eCommerce Refunds and Returns: A Guide to Your Policies
In a sea flooded information, it’s difficult to determine good advice from watered-down rubbish. And, this is the information age, so you will find thousands of articles with guidance for creating online store policies. Some of them will be useful, but most of them won’t.
The greater portion of free eCommerce advice online is written by people who have no idea what they’re talking about. It wouldn’t be shocking if 90% of what you read is written by people who have never even worked with an online store. So, how do you know what advice to follow?
Don’t follow directions from anyone who doesn’t know, firsthand, how to lead. Find someone who has a proven track record, then listen to them. We’re here to explain everything you need to create a reliable refund and return policy.
You Can Trust Our Advice
Gorgias is partnered with leading eCommerce platforms and tools. In fact, we are a certified Shopify Plus partner. In addition, we’ve worked with thousands of online store owners in various capacities. The bottom line: we know what we’re doing.
Our customers are experts in their niches. We watch them do what they do, and we pay close attention. In fact, we’ve been taking notes the entire time as they’ve gone through trials and tribulations as budding online stores.
And, we’re always here to share what we learn. Here’s what we want you to know about refunds and returns for your online store.
What is a Refund and Return Policy?
A refund and return policy is a set of rules assigned to orders from your online store. It lays out the stipulations that you have regarding refunds for purchases and product returns. It defines the expectations that a customer should have if they aren’t satisfied with an order.
Clearly defined expectations enhance your customer relationships. And, since your shoppers’ satisfaction needs to be your number one priority, your policies are crucial.
Why do You Need a Refund and Return Policy?
Let’s run through a couple of hypotheticals together. You need to understand why it’s crucial to outline your policies in an obvious place on your online store.
Scenario #1: Before the Sale
Imagine that a new website visitor lands on your store and they’re interested in an item you offer, but they are still questioning whether or not to purchase from you. Yes, your pricing strategy is optimized, and you have the best deals. In fact, it’s customer appreciation week, so you’re running a sale on that hot item. So, it seems like you would naturally land a sale.
But, you don’t. The shopper couldn’t find out whether or not you offered returns without reaching out to customer support, they were ready to order right away, and the checked out your competitor.
[Screenshot source: Sephora]
When the shopper landed on your competitor’s online store, they decided to pay twice the price. They weren’t sure they would be satisfied with the product and wanted to safeguard their purchase with the brand who would definitely let them return the item for a full refund.
In this case, you lost out on a sale because your competitor beat you to the punch by sharing their policies upfront.
Scenario #2: After the Sale
Now, visualize this: You’ve sold a high-ticket item, and it’s truly exciting. The customer is stoked to receive it and you’re on cloud nine because all the hard work has paid off. Finally, you’re landing the sales you aimed for with all the sweat equity you’ve put into your online store.
Of course, it goes without saying that all sales are final... Right? Well, actually, you’ve made an assumption that your customers know you don’t accept returns. But, you don’t realize this fact until it’s too late.
All of a sudden, you’re getting bombarded on Twitter because the person you thought to be a satisfied customer had a run-in with your customer service team. They decided they didn’t like the product and wanted to send it back. But, when they reached out for help with the process, you had no process in place.
[Screenshot source: Twitter]
Then, you’re getting poor reviews all over the internet, and you have to dig yourself out of a giant hole. It’s months before you remedy the problem and start selling enough products to keep your online store open, let alone generate a profit.
Scenario #3: Ding, Ding, Ding!!
Finally, picture that you have a structured return policy posted in an easy-to-find page on your online store. So, when a customer is making a purchase decision, and one factor is whether or not you allow returns, there is no problem. Your shoppers are informed about your policies before they invest in you.
Moreover, customers who didn’t check out your policy before they ordered can see it now. So, they don’t have to reach out to your customer service team to find out how the refund or return process works.
Even if customers who want to return an item are a little disappointed by the fact that they waited too long or they can only get store credit, they don’t have anything to be truly angry about.
[Screenshot source: Twitter]
A clear and structured refund and return policy will help you avoid the drama of a terribly dissatisfied customer (If you want to learn more about handling tense situations, check out these 12 crucial eCommerce customer service skills to master).
Here’s What to Include in Your Refund and Return Policy
Now you know why your policies are crucial, and you’re ready to learn how to create them the right way. Make sure you include all of the following.
Generally, your policies will outline everything about product exchanges, refunds, and returns for your store including:
- Whether or not you allow returns or refunds on products purchased through your online store. In some cases, returns just aren’t in the cards.
- The stipulations surrounding whether you will or will not facilitate refunds or returns. For example, maybe you choose to accept returns on broken or damaged products or only those in unopened packaging.
- How many days after receiving a product does the customer have to notify your company that they are interested in returning a product or requesting a refund?
- How your refunds will be disbursed. For example, store credit or refund to the credit card used to make the purchase.
- Who pays the shipping costs to return the product? Many online stores require that customers pay return shipping costs. But, others like Amazon provide paid return shipping labels that are funded by the company.
- Do you have different refund and return policies for customers in various locations?
If you sell digital products, your policies will require further information:
- Do you allow refunds on digital purchases like apps or media downloads?
- If a download link doesn’t work, what is the process for helping a customer access their digital goods?
If you include everything above, you should be good to go!
Does the Return Policy Depend on Your Country?
In some cases, you will ship to various countries. Of course, shipping overseas is more costly than shipping locally. So, what about international product returns?
When defining your online store’s rules and policies, you need to think about this. Would you offer the same rules for someone in San Jose as you would a customer in Bangladesh? If you don’t have an answer, read on.
How to Determine Return Policies for Multiple Countries
Do you want to offer returns and refunds internationally? If so you need to examine your business and decide how to handle this.
