Product Return Policy: Why it is Important and How to Create One?

Product returns are the harsh realities of an online eCommerce business. 

While no business wants its product to get returned to the warehouse, they have to make peace with it.

It comes with building a customer experience-led business. 

Having a proper system for handling returns can not only satisfy the customers but also provide you with an opportunity to rectify mistakes and reduce returns altogether. 

What is a Product Return Policy?

A product return policy is a set of rules an eCommerce business or an online retailer creates to handle product returns from customers. Most eCommerce businesses provide a product return option to cater to customer concerns of product damage, wrong size, low quality, or any other reason. Product return policies clearly state the terms and conditions on which the products can be returned and even mention the timeframe over which they are accepted. 

Product Return Policy — Do You Need One?

The whole point of your eCommerce marketing is so that customers purchase your products, not return them. In a perfect world, once the customer makes the payment and purchases a product, that’s when your job is done and you can focus on retention and acquisition activities. 

But in a consumer’s world, product returns are something you have to facilitate for customer satisfaction and even your reputation. So in simple words, yes, if you