What you need to know about return policies for your products

Whether you accept or do not accept returns, a well-written policy informing your customers of what to expect can be a powerful business tool. It may sound like just another thing to attempt to fit into your busy schedule, especially if you don’t allow returns, but it is a necessity. It will keep your customers happy and protect your bottom line.

Where do you begin when trying to decide whether to allow returns or not? A good place to start is with any applicable laws. Once you know how you will (or will not) be legally bound, then you can consider the balance between your customer service policy and protecting your business. Once you have crossed these bridges you can review your policy options; allow returns, don’t allow returns, or both.

Return Policies & The Law

In general, merchants are not required to accept returns of goods. However, most goods are covered by one of the following warranties:

  • Express Warranty: Most merchants who sell large or expensive items (e.g., washing machines, cars, etc.) make this type of warranty, which are governed by federal law. An express warranty is made from the merchant to the consumer, most often in written form. The warranty generally says that the merchant ‘stands behind’ the product and if the product fails to live up to a certain standard a return, refund, or repair will be allowed.
  • Implied Warranty: Most sales of goods not covered by an express warranty are still covered by an implied warranty, which are governed by state law. There are two kinds of implied warranties:
    • Warranty of merchantability: This means the product must work for the ordinary purpose of the product. For example, a pen must be able to be used to write.
    • Warranty of fitness for a particular purpose: This means that the product will work for a particular purpose stated by the merchant. For example, a pen that the merchant says can write on an unusual surface must be able to write on that surface.

If an implied warranty is breached, most state laws will require a return be allowed. In addition, most states have laws regarding how a merchant is required to inform consumers of the return policy or whether returns are not allowed.

Some retailers attempt to avoid implied warranties by selling items “as is”, however many states do not allow this distinction to exempt a product from the implied warranties.

Customer Service vs. Protecting Your Business

Your customer service philosophy will play a large role in your decision on whether to offer returns or not. While choosing your return policy, it is obviously important to keep the needs of your customers in mind. The prevalence of return policies in today’s world has lead to many consumers assuming that returns are always allowed. Further, many consumers assume that returns will be easy and free-of-charge. Offering a return policy may be the key to keeping your customers happy and coming back.

Despite the common customer service theme of ‘the customer is always right’, returns just may not work for your business. Offering returns may be too risky for your business, such as if all of your products are digital.

Whether returns are feasible for your business or not, customers will be happier with their experience if they are informed. Providing easy to find and easy to understand information on your policy of accepting or not accepting returns will go a long way in customer satisfaction.

Return Policy Options

So what are your options? The three basic options are:

1. Allow Returns on All of Your Products

Allowing returns is the most customer-focused option. Many customers feel safer just knowing a return is allowed, whether they intend to do so or not. For some, the absence of any return policy can scare them away from purchasing at all.

2. No Returns

Allowing returns may not be the best decision for your business. If allowing returns negatively affects your bottom line, then it just may not be feasible. For example, if your product is digital, then a return policy can be very difficult for your business. Customers could easily abuse returns.

3. Both

You may be able to find a middle ground between allowing all returns and none. For example, if you sell a hard copy of a book and an e-copy of the same book, you may be able to offer a return within a specified time period for the hard copy, but no returns for the e-copy.

Writing Your Policy

You have chosen what should go in your policy, so now it is time to write it down. Regardless of what you have decided, there are two tips that are vital to drafting a good policy:

1. Keep it Front and Center

A perfectly crafted policy will do you no good unless the consumer is aware of it. Make sure that you place it front and center so that it is easy for the consumer to find.

2. Keep it Simple

If you want your policy to work for you, make it simple! Don’t use hard to understand language or ‘talk around’ what you are trying to say. You want the consumer to understand your policy in advance of purchase otherwise it does little good for anyone.

If you choose to allow returns there are a few additional considerations you will need to take into account:

  • Cash, Exchange, or Credit

Just because you allow returns doesn’t mean you don’t have some control over how they will affect your business. You may decide to only allow one type of return, one type of return for one product and another type of return for a different product, only exchanges, or any other number of other combinations.

  • Time Limits

Make sure to include a time limit for how long your customer has to make a return. Deciding how long to allow is where you must balance good customer service and the needs of your business. The window should provide adequate time for a customer to receive the item, make a decision, and take steps to return the product. On the flip side, having too long of a window could create difficulties for your business.

  • Re-stocking Fees, Return Shipping Fees, or Free Returns?

Consumers today often look for free shipping and free returns while shopping. For small businesses, a re-stocking or return shipping fee may be necessary in order to financially allow returns without damaging your bottom line. If you choose to include such a fee, clearly state what is expected of the consumer in the event of a return. While a free return can be great for customer satisfaction, it just might not be feasible on the business side.

These decisions may seem overwhelming and you may be tempted to ‘copy and paste’ someone else’s policy, but don’t! It will be worth the effort to write your own policy to best suit the needs of your customers and your business.

What you need to know about return policies for your products

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