- How to return policies affect your bottom line
- Why your return policy matters
- How to communicate your return policy
- The difference between online and in-store returns
- How to structure your return policy
Return Policies and Your Bottom Line
While some companies go the route of expansive return policies to keep customers happy, the truth of the matter is that if you're too lenient with your return policy then you'll have people who abuse those policies. Large companies like MEC and Costco have amazing policies. Their return policies keep people coming back because they know that if they don't like something or it doesn't work, they can bring it back without any hassle. However, we have to keep in mind that these large companies can afford to take returns since they do such large volumes of sales. If you are a smaller business, you need to be creating and designing a reasonable return policy that works for both you and your customer. Implementing a balanced and fair return policy is critical to your business as relaxed policies can negatively affect your bottom line.
Customers Look at Return Policies Before Buying
Fact: Many consumers will check out your return policy before even making a purchase.It's important for consumers to know they can return something without any hassle in case they have issues. The more expensive the item or items, the more concern there is around return policies. When you implement free return shipping, customers are more likely to make purchases from your store because they know they can return it if they don't like it. The ease of return will affect the overall experience of the consumer, and the better the experience, the more likely they are to be a repeat customer and share good experiences with their friends. Note: Always make sure to factor in return shipping costs into your forecasts. If you know that 15% of the 10,000 goods you sold last year got returned, and the average return shipping label last year cost $5, then you can say that return shipping will cost you $7,500.You can build this into the pricing of your product or into your general budget, but don't get blindsided by it! If a customer is hesitant about a purchase than a good return policy can make their decision easier. That's why it's important to advertise it.
Sharing Your Return PolicyOnce you have crafted a solid return policy that is easy to read and understand, make your return policy easily accessible. Most people know to look for the return policy in the footer, so put it there. You can also put a link to in on your product page. to make it super easy to find. Finally, you can advertise your return policy/policies on an easy to find page on your site (like the shipping page), or near the cash in your brick-and-mortar locations. A clear and easy to find and understand policy means a stellar customer service experience. If you want a winning policy, don't make customers jump through hoops to return items. When you make it easy and they'll shop again.
Online versus Brick-and-Mortar Returns
If you have a store that has both an online presence and brick-and-mortar locations you'll need to be sure to have a return policy that covers both aspects. To make life easy for customers you may want to have the option to return items that were purchased online in the store, or be able to print a return label and ship it back (either at cost or for free). On average, 30% of products ordered online are returned versus 8.9% from brick-and-mortar stores. If the return process is easy an average of 92% of consumers will buy again according to this study. Note: If you want to reduce your return rate, make sure that you have great descriptions online and amazing product photography. The more information you can provide, the better for your customers.
Make Your Policy Comprehensive, Easy and UnderstandableCreating a comprehensive return policy can reduce the extra resources you'd have to spend on returns, and will actually keep customers coming back. If you handle the return professionally and well then the customer will likely remain a customer. Make the policy easy to find on your website and explain it well. You can add a blurb or link of the policy in confirmation emails when a customer buys an item or the receipts to make sure the customer is aware of the policy. Make sure you explain what you offer: whether that's a direct exchange, store credit or a return of their money. Let them know if they need proof of purchase or not and what they can expect from you (how long the process takes, what to expect, etc.).
How do you handle returns and exchanges? Let us know what you have found success with in the comments!