Tips for a Solid Return Policy

I just read an article on Daily Finance titled “The Nine Businesses Americans Complain About the Most.” E-commerce, in general, ranked 8th on the list, with the top complaint being the seller’s “failure to refund money when product doesn’t arrive or arrives damaged.”

I worked for an e-tailer running a Volusion web store several years ago. Our product was a specific line of high-tech consumer electronics which, as you can imagine, resulted in heavy returns – mostly due to consumers not fully understanding the product and its technology.

We had one of the worst return policies I’ve ever encountered; our policy was intentionally vague, which gave the owner a lot of room to make case-by-case decisions for each return. A byproduct of this terrible policy was that it 1) deterred smart shoppers and, 2) made our sales and customer service staff sound like kids on a first date when the customer asked, “What’s your return policy?” Umm. The response may as well have been, “Let’s talk about that when you decide to return it.”

To avoid becoming a negative statistic or having your company name populated in SERP as part of the listings of complaintsboard.com and ripoffreport.com, here are some brief tips to avoid scaring off your customers before they buy, and pissing them off after they buy.

Transparency

First and foremost, be completely transparent about your return policy. Instead of hiding your returns page in your FAQ or help section, place a “Returns” link in your footer that appears on each and every page. If your policy varies depending on the product (different materials, supplier rules, sales items, etc.) consider creating an extended information tab for each product where you can specify that product’s return eligibility. Include links to your return policy in your order confirmation e-mails and on paper invoices.

Simplicity and Ease of Use

If you’re open about your return policy, and you make it easy for customers to view that information, but then give them the runaround when it comes time to get a RMA or shipping return label, you’re doing your company a disservice.

When a customer requests a return, don’t make them do all the work in some attempt to deter them from following through on their return. If a customer wants to return something, they will return it – their satisfaction with you will be dependent upon if and how you facilitate that transaction – so why not make it fast and easy?

Take a few minutes out of your day to take care of your customer; explain packaging requirements, spend a few bucks on a shipping label, get that RMA over and done with and move on. Yes, it’s a pain and it costs you a finger full of money, but it beats the hours and days you’ll spend defending yourself against chargebacks, negative reviews, and issuing damage control statements after you’ve been slammed on Facebook and Twitter.

Always Favor the Customer

Most banks won’t honor your request for a merchant account if you don’t have a return policy – it’s all about consumer protection, a fact you should keep in mind. Yes, it’s important to protect your business, but return policies are for customers, not for you – that’s what the employer I mentioned earlier couldn’t understand.

Always slant your return policy in favor of your customer. If you screwed up, or your product was damaged (regardless of how, when, where, or by whom it was damaged), or if your website listing was inaccurate – refund the customer’s money.

Refund return shipping fees when possible

One of the many e-mails Allparts receives praising their service

Do Away with Restocking Fees

Remember – your return policy shouldn’t be a deterrent – so don’t charge a restocking fee unless it actually costs you something to restock the product. If I buy a product from you, never open it or damage it, return it to you, and get charged a 15% – 20% restocking fee, not only will I never buy from you again, but I’ll invest the money you’ve taken from me in destroying your name on the web.

 

About Dean Peckenpaugh

Dean offers small business consulting services at DeanP, LLC - specializing in e-commerce and operations. Visit the contact page to request a consultation.

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