How to write a clear return policy

Returns and refunds are a part of doing business online.

Your customer can be unhappy with their order for countless reasons – they ordered the wrong size, it arrived damaged, or it just didn’t meet their expectations. Or they may just have ordered the same item in different versions, for example jeans sizes, to try on at home. This practice is known as ‘bracketing’ and has become more frequent since the pandemic due to lack of changing rooms and the increase of eCommerce.

Without a proper system for managing returns, including a clear return policy, return requests can take up a lot of energy, money, and time.

The good news is that with a great return policy and the right return system, returns can go from a manual, dreaded task, to an opportunity that increases customer loyalty and generates more revenue. 

Table of contents

• What does a return policy mean?
• Why do you need a clear return policy?
  • The consequences of a poor return policy
• What do you need to include in your return policy?
  • What items are final sale i.e non-refundable
  • Should I offer free returns?
  • How long should my return deadline be?
  • How to manage return shipping labels?
• Where and how to display your return policy?
• eCommerce return policy template
• How to implement your return policy
• Why should you digitalize your return process?
• How Returbo can help you

What does a return policy mean?

A return policy is a set of rules a business creates to manage how customers return and exchange items they have purchased. The return policy informs customers what items can be returned, for what reasons, and over what timeframe the returns are accepted. 

Just about every retailer has a return policy, and so should your small business. 

Why do you need a clear return policy?

A good return and exchange policy builds trust between a business and their customers. In fact, giving your customers a clear and consistent way to return their items can increase conversions and lead to repurchase. 

While giving a customer a full refund may result in a loss of profitability, it can be tempting to create a complicated and restricting return policy. This, however, would be a mistake. 

The consequences of a poor return policy

Over time, customer complaints about your return policy can start to spread across social media, showing up as comments, negative reviews about your business, or even in Google searches. This is how a poorly written and implemented return policy begins to negatively affect your business reputation.

As your reputation turns downwards, you are likely to see a drop in the conversion rate of new customers and the overall customer satisfaction.

Processing every return manually is time consuming and expensive. If you don’t manage the time and cost of processing a return, it can prevent you from scaling your business.

At some point, most businesses will need to figure out a solution for returns that benefits themselves and their customers.

What do you need to include in your return policy?

Return policies may vary depending on your logistics and what products you sell, as well as where you are based. However, every policy should cover the following basics:

• What items can be returned
• What items can be exchanged
• What products are “final sale” (i.e., non-returnable, non-exchangeable)
• When things can be returned or exchanged (i.e., 30 days from purchase date, with purchase receipt)
• In what condition can items be returned (i.e., lightly worn, with tags still on, original packaging, original condition, etc.)
• What products can be returned for (i.e., store credit, refund, a product of equal value, etc.)
• How to initiate a return or exchange (i.e., an email address to contact or a web page to visit) 
• Whether or not the returns are free

What items are final sale i.e non-refundable

You may have some items that are not eligible for a return. This could be sales items or hygiene products, such as make-up or underwear.

It is important that you outline exactly what items are non-refundable in your return policy so that your customers are aware before they purchase. You may also include this information in other places during the customer journey, such as the product page or right before check out. 

If you do not include this, this could negatively affect your brand as customers may purchase an item, only to find out that they cannot return it. 

Should I offer free returns?

Majority of shoppers want free returns, in fact, 76% of consumers stated that it was an important consideration factor when shopping online. This makes sense as free always feels better. 

The question is therefore whether or not you as a business actually should allow for this or not. While customers may prefer free returns, it may not always make financial sense to your business. After all, the logistics and return shipping fees results in an additional cost to your business that impacts your bottom line. 

Therefore, you need to analyze whether or not these extra costs associated with returns is something you can manage financially today. If not, you need to clearly outline in your return policy what you charge for returns. 

How long should my return deadline be?

