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How to Draft a Return Policy: Delight & Retain Customers!

sahil bajaj

Sahil Bajaj

Senior Specialist - Marketing @ Shiprocket

February 19, 2024

10 min read

Return policy forms an integral part of an eCommerce business. It includes the terms and conditions related to products’ return. All the essential clauses pertaining to return must be mentioned in this policy in simple language so that they are easy to comprehend. Return policies benefit businesses in certain ways which you shall learn about as you go through this article.

Reportedly, 57% of shoppers go for online stores that have a simple and reliable return policy in place. As you go through this piece of writing, you will also learn how to write a return policy, what to include in it, when to update it and more. We have shared small business return policy examples to help you understand how to draft an effective one.

Drafting a return policy

Return Policy in eCommerce Business: Definition 

A return policy is a set of rules and regulations that explain what a customer needs to expect in case he decides to return a certain item. It helps the customers know whether you provide a refund, store credit, gift vouchers, or exchange offers on returning a product. This also provides information about the items that are eligible for return and the conditions, if any, associated with the same. Any charges deducted for returning an item and the estimated time for the return process are also mentioned in this policy. As per a survey, 30% of all the products bought from online stores are returned whereas the percentage falls to 8.89% for brick-and-mortar stores.

Businesses must establish a strict and clearly defined return policy to streamline the return process. However, it must be drafted keeping the customer’s convenience in mind. Businesses should be open about returns as it helps attract more customers.

Supplements to Return Policy

You may supplement your return policy with the following:

No Refund Policy

Include a no-refund policy to state that you do not provide refunds on certain or any items. It is important to mention this so that your customers have a clear idea that they won’t get a refund for returning the products. If you allow exchange, then you may mention the same.

All Sales Final Policy

This policy states that there are no returns, refunds, or exchanges on any of the items purchased by the customer. This type of policy is mostly for perishable items.

Money Back Guarantee

It states that the customers can return their products for any reason and get their money back. You can provide this on all the products or limited items as per your discretion.

How do Return Policies Benefit Businesses?

Customer-centric return policies may seem to benefit the customers but they ultimately benefit the businesses. Here is how:

  1. Establishes a Loyal Customer Base

Shoppers look forward to buying products from brands that provide an easy return policy considering the customers’ best interest. Thus, you can witness repeated purchases and build a loyal customer base. Statistics reveal that as many as 64% of shoppers state that a negative experience at the time of return or exchange creates a poor image of the brand. They would hesitate to shop from that brand again. 

  1. Word Of Mouth Publicity

When customers experience a smooth return or exchange process, they are likely to recommend your brand to others. This way you can attract more customers and boost sales.

  1. Guard Against Fraudulent Returns

Clearly defined return policy considering customers’ interests also guards against fraudulent returns.

Methods for Creating a Return Policy 

Here is the method to create a return policy systematically:

  1. Start by choosing a format. You may use a 30-day return policy template or other such policy templates available online for reference.
  2. Select the clauses you would like to include in your return policy. You will get standard return policy clauses online. You may add some of your own or make some changes in those clauses to create your unique policy.
  3. Create a blueprint of the policy and share it with your top management for their input and suggestions.
  4. Make use of language that is easy to comprehend.
  5. Finalise the policy and publish it.

Steps to Draw Up a Return Policy

Here is a brief outline to help you draw up a return policy:

  1. Type of Refund

Begin by defining the kind of refund you want to initiate for the returns. It can be a full refund credited to the customer’s bank account or store credit. Alternatively, you can also provide the exchange option rather than returning the money. Likewise, deducting some amount or the shipping charges and crediting back the remaining is another option.

  1. Number of Days

The number of days you will accept the return is crucial information you cannot miss out on your return policy. Clothing brands usually provide a 30 day window. You can use a 30-day template to draft this. Perishable items, on the other hand, must have a much shorter window such as 3-5 days. Likewise, books and jewellery pieces mostly have a shorter time. You can select the number of days for different products as per your choice. As per a survey, 23% of the respondents expect a return window of up to at least 14 days. On the other hand, 63% prefer a 30-day window for returning their goods.

  1. The Information Required

You must mention the information they need to produce for returning the products and claiming a refund. This may be purchase receipts, transaction ID, or the like.

  1. Condition of the Product

Clearly state the condition the product should be in at the time of return. Anything that is not acceptable must be mentioned in the policy.

