Creating a Return Policy That Benefits Your Business

Returns are an inevitable part of running an online business. While processing returns can be time-consuming and reduce profits, having a fair and clearly communicated return policy provides many benefits that outweigh the costs. A good return policy is an opportunity to build customer trust, demonstrate great service, and gain loyalty.

When creating your return policy, strive to find the right balance between operational efficiency and customer satisfaction. Here are some key considerations:

Choose a Reasonable Timeframe

14-30 days is the standard across most industries, but 30 days has emerged as the norm for several reasons:

• It gives customers enough time to evaluate products and ensure they fit their needs.
• It aligns with credit card billing cycles.
• It provides leeway for shipping items back.
• It prevents excessive returns that could be abused.
• It fits accounting cycles and allows accurate reporting.
• Customers have come to expect 30 days as the standard.

For apparel and accessories, 14 days is common as it allows customers to receive and try on items while preventing excessive returns.

Extend the return window during peak holiday shopping times like Black Friday through Cyber Monday (The Monday after Thanksgiving), and before and after Christmas around December 10-18, and Dec 26-31. You may want to provide a special holiday return policy for items purchased from November to the new year.

Define Returnable vs Non-Returnable Items

• Clearly specify which categories or conditions make items non-returnable - for example, final sale items, customized/personalized orders, underwear, bathing suits, etc.
• Set guidelines around the condition of returns - new with tags, gently used, items missing original packaging, etc.
• Explain your policies related to returns due to incorrect sizing, damage during shipping, personal preference/dislike, etc.

A poorly defined return policy might have your customers going to a shop with a better policy to give them peace of mind in the off chance they do need to perform a return.

Outline the Return Process

• Explain step-by-step how customers should initiate returns - do they need an RMA number, where do they ship items back to, who pays for return shipping, etc.

• Set customer expectations on timing of refunds - for example, refund will be issued within 3-5 business days after you receive and inspect the return.

Build in Flexibility

• Be a bit more lenient during peak shopping seasons - extend return window, relax conditions, offer free return shipping.
• For low value items, allow customers to keep the product and issue a refund. This prevents costly return shipping.
• Offer refund, replacement, or store credit options.

Focus on Convenience

• Make the return process as easy as possible - provide pre-paid return labels, package return kits, offer pickups/drop-offs, set up self-service portals.
• Providing a convenient, “no questions asked” experience will earn customer loyalty.
• To provide convenience for yourself as a store owner, you may want to utilize third-party reverse logistics services. Instead of processing returns in-house, these reverse logistics companies have warehouses where your customers send return merchandise to. The reverse logistics company processes the returns for you, similar to a 3PL, but for dealing with returns instead of fulfilling orders.

Leverage Technology

• Shipping management software like ShipStation allows you to quickly generate return labels and send via email.
• A self-service customer returns portal further simplifies processing for you and the customer. ShipStation also provides this feature.

Allow your customers to create their own return labels from your website. All they need to do is enter their order number and ZIP code and a pre-paid shipping label will be generated for them. No need to deal with support saving both your customer and you support team time. See their YouTube video and help article for more details>

• Try ChatGPT or Claud AI as a free return policy generator if you need help to write the actual written policy. Below is a sample return policy template generated from a simple prompt saying “create a 30 day return policy for an ecom shop”:

  30-Day Return Policy

  At [Your E-commerce Shop], we value your satisfaction and want to ensure that you are completely happy with your purchase. Therefore, we have implemented a 30-day return policy that allows you to return or exchange any eligible product within 30 days from the date of delivery. Please take a moment to review our return policy guidelines:

  1. Eligibility:

  • Only products that are in their original condition, unused, and in their original packaging are eligible for return or exchange.
  • Some products may have additional eligibility criteria due to hygiene or safety reasons, such as intimate apparel, perishable items, or personalized products. These items may not be eligible for return unless they are defective or damaged upon arrival.
  • Products purchased during a promotional sale or with a discount code may be eligible for return, but the refund will be processed for the amount paid, excluding any discounts applied.

  2. Initiation of Return:

  • To initiate a return, please contact our customer support team within 30 days of receiving your order. You can reach us through [contact information].
  • Please provide the following details: order number, item(s) you wish to return, reason for return, and any relevant supporting information or images, if applicable.

  3. Return Process:

  • Once your return request is approved by our customer support team, we will provide you with a return merchandise authorization (RMA) number and instructions on how to proceed.
  • Please securely package the item(s) to be returned, including all original accessories, manuals, and any free gifts received with the purchase.
  • Clearly write the RMA number on the package for easy identification.
  • You are responsible for the return shipping costs unless the return is due to our error or a defective/damaged item.

  4. Refund or Exchange:

  • Upon receiving the returned item(s) and verifying their eligibility, we will initiate the refund process.
  • Refunds will be issued in the original form of payment used during the purchase.
  • If you prefer an exchange for a different size, color, or a different product altogether, please specify it in your return request. We will do our best to accommodate your request, subject to availability.

  5. Processing Time:

  • Once we receive the returned item(s), please allow [X] business days for us to process your return and issue the refund or exchange.
  • Please note that it may take additional time for the refund to reflect in your account, depending on your financial institution.

  6. Non-Returnable Items:

  • Certain items are non-returnable, including but not limited to:
    • Personalized or custom-made products.
    • Gift cards or vouchers.
    • Software, downloadable products, or digital content.

  7. Damaged or Defective Items:

  • If you receive a damaged or defective item, please contact our customer support team immediately. We will guide you through the return process and provide a replacement or refund as per your preference.

  Please note that this return policy is subject to change without prior notice. We recommend reviewing the policy on our website at [website URL] for any updates or modifications.

  We hope this return policy provides clarity and assurance for your shopping experience at [Your E-commerce Shop]. If you have any further questions or need assistance, please do not hesitate to contact our customer support team.

  Continuously Evaluate and Optimize

  • Closely track return rates, reasons, operational costs - identify problem areas and holes in your policy.
  • Experiment with tweaks to reduce losses and find the optimal balance for profitability and customer satisfaction.

  Remember, the goal of your returns policy is happy repeat customers who build lifelong loyalty to your brand. Put thought into policy guidelines and processes to create a system that delights customers and benefits your bottom line.