How to write the best eCommerce return policy for your small business

6 MINS Team

No matter how successful or large your eCommerce brand is, you’ll have to deal with returns. It’s inevitable. Many different reasons account for customers returning products they buy online. They may receive an item that’s been damaged during shipping, or one that’s defective. They may get a piece of clothing that’s the wrong size or color, or they may simply change their mind about the purchase. Whatever the reason, once you’ve received a return, there isn’t a lot that you can do besides providing your customer with a refund or replacement. 

Here’s some good news though: Even though returns will never be completely eliminated, they can be reduced. One way to do this is to offer a clear, concise, and easily understood return policy. But first, let’s take a look at just how rampant returns are. 

eCommerce returns by the numbers

According to the National Retail Federation (NRF), the total amount of online sales returns for 2020 was about $102 billion, which is double the amount that was returned in 2019. In the same report, the NRF found that for each $1 billion in sales, retailers have about $106 million in returns on average. That’s almost 11% of sales that are returned. 

As you may have guessed, clothing (including shoes and accessories) is the category that has the most returns, followed by electronics, furniture, home décor and garden, and food items. If you sell apparel, you can expect a return rate of as much as 30%. 

Here are some best practices that small business owners can use to write a good return policy:

1. Be clear

Handling returns starts with your return policy. There isn’t a set policy that is right for every eCommerce seller, so you have to make your policy unique to your business. For example, if you sell expensive electronics, you probably don’t want to have a “no questions asked” policy. However, that may be a perfect strategy for a clothing retailer who wants to stay competitive. 

While your store’s return policy should fit your business, there are some best practices that all return policies should follow, including: 

  • Visibility – Your return policy should be easy to find on your store’s website. At the minimum, there should be links to it on your checkout page, FAQ page, and in your website footer. 

  • Clarity – It’s critical that you don’t leave any room for interpretation in your return policy. It should include the following: 

    • How long the customer has to make a return

    • Clear instructions for what items can or cannot be returned

    • How customers will be refunded (credit to their payment method, exchange, store credit, etc.)

    • Who is responsible for return shipping costs 

    • How long the process will take 

Keep in mind that every return policy is an opportunity for branding, as well as for customer retention. Make sure that your return policy reflects your brand.

Read more: 7 common eCommerce website design mistakes you might be making

2. Offer customers a choice of return type

When a customer places a return request, offer them a few different options. Perhaps they would prefer to exchange their product for another one of a different size, color, or other attributes. Maybe they would like to have a store credit or gift card to use at a later time. Or they may simply want a full refund. Offering choices of return type to your customers is good customer service and it may also help with customer retention. These choices can be written down on your return policy or you can simply choose the best one to offer to the customer.

Male business owner looks at his notebook and laptop while working

3. Require a return request form

There are many possible reasons for returns, so be sure to ask on the return request form. You have to know why products are being returned to understand how to reduce your return rate. For example, if a product is returned by multiple customers, it may be due to a manufacturing defect, in which case you may need to switch suppliers. If you’re constantly performing exchanges on a certain t-shirt, it may be because its sizing isn’t accurate, but with a simple note in the description about its true fit, you can eliminate some of the returns. 

4. Indicate shipping schedule– and make it fast

It’s important to make sure that your order fulfillment and shipping process is quick. You don’t want to make customers wait too long for their orders. Delays in shipping can result in customers canceling orders and finding another merchant to buy from. 

So, speed your delivery process and allow your customers to track their order from the time it enters fulfillment until it’s delivered to their door. 

Read more: How Fast Is Fast Enough for Online Shipping?

5. Keep customers in the loop about their returns

Just like it’s a good idea to let customers know the status of their orders, you should also keep them in the loop about returns. During the return process, customers should be able to track the product as it’s headed back to your warehouse and be notified when it arrives to confirm you’ve received it. They also need to know an ETA on when they should receive a refund or replacement. Email updates are good, but if you can use Facebook Messenger or SMS, they will likely get the updates even faster. 

Remember, brand perception is the name of the game for online businesses. You don’t want any negative customer feedback to sully your reputation with other potential customers. 

Tracking to mitigate returns

You have to track the right metrics to understand your return rates and whether your efforts to lower them are working. Look for an eCommerce solution that allows you to keep track of returns metrics like: 

  • Return rate for each product

  • Return rate for each product category or line

  • Return rate for products overall

  • Return rates for specific time periods important to your business (holidays, seasonal, etc.) 

  • Return rates by geographical market

  • Customer satisfaction score after return interactions

With nearly 11% of all eCommerce purchases being sent back to retailers, returns are not something you can afford to ignore. Do all that you can to lower your returns by using the best practices on writing a return policy listed above, but keep in mind that some returns are unavoidable. When it happens, find out why and track responses so you know where you can make further changes to lower your return rate.

In the bustling world of eCommerce, having a well-crafted return policy isn’t just an option; it’s a piece of your business that can significantly impact your success. As small business owners running eCommerce shops, you understand the value of customer trust and satisfaction. A clear and customer-friendly return policy plays a pivotal role in building that trust. It reassures your potential buyers that if they’re not entirely satisfied with their purchase, they have a safety net.

This sense of security encourages hesitant customers to take the leap and make a purchase, knowing they won’t be stuck with an item that doesn’t meet their expectations. A transparent return policy showcases your commitment to exceptional customer service, reinforcing the positive perception of your brand. It’s not just about handling returns; it’s about cultivating lasting customer relationships and establishing your eCommerce shop as a reliable and customer-centric destination. So, whether it’s easing purchase anxieties or fostering loyalty, having an eCommerce return policy is a business-savvy move that every small business owner in the eCommerce arena should embrace.

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