  1. Where to Return?

Where the product can be returned should also be mentioned. Whether customers can return or exchange it at any outlet across the country, the ones in your city or only the one from where it has been purchased should be mentioned.

Inclusions and Exclusions of a Good Return Policy

Let us take a look at what you must include in your return policy:

  • The items on which you accept returns and the ones on which you do not
  • The method to initiate a return
  • The way you would reimburse the customer for returning an item
  • Deadline to return different items
  • The condition in which the items should be at the time of return
  • Charges levied for returning an item
  • Return policy for damaged and lost items
  • Links to other related company policies such as refund, exchange, and vouchers.
  • Contact information
  • Approximate time taken to process the refund
  • Information about third-party warranties, if any.

Here is what you should exclude from the return policy:

  • It is important to avoid confusing language and the use of jargon
  • Do not make the process complex and time-consuming
  • You can check small business return policy examples for reference but do not copy some other business’s policy as it is. 

Creating an Effective Return Policy: Writing Tips with Real-Life Examples

Let us take you through two real-life return policy examples to help you understand how to draft an effective return policy:

  1. Everlast

Everlast’s return policy is quite straightforward. The brand clearly states that only the products that are unused and are in their original packing will be eligible for return. The returns will only be accepted within 30 days from the purchase. The return can be done in a few easy steps which are mentioned on the return page. The brand’s return policy is appreciated for its transparency and the convenience it offers.

  1. MyProtein

MyProtein has created an exclusive FAQ section that answers all big and small questions related to its return policy. This includes queries such as how to return a product, what to do if an item is faulty, is there any cost of returning and more. It is a complete guide that makes it easier for the customers to understand all the clauses related to the brand’s return policy. This is a unique approach that has helped to make the return experience convenient for the customers. 

Places to Exhibit Your Return Policy

Here are some of the places where you can exhibit your return policy:

  • Create an exclusive page on your website to state the return policy
  • Mention it on every page of your website. You can link it to the footer.
  • State it on your checkout pages and payment screens
  • State all that you want the customers to know about your return policy in the FAQs section
  • Brick and motor stores must state the return policy near their cash counters or the entrance.

Managing Efficient Returns: Strategies 

Here are a few tips to help you manage your returns efficiently:

  • Firstly, you must make your return process as simple as possible and state the procedure clearly to ensure convenience. The process must not involve too many steps and should not be time-consuming. 
  • Invest in advanced retail technology to process the returns with ease, without the scope of error. Your POS system must be easy to operate and should be capable of processing the data quickly. Returns should be processed in a few clicks. Research shows that 30% of shoppers look forward to quick refunds.
  • As the customer returns a product, inquire about the reason for doing so. It may be because the size did not fit, the product was damaged, didn’t like the style or any other reason. Collate this return data, analyse it and use it to minimise the number of returns. This will also give you an idea about which products aren’t being liked by the customers. So, you can adjust your inventory accordingly.
  • Returns should not be seen as a loss to the business. Instead, they must be considered a sales opportunity. A return may result in more sales as you can upsell your products. It can also increase your customer base as the purchaser and returner may not be the same person. Returns and exchanges allow you to showcase your customer service and create a positive impression.

Conclusion

Return policies must be easy to understand. The procedure to initiate a return must also be simple. Businesses should mention all the clauses related to the return and refund on their website and app. Statistics reveal that 49% of online shoppers check the return policy before ordering a product. It is suggested to review and update the policy every few months and any changes in the same must be communicated to the customers. The use of advanced retail technology helps in processing the returns quickly and systematically. Retailers must consider investing in them to ease the task. It is equally important to invest time and effort in clearly defining the return policy. The tips shared above should help with the same.

How often should you change or update your return policy?

It is recommended to review your return policy every few months and update it to stay on par with your competitors. It is suggested to send out a clear communication about the alterations made in the policy through text messages or emails.

Should I deduct the shipping charges from the refund given on returns?

Shoppers prefer brands that do not deduct shipping charges or levy any additional charge on returns. You may lose customers if you deduct shipping charges.

Is it a good idea to opt for a no-refund policy?

Many brands choose a no-refund policy. Instead of refunding the amount, they provide store credits or gift vouchers. They even allow exchange. However, this may impact your sales especially if you are new to the market. Providing refunds on returns, on the other hand, can boost your sales.

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