How to structure your returns policy for seamless operations

Returns are inevitable, no matter how well you’ve researched product-market fit, tested and optimized your SKUs, and streamlined your operations.

They are also more prevalent in eCommerce. At least 30% of all eCommerce orders are returned, compared to less than 9% for brick-and-mortar stores.

Although that may sound high, returns don’t have to be the bane of your business. In fact, you can use your returns process to differentiate your brand, enhance your buyer experience, and boost customer lifetime value.

A strategic returns policy and process can turn returns into part of your sales strategy. Returns are an inevitable reality in eCommerce, and customers seek out brands that make their lives easier and more enjoyable. Therefore, having a flexible and easy-to-understand returns policy can make the difference between losing a sale and gaining a new, loyal customer.

Understanding customer behaviors and expectations

It’s important to understand the reasons why people return products in the first place.

Buying online is a completely different experience than buying in a retail store, and it comes with different risks to buyers as well.

Some of the reasons for eCommerce returns include:

  • Item arrived damaged or defective (potential transit issue, potential manufacturing issue)
  • Product wasn’t as expected
  • Item not fit
  • Change of heart
  • Found a cheaper price elsewhere

There are plenty of reasons for eCommerce returns that don’t exist for retail. For example, shoppers aren’t able to touch and try items before making a purchase, which is one of the biggest reasons so many brands are turning to augmented reality and liveshopping to imitate the experience of in-store shopping.

The good news is 92% of customers will become repeat shoppers if returns are easy. Seventy nine percent of shoppers want free return shipping and more than half will check your returns page to review your policy before they make a purchase.

Here’s how to streamline your returns process and optimize your buyer experience.

1) Prevent returns before they happen

The best way to ensure your returns program runs without a hitch is to prevent returns in the first place. Ideally, they should account for very little of your business activity, with far more orders going out than coming back in.

There are a number of ways to prevent returns, and they start with setting clear expectations of your items upfront.

Be clear about your product offerings

An accurate product description plays a significant role in preventing returns. When crafting brand messaging and product descriptions, be clear about your offerings and service delivery standards which, in today’s market, are a product in and of themselves.

Your customer should know exactly what they’re buying and how it will be delivered to them long before they input their payment details. Maintain a positive buyer experience by proactively informing customers about your products and what to expect.

Optimize product pages

Every product page should present your buyers with all the information they need to understand exactly what they’re purchasing. An optimized product page will have:

  • A clear and concise product description
  • Rich media content, including photos and videos of the product
  • Specifications, including size or weight
  • Reviews or other social proof demonstrating the product quality
  • Keywords in the headline, subheadline, and product descriptions

Deliver on time

Shipping delays can happen, but they should be kept to a minimum. Communicate your fulfillment timelines and shipping times clearly on your home page, product pages, your confirmation email, FAQ sections, and throughout checkout.

Customers have grown accustomed to fast shipping thanks to services like Amazon Prime. Even if you’re unable to meet these speedy delivery expectations, the important thing is to make sure you deliver within the time you promise.

Tip: Send tracking numbers via email and SMS once a package has gone out, along with a link to check the status of their delivery.

Give time to get accustomed

As a closing tip for this section, I’ve also heard of brands with liberal return policies that give customers more time with their items.

As a result, those customers end up better learning how to use their products, and getting used to them, then deciding not to return them after all.

2) Make it easy to find your return policy

Most repeat customers have one thing in common; they have all had overall positive experiences with your brand.

This includes customers who, for whatever reason, need to initiate a return.

Making it easy to find your return policy provides important support to consumers at a critical time in the customer life cycle.

Display your returns policy and process on your website. Link to your returns policy and describe it succinctly on your product pages and everywhere else your customers may go looking for it.

Considering 62% of shoppers will check a returns policy before choosing to buy, you need to make your it’s easy to find.

Simple messaging such as “Free and easy returns” or “No questions asked” give shoppers peace of mind knowing you stand behind your products and will work with them to find solutions.

Link to your returns policy in post-sale communications. When you send order confirmation, shipment notifications, and even a thank-you note to customers, be sure to include a link to your returns policy.

This reinforces the notion that their satisfaction is your priority and that you’ll do what it takes to make things right if they’re unhappy.

3) Use straightforward language

You’ve made it easy for customers to find your return policy — but have you made it easy to understand?

If your returns policy reads like a Latin textbook, you need to reconsider your approach. Keep the messaging clear and easy to read for your customers, and make sure to spell out the terms of your policy.

This should include:

  • Timelines for returns
  • Acceptable conditions for returned items (e.g., new with tags, never worn, unopened, etc.). This may vary based on product type, such as baby items
  • Exceptions to your policy, such as personal care items or beauty products
  • Method(s) of refund
  • Any applicable return fees
  • Other necessary stipulations

It’s also important to note the differences between returns, exchanges, and replacements via warranty.

4) Be customer service-centric

The best returns programs walk customers through the process from beginning to end with top-notch customer service.

Make it easy to get in touch

Your buyers should know how to get in touch with customer support in a pinch. Don’t hide your contact information or make it hard to open a support ticket.

