79% of shoppers said that free shipping on returns was important to them. Free returns shipping is quickly becoming the customer expectation. Actually, 47% of retailers believe that \u201ccustomers are significantly less likely to shop without free shipping\u201d<\/a> according to a Total Retail 2017 study.<\/p>\n

    Ecommerce retailers like you are forced to make a choice: increase customer conversions with free shipping, or lose customers by putting the shipping cost on them. This is only a decision you can make looking at your entire business. Total-cost optimization is your goal.<\/p>\n

    Now back to returns. Who will you have pay for the return shipping costs? 27% of US Internet users said that free return shipping was important to them<\/a>. If you don\u2019t offer it, do you run the risk of losing customers? Again, you have to make this assessment based on your business and your products.<\/p>\n

    How to Market Your Ecommerce Returns Policy<\/h2>\n

    There are a variety of ways you can market your return policy. It\u2019s important that potential and current customers understand your return policy. Not to mention, depending on your policy, it can help you stand out from your competitors!<\/p>\n

    Post it on Your Website<\/h3>\n

    Your return policy should be easily accessible on your ecommerce website. You can have a tab for it on your main site menu, but most online retailers keep it in the footer menu. Many customers will simply search online for your return policy, so make sure it\u2019s optimized for search engines.<\/p>\n

    Include Your Return Policy in Confirmation Emails<\/h3>\n

    Brick and mortar retailers will print their return policy on their receipts. You can do something similar. As part of your order confirmation email, you can include your return policy towards the end of the email. If your customer does have an issue with their order, this email is likely the first place they will turn.<\/p>\n

    Don\u2019t Forget to Compare Your Return Policy to Your Marketplace\u2019s Policy<\/h3>\n

    You\u2019ll need to check your return policy against the rules for your specific marketplaces. For example, Amazon requires their sellers to have policies that are at least as favorable as their own. Amazon sellers are expected to uphold Amazon\u2019s policy and rules for each product category.<\/p>\n

    Be sure that your customer service reps understand the rules for each marketplace you sell on.<\/p>\n

    Great Ecommerce Return Policy = More Sales and Happy Customers<\/h2>\n

    No business wants to hear that their products didn\u2019t make their customer happy. If you invest in your reverse supply chain, retrieving products from your customers<\/a>, then you can actually save your business money. Create a customer-friendly return policy that aligns with your company values and products, and you\u2019ll have a healthier bottom line and happier customers.<\/p>\n

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