Why You Need a Return Policy on Your Online Business

Customer returns, though rather unfortunate, are all part and parcel of running a retail store. Companies that don’t have a clear return policy in place have a terrible rep often, and those that do enjoy increased sales and higher trust. As a consumer yourself, you must have also purchased items at stores where you know you can easily make returns, should you need to.

Running an e-commerce store is easier now than it was before. However, accepting returns now is still just as daunting as it was then. It might not have been your top of mind when your online shop went live. It is a crucial step, though, if you want to attract more customers to your site.

Why You Need a Return Policy

One of the main reasons, of course, and which we’ve already covered, is that having a return policy builds trust between you and your target audience. For one, it shows that you guarantee that they will like the item they bought; secondly, it assures them that if it’s not what they wanted, they could always get their money back.

While it seems counter-intuitive, having a return policy could increase sales. A study conducted by the Journal of Retailing back in 2017, showed that the more lenient you are with your policies, the higher the chances that consumers will buy from you. The example given was a store having a 100% Money-Back Guarantee. If someone who was just considering purchasing from your store sees this, they would be more inclined to buy from you. The more people buy from you, the higher your sales. Even if half of a hundred consumers returned their items, you would’ve still made a profit.

What Your Return Policy Should Include

Managing returns can be complicated. Naturally, you have to study what sort of legal and financial impact accepting returns will have on your business. Should you offer refunds or store credit? Which one would attract more customers and give you more credibility? What will you do with the returns? Should you invest in reverse logistics software to manage your returned inventory? These are just some things you need to consider if you want to craft a return policy that benefits both you and your buyer.

Make It Convenient

Whatever policy you put in place, i.e., 30-day returns, free shipping on returns, you should make it as convenient and easy for the consumer. You could include printed return shipping labels with their order, for example. Some e-commerce sites even go the extra mile and design their packaging in a way that customers can use the same box or bag for returns.

Transparency is also vital when you’re crafting your return policy. A good return policy is detailed, can easily be found on the website, and makes the consumer feel like they are part of the decision process. Consider putting FAQs on your site detailing the exact method of returns. Vague language would only turn away customers.

We understand that starting an online business is risky enough. Still, if you have quality items, stellar customer service and air-tight return policy, you would have no problems attracting and converting your site visitors.