Skip to main content

How to Create a Return Policy for Your Business (with Template)

This is the second entry in our series of policy explanations and template to get your ecommerce website setup properly and best serve your customers. If you haven’t already, go check out our article about Creating a Shipping Policy.

As the owner of an eCommerce site, a clear return policy is your customers’ safety net. It’s not a promise that things will go wrong, but that your company will do something about it if they do. This agreement, when easy for your customers to see and understand, can do wonders for your business’s reputation as well as its efficiency.

Return deliveries can be the result of damaged items, lost merchandise, or simply customer dissatisfaction. Depending on your industry, an eCommerce site can deal with returns daily, from clothes that didn’t fit right to products that broke in the mail. Returns are going to happen. And when they do, your site needs a policy in place to handle them efficiently.

Customers need to see how returns work when they visit your site, including terms and conditions, exclusions, procedures, and the right contacts to get the help they need. Without this information, an eCommerce site can lose efficiency, professionalism, and return customers. In other words, sites without return policies pay for it literally.

Rather than regret the possibility of returns, use them to your site’s advantage with a clear policy that smooths out the business agreement between you and your customers. The best businesses aren’t those that handle zero requests, but the ones that handle a ton of requests well.

What is a Return Policy?

A return policy lists the rules and conditions for returns on your eCommerce site. Whether merchandise was damaged or simply unwanted, customers need to see how things can be returned and for what reason a return will be accepted. They also need to see what can’t be returned.

This information includes not only the conditions for when a return is valid but also the timeframe customers must do it in. Refunds seem like a loss of profits, for good reason. However, they are not as great as the loss that can occur when customers do not return to your site due to a lack of information.

Often, a clean return that meets customers’ expectations means more profits through return business than the loss of that sale. Where do they get those expectations? That’s precisely where the return policy comes in.

This works to your business’s benefit but can also hurt your conversion rate if the policy isn’t refined. If the policy is too strict, or too much of a strain on your staff to uphold, returns can negatively affect your site’s reputation online. This is why concise, optimized information is essential for an effective eCommerce return policy and your entire eCommerce fulfillment operations.

Returns vs Exchanges

While these terms can be used by customers interchangeably, those who own eCommerce sites have to know the difference. As you may know, customers often make the call on whether they want to return their item or exchange it.

The difference changes their relationship with your customer service team. Customers that request returns want their money back because they’re dissatisfied with their purchase. Those that want exchanges still want the product but would like to receive a new one.

Your customer support team needs to know how to handle each of these situations and differentiate between them quickly. This way, customers can efficiently begin the process that will help them get what they need. Since exchanges do not include refunds, they are cheaper for you and often less complicated to process.

Returns require refunds and an understanding between you and your customer about what is available to be refunded and how to do it. This is why optimizing the information you include in your return policy is so important.

What Should be Included in a Return Policy?

Return policies should include information unique to your eCommerce site. However, there are also a few things that every return policy must have in order to be the versatile resource you intend it to be. This information includes:

  • Distinguishing between the items on your site that can be returned, and which can be exchanged
  • When returns or exchanges take place or the timeframe from the purchase date to the end of the returns period
  • Special conditions of return, such as whether returns need to be sealed
  • Clarify which items cannot be exchanged or returned
  • List types of return credit, including cash refunds, store credit, and product exchanges
  • State how customers should begin the return/exchange process
  • Link to the contact information to your customer support team or the relevant pages/email addresses

How a Return Policy Benefits Your Business

A prominent return policy on your eCommerce site reorients your business model to focus on your consumers. When prospective buyers visit your site, they will look for a concise return policy, especially if you can offer one for free. Offering no-hassle return policies increases the number of purchases that sites attract.

If your business relies on small, consistent purchases from returning customers, an attractive return policy increases your conversion rate. Customers look for sites that put their needs first. Even if you lose money on the first return or exchange, the right policy benefits your site in the long-term by improving the return rate of your customers.

And remember customers that return also leave positive reviews. For eCommerce sites, word of mouth goes a long way towards attracting new customers and keeping old ones. Therefore, an attractive return policy has an identifiable positive effect on a business’s conversion rate.

The Takeaway for Businesses

As the current or prospective owner of an eCommerce site, a page devoted to your return policy has a proven positive impact on your conversion rate. A concise, clear policy sets your customers’ expectations realistically and guides them to the appropriate page to initiate their returns.

This not only allows customers to see your policies and how they can benefit from them but also increases the efficiency of your business by freeing your staff from answering the same questions repeatedly. The right return policy improves your customers’ confidence in your site, optimizes their buying experience, and increases positive word of mouth online. In other words, a customer-focused return policy is the engine that powers your eCommerce business’s conversion rate.

Include helpful, concise information on your return policy page based on the above information to assure customers that you put their needs first. In a competitive eCommerce market, new customers prioritize sites that take responsibility for the risks of their transaction. And return customers only return when they know that your policies benefit them.

Get The Return Policy Template