What is a return policy?

A return policy is a set of rules that merchants establish to manage how customers return or exchange unwanted or defective products that they’ve previously purchased or received as a gift.

Return policies balance two competing needs. The first is a retailer’s revenue—you don’t want to have to pay sales associates to sell one item twice, especially if that item needs refurbishment. In this sense, it’s in a retailer’s best interest to be strict about returns.

But return policies are also considered an extension of the customer service that a merchant provides. If a return policy is too restrictive, especially around the holidays, customers may decide to go somewhere else. In this sense, it’s in a retailer’s best interest to be as open with returns as possible.

You can write a return policy that satisfies both these needs–the best ones are customer-centric and flexible to each case’s unique circumstances, while still protecting retailers from fraudulent returns.

How to write a return policy

Each retailer’s return policy should be unique to their business and the products they sell, but there are several things that a return policy should include to ensure that it’s clear and easy for customers to understand:

• The number of days or deadline to return the product.
• The type of refund they will receive (store credit, exchange, full refund).
• The information they need to bring in-store or send online for the refund (receipts, credit card, etc).
• Conditions the product must be in to be valid for return.
• Where to return the product, including if products bought in one location can be returned in another.
• How to return products purchased through ecommerce and who will pay for the shipping.

The importance of a customer-focused return policy

If you train sales associates to use the same positive, customer-focused service as they did at the initial sale, in-store returns and exchanges are a golden opportunity for your business to build a relationship with that customer, gather valuable feedback and suggest alternative products.

If you don’t, well, 64% of shoppers who have a negative experience when returning or exchanging a product say they’d be hesitant to visit the store again.

Having a positive outlook when it comes to returns and exchanges is a must if you want to increase your customer retention rate and get more repeat customers.