First of all, when you ship products to a customer, where are you shipping from? Some online stores have multiple warehouses where they store products for resale in specific regions. So, consider your product storage facilities.
Next, how long will it take to process returns for customers outside your target service area? If a customer in the UK must send a return to the US or Canada, how long will this take, and will it factor into the cost of processing a return?
Then, take a look at your shipping and handling costs for returns. If your policy states that the company will pay to ship product returns, can you afford international shipping prices? Perhaps, in this case, you would need the customer to pay to ship the product back to your facility.
[Image source: Marine Layer]
Finally, how many international customers do you have? If you’re only shipping overseas a handful of times per year, it may not be worth the effort of working out a second policy for your store.
Most retailers find that refunds and returns for multiple countries require multiple policies. But, the final decision depends upon your internal operations and your personal preferences.
7 Refund and Return Policy Examples to Inspire You
So, that’s out of the way. Now, let’s look at a few examples that you can use as templates for your online store’s return, refund, and/ or exchange policy.
1. MNML Return, Refund, and Exchange Policy
MNML outlines all of their policies on one landing page. As you scroll down the page, you come to the returns section where they outline their terms for sending back a product or order. In six friendly paragraphs, they let shoppers know their aim is 100% customer satisfaction and explain how the process will be handled.
[Image source: MNML]
Note that international returns will result in a $25 restocking fee, which helps them maintain associated costs. Clearance items are not eligible for returns. Customers have 30 days from receipt to request a return.
2. Rothy’s Returns and Exchanges Policy
Rothy’s offers free shipping and returns on all orders. They have a dedicated returns and exchanges policy page posted on their website. From this page, customers can request a return as well as read FAQs in an organized, dropdown format.
[Image source: Rothy’s]
Since they are an online and offline seller, their policies outline the processes for in-store and automated, online processing. In a nutshell, they try to make the process as easy as possible for their shoppers.
3. Timbuk2 Returns and Exchanges Policy
Timbuk2’s policies aren’t all that different from other online retailers. But, since they are a wholesaler as well as a retailer, they have an additional clause in their policy. The section referred to covers returns for Timbuk2 branded items purchased from other retailers.
[Image source: Timbuk2]
In the case that a Timbuk2 product was purchased through an external retailer, any return or exchange must be handled externally. This is a crucial point to consider if you offer your items at wholesale prices to unaffiliated sellers.
L’ange Return Policy
L’ange sells haircare products, which is a tricky business because some items have a shelf-life. So, in their policies, they list which products are eligible for returns and which ones aren’t. For example, styling tools are eligible for returns within 21 days. But, on-sale, free, and perishable products aren’t.
[Image source: L’ange]
In the case that customers order haircare bundles, some items will be eligible for returns, but the brand outlines a one-on-one process for discussing cases like this. Do you sell any specific items that it doesn’t make sense to return or exchange? If so, you’ll want to make note of this in your policies.
4. Sphero Returns and Warranty Policy
Sphero sells physical and digital goods. So, they include a detailed section in their policy about digital purchases to avoid confusion. In their case, digital products are not eligible for refunds.
[Image source: Sphero]
Note that Sphero’s digital good policy also covers digital product transfers. In the case that a customer is done with a digital item they’ve purchased, they may want to transfer use to a friend or colleague. In this case, that is not allowed. This is a crucial aspect of your policy to consider if you sell virtual products online.
5. Roolee Return Policy
Roolee outlines their policies on a dedicated returns page, which covers everything from when a return can be made to what can be returned. In addition, they spell-out their use of instant credit vouchers. Take a look.
[Image source: Roolee]
In this section, Roolee states that some returns qualify customers to receive a credit voucher that can instantly be redeemed with their store. They implement the process with a digital gift card. Is this something your online store has a need for?
6. Vincero Returns and Exchanges Policy
Vincero says that, within 30 days, a customer can return an unworn watch for a full refund. Aftermarket damages are not covered under their return policy. And, repairs are not offered.
[Image source: Vincero]
Covered in thier policy is timing, product condition, and instructions for returns. If you sell a luxury item and are willing to offer repairs, your return and exchange policy would be a good place to note this.
7. Love Your Melon Return Policy
Love Your Melon sells online and in-store. In their policy, they note that offline purchases aren’t eligible for returns. But, they offer full refunds within 30 days for online orders if the products are in their original condition.
[Image source: Love Your Melon]
Also noted is the difference between returns from overseas and those in the US. Returns made from within the United States are processed online through a partially-automated system, which brings us to our next topic.
Should You Offer Automated Online Return Processing?
Automated return processing is a preferred convenience for online shoppers. As a rule, the more customers you have, the more you should automate. And, as with all aspects of your online store, automation will streamline your processes, saving you time, effort, and money.
So, if you’re asking if you should automate the return process, our answer is ‘Yes!’ Automate as much as you can.
[Screenvideo source: Rothy’s]
How to Automate Online Return Processing
The easiest way to automate online return processing is to use a plugin or add-on.
Optimized return automation software should meet the following criteria.
- Integrate easily with your eCommerce platform, shipping software, and other tools.
- Provide customers with the ability to start an online return from your online store through a self-service portal.
- Generate shipping labels and in-store credit vouchers or gift cards.
- Allow customized branding.
- Collect customer data for reporting and strategy creation.
Find a software solution that does everything above and you’ll save a ton of time and energy on customer support.
You’ve got all the ideas you need to create a comprehensive, well-structured return policy for your online shoppers, so get to it. If you need help with any other aspects of your eCommerce customer service, find out how our solution can power your business and get a Gorgias free trial today.