No return policy, no sale: research shows that 67% of shoppers wouldn’t even consider ordering from an online shop if there is no clear information available on how to return an item. So not having one is not an option. But what if we told you that a return policy is more than a routine item for an online store? What if it could even help you reduce the amount of returns while leaving your customers satisfied and eager to come back for more?
A powerful return policy can be your e-commerce store’s missing ingredient to making more money and increasing the number of loyal customers. But how do you make such a miracle return policy that works equally well for your business and your customers?
The return policy — friend or foe for your online store?
With more than two-thirds of shoppers needing clear return information to even consider ordering from an online shop, our 2023 research suggests that a well-designed return policy plays a vital role in influencing potential customers’ purchasing decisions. How? By instilling confidence in their purchases and assuring them of post-transaction protection.
Reversely, a poorly designed policy can do some damage. You run the risk that consumers will discontinue their orders prematurely. If they do end up ordering but have trouble returning, the additional customer service challenges and negative feedback all risk customer dissatisfaction and brand reputation.
As of June 2023, around 53% of people surveyed in the UK reported that they had returned an item they ordered online within the last 12 months.
Of course, returning an item involves extra expenses and work for your online shop. Let’s avoid that, shall we? The ideal return policy lets you sell more and actually ends up reducing returns. Recognizing this impact, it’s prime time to refine your return policies to ensure positive customer experiences that benefit your business.
The 5 steps of an effective return policy
How can you ensure that your store return policy is both fair to your customers and sustainable for your bottom line? It’s more than just adding your store name and contact information; the details make or break a return policy and must be carefully considered. We narrow it down to 5 steps with the decisions you need to make to build your ultimate return policy:
Step 1: Determine the return period
Defining a suitable time frame is a crucial part of your policy on returns and will most likely be one of your first considerations. This means establishing how many days you would like your return period to be. By EU law, every webshop is obliged to have a return period of at least 14 days. That’s a given. But should you consider extending this period?
Offering longer return periods is not just for the customer’s sake. It also plays its part in your webshop’s conversions and return rate. Companies that have experimented with a longer return period found that the number of returned products decreased as the return period increased. According to experts, there are two possible explanations for this phenomenon:
A: If you have more time to think about it, there is less pressure to return the product immediately.
B: The so-called “endowment effect” — the longer a customer holds a product in their hand, the more attached they become to it.
Treat your returns policy as part of your unique value proposition. What sets you apart when it comes to “sale or no sale”? For example, Amazon offers an attractive 30-day return period. IKEA, on the other hand, allows returns of unopened products within 1 year.
We understand the danger of an extremely long returns policy is that you will naturally receive old products that you can’t resell. To benefit from a longer return period and protect yourself from the disadvantages, we recommend a return period of 30 days.
Step 2: Decide who pays the return costs
Are you curious what customers think about return policies? When asked which elements of a returns policy are most important to them, 57% said the costs of the return. By finding the right balance between business expenses and customer needs, you can create a win-win situation for all parties involved. What will you opt for?
Free returns: According to our 2023 research, 72% of UK respondents said they would order more frequently at an online store if they offer free returns. Don’t see this happening? This can become a possibility when you choose a shipping solution that allows you to benefit from pre-negotiated carrier return rates.
Paid returns: Consider this — as a webshop, you are not obliged to pay the return costs. If you want to avoid costing yourself more, there are other options. You can instead offer customers to exchange the product for free. Do they still ask for their money back? Then you could offer returns as a paid option and make them responsible for the restocking fees.
Step 3: Define the return scope based on the products you sell
Knowing which products can be returned and which cannot shouldn’t be a guessing game for your customers. Consider the type of products you sell and how suitable they are for returns. As a rule of thumb, these products are usually not returnable:
- Perishable or short shelf-life products
- Opened hygiene-sensitive products
- Sealed products with a broken seal
- Custom-made products as per buyer’s specifications
- When buying as a business (business-to-business contract)
- Initiated services like travel bookings and subscriptions
- Digital products like media, online courses and gift cards
Clearly communicate any preconditions for processing returns. For example, you need unopened items in original packaging or specific documentation like a purchase receipt. Don’t leave people searching; let them see at a glance what the conditions are. Include it in email signatures, link to it from your website and your return portal, and make your returns policy clearly visible on the product pages. Or even on the product itself if necessary!