The most important thing is to inform your customer how long they have to return an item. Generally, this is usually between 14 to 30 days after the order was shipped, while others prefer up to 365 days – it depends on your business. The majority of customers return their items within the first couple of days of receiving their order. 

There are also laws surrounding this.  Within the EU for example, if a customer has bought a product/service online, they have the right to cancel and return their order within 14 days, for any reason and without a justification. There are some exceptions to this, and therefore it is important for you to check your country’s rules regarding this.

How to manage return shipping labels?

There are a couple of different options to give your customers their return shipping label. 

• Customer managed – the customer has to buy their own return label
• Pre-printed and shipped with every order
• Per request – customer request a return through customer service 
• Digital copy – attach a return label to every order confirmation email as a digital copy
• Autogenerated through a digital return form – your customer request a return and automatically receives a return slip as a pdf or a QR code

Where and how to display your return policy?

Firstly, make it readable for your customers, not lawyers. Use simple and clear text and make it easy for your customers to find it.

Secondly, include links to your return policy in places where it is hard to miss. A few places you can list it includes:

• Your website footer
• Website banner
• Product page
• FAQ page
• Order notification emails
• Website chat

As mentioned above, your business’ return policy can be a key to increasing the conversion rate.  Therefore, a great return policy is one clearly outlined on your website so that it cannot be missed. 

eCommerce return policy template

Take a look at our other blog post for a basic return policy template. 

How to implement your return policy

Pre-printed return labels

The printed return label is included in every order you send out. 

Pro

This saves time for your team and your customers as the customer can just attach it to their package and no back-and-forth email is needed. 

Con

• Not the best for the environment as customers who don’t want to return their items just throw the label straight in the bin. 
• Encourages customers to return as it requires little effort on their side. 
• You never know you have a return incoming until it has already arrived – can make it hard for you to plan staffing and such.
• Lack of data collection on why your customers return.
• Customers can’t track their return status, resulting in unnecessary customer service emails.

The customer does it all

The customer buys their own return slip and then sends their return to you. 

Pro

You won’t have to pay for the return shipping label and fewer will return due to the cost and the hassle.

Con

Because of the hassle, your potential conversion rate may decrease, as customers don’t want to deal with returning an item they do not like. Additionally, similar to pre-printed labels, there is a lack of data collection, uncertainty with the return status, and lack of knowledge whether you have an incoming return. 

Email driven

Customers contact customer service and request a return through email. This involves back and through emails. This is a time consuming and fully manual alternative as this means you need to look up the order number, generate and attach the return slip to the email, and manually refund them when the process and quality check is done.

Pro

You will have control which and when returns will come in. 

Con

It is time consuming, difficult to collect data such as return reasons, unless you remember to ask and note it down after each correspondence. 

Once again, customers lack overview of their return status, meaning that you will get more emails asking about the status. 

Use a return management tool

The return becomes fully digital for both of you and your customers. It is self service and gives both parties the data and insight that they need.

Pro

Your business has full control over the return platform, can collect data, customers are kept in the loop throughout the whole return process, and you can decide whether or not this item can be returned. Furthermore, all refunds happen through the software – no more switching between programs. 

Con

Most of these softwares are paid solutions that run on subscriptions and/or usage basis. 

Why should you digitalize your return process?

Even with only 5 returns per week, the manual labor can add up. Before starting with Returbo, some of our customers spent 15 minutes per return in administration time alone! While this can be manageable for now, it can create issues as you scale. Therefore, investing in a return management tool can help you right from the start by decreasing administration time while decreasing unnecessary returns.

How Returbo can help you

Returbo makes return management easy, it automates your manual tasks so you can spend time on what matters the most – growing your business. 

Returbo is integrated with Shopify and helps you  manage all your returns online, at the same place where you manage your normal orders. Customers fill in the digital return form on your website, select return reason(s), and get the shipping label either on the confirmation page  and/or in their email. Returbo allows you and your customers to keep track of the return statues throughout the whole process.