Offer multiple options for communication, such as live chat, phone calls, and email, and commit to a maximum response waiting period.

Post your contact information visibly on your website and social media platforms, too, so customers don’t lose time searching for it.

When customers reach out regarding returns, offer to walk them through the process and identify the best solution for their situation.

Consider offering free returns

Consumers have grown to expect free returns. In fact, 76% of customers reported that free returns are an important factor when shopping online.

By employing a no-strings-attached policy that allows customers to send items back without hassle, you reassure them of your commitment to their satisfaction and that you stand behind your products.

5) Ask for feedback

Asking for feedback might not be your favorite activity, but it’s an important part of a strong and successful returns program.

As a best practice, when a customer initiates a return, you should ask the reason for it. Did the item arrive late or damaged? Is it the wrong size? Have they found a better price? This feedback reveals actionable insights and valuable data you can use to improve your business.

You can also ask yourself, based on their feedback, if the issue was avoidable. Customer feedback can be used to improve your products, store, and processes.

Look for solutions

If the issue comes down to a customer experience problem, ask yourself: Can you make it better?

For example, if an item arrived damaged, offer to send the customer a replacement at no charge. If a customer has found a better price, offer a price match or credit towards their next purchase.

This is where a customer-centric approach comes into play. For a fantastic returns process, look no further than Amazon.

When a customer initiates a return through the retail giant, they’re given a list of reasons for the return that run the full gamut from wrong item to missing pieces and more. Once a reason is selected, customers are given a few options:

  • Chat with an Amazon Customer Service Representative (CSR)
  • Get in touch with the manufacturer/merchant
  • Proceed with returns and refund

By giving options and establishing paths for customers to take alternate actions, you can potentially avoid returns and improve customer experience by finding the best solution for everyone.

6) Review and update your policy as needed

Over time, your returns policy may fall out of alignment with your business needs, industry best practices, and even become a hindrance to your success. Like all aspects of your eCommerce business, your returns policy should be reviewed and updated regularly  to ensure it fits your current situation.

Watch for trends in returns

Trends in returns can speak to underlying issues that you can address. For example, are you regularly receiving return requests for damaged or late items? If so, you might have to reconsider your fulfillment and logistics processes and partners. If returns are often related to a quality issue, you may need to find a new supplier.

But trends in returns can be even more granular than that. Do you have repeat-return customers? Frequently check for any signs of eCommerce fraud that may be occurring to protect your business and your customers.

Monitor business impact

If you offer free returns and are drowning as a result, it’s time to reevaluate your policy and how you handle returns.

Because returns can cut into your profits, it’s important to stay up to date on your profit margins while weighing those against industry best practices.

Your policy needs to make sense for your business while still allowing you to maintain a competitive edge.

Understanding warranties, returns, and replacements

Adjacent to returns, customers may request to send back an item that’s under a replacement or repair warranty. In these cases, you and your customer have several options, depending on what makes the most sense.

There’s a big difference between returning an item and replacing an item (or parts) via a warranty program, and these policies should be clearly differentiated and communicated to customers.

If someone initiates a return request for an item that’s under warranty, communicate the terms of the warranty and explain their options.

For example, if a customer has purchased a brand-name coffee machine from your store with a manufacturer’s warranty, you can connect your customer directly with the manufacturer’s customer service team.

The manufacturer can then offer to send replacement parts or items directly to your customer or send you a replacement that can be shipped to the customer on their behalf.

Replacements and refunds

Structuring programs for replacements and refunds will depend on your business, the products you sell, and even customer preferences. Having said that, it’s pretty common to have nuances between your warranty, returns, and replacements policies.

Let’s say a customer reaches out to initiate a return and you discover the product arrived damaged as a result of the shipping process. You have proof of the damage through photos the customer sent in, so you offer them a replacement item. The customer agrees, so you ship out the replacement item immediately. Depending on the condition and the type of item, you might tell your customer to keep it, discard it, or send it back.

However, if the customer requests a full refund, you may choose to have them send the item back (for free) before you issue a refund.

You’ll need to weigh the pros and cons of this. On one hand, you’re deterring returns fraud where a customer asks for a refund but will continue using the item. On the other hand, it will cost you more time and money to have the item shipped back so you can inspect it, and it’s unlikely you will be able to resell it as new.

If the item is “fixable,” you can mend it and sell it as a refurbished item in your catalog. If it’s not fixable and/or could be better used for parts, you can save it for future warranty or replacement part requests.

There’s no fool-proof formula for these policies. Each merchant must assess his or her business and build a policy according to their needs based on best practices, real-world experience, and their own product offerings.

Wrapping up — Refine your returns policy to enhance operations and your buyer experience

Offering your customers money-back guarantees and liberal returns policies increases their trust in your brand. In addition, it makes the entire shopping experience feel less risky so shoppers are more likely to try your products and join your customer base.

Although it may feel counterintuitive at first, having a strong and easily accessible return policy is a fantastic way to improve customer satisfaction and increase brand loyalty, helping you to grow your business through repeat customers.