Step 4: Make returns easy and uncomplicated
More than half of consumers find returns a hassle. Chances are, your customer service team knows a thing or two about this too. But that doesn’t have to be the case. You can ensure that returns are as seamless as the purchase experience.
Here’s how you can make returns easy from the start:
- Put a prepaid return label in the box.
- Provide a brief explanation of how the returns process works on the parcel, on the invoice, or on a separate flier to avoid consumers having to search online first.
- Use a specialised returns solution, such as the Sendcloud Returns Portal. It allows your customers to swiftly register returns with their order number, zip code, and house number.
With this approach, you also ease the strain put on customer service. Even more so when you incorporate automated notifications of the return status, minimizing labour spent on WISMR (Where is My Return) queries.
Looking to expand? The possibilities are endless! Depending on your country or the carrier you use, you and your customers can experience extra game-changing shipping benefits. Don’t hesitate to check if can start shipping with a bang by using:
- Paperless returns: Allow convenient drop-off returns by scanning a digital label.
- International returns: Make cross-border returns just as simple as domestic returns.
- Easy Return Solution (ERS): Enable drop-off returns at any national shipping carrier branch.
Step 5: Offer a smooth return, exchange and refund process
Have all return conditions been met by the customer? According to the regulations set on the cooling-off period, you are obliged to refund the amount in full or partial, including the initial shipping costs paid by the customer.
Of course, if someone returns a product, the ideal is for them to make another purchase in its place. There is a way to encourage a new purchase while staying in line: offer the customer a temporary balance that they can spend. If they don’t use it within a certain period, the money will be refunded to your account. Check the law for the country you are serving. In the UK, for example, the trader must refund the consumer using the original payment method unless the consumer agrees otherwise. Having a returns portal that offers the option to select a return exchange or store credit opens the door for new purchases.
When it comes to selecting refunds, consumers want to know when they will be receiving their refund and how. Our 2023 research shows that on average, consumers only want to wait up to 5 days for a refund. Make sure you have a convenient setup for arranging refunds as quickly as possible. This way you show them why they should come back to you in the future.
Find the right tone for your return policy
What makes a return policy good, or bad? One thing only: customer-centricity. To better see the effect a return policy has on a customer, let’s compare these two return and refund policy samples. Think about the effect the one or the other has on you. Which of the two gives you more confidence?
👎 Bad return policy example |
👍 Good return policy example |
| Products without quality-related problems (excluding those made to measure) can be returned via cash on delivery through customer service.
Return costs are your responsibility. We do not accept returns on products that have already been used. Returned items must be unused, in original packaging and with tags. To view warranty periods and specific conditions for each product, click here. |
Are you not satisfied with your purchase? Is your product damaged? Sorry to hear that! We’ll take care of it.
All the promises we keep:
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See what we mean? Crafting a straightforward returns policy that is clear and effective might take more time, but is well worth it.
Store return policy template for e-commerce businesses
With the knowledge of how to write a return policy for your online store, our handy tool will have your return policy ready in a flash, ensuring that it aligns with the specific needs and preferences of your business.
Simply enter what terms you want for the returns period, associated costs, and product scope to generate your own downloadable return policy document.
Managing returns: from policy to practice
Ready to put your newly created policy into practice? Having a well-defined return policy is fantastic but won’t be effective if it’s not ingrained in your operational day-to-day. Transform your return policy from a standalone link to a seamlessly integrated part of your processes. It not only provides clarity and stability to customers but also streamlines the entire return process, making it more efficient for both you and your customers.
Utilizing a Return Merchandise Authorization (RMA) system simplifies the process by allowing you to request necessary information and images before deciding to authorize a return. Are you tired of making calls to customers and manually dealing with the same non-compliance issues? When you indicate your special conditions in a customizable return portal, everything changes. You take back control with the ability to accept or reject returns while even having an oversight of the return reasons.
Already have your favourite tool you work with? Connect Sendcloud’s return management benefits to the tools you are using for a seamless integration that completes the picture.
Do you see how a clear return policy is non-negotiable for online stores? Prioritize this pivotal element for e-commerce success today. Remember, a stellar return policy is a key element in providing excellent customer service and building long-term relationships with your customers — translation: fewer returns and happy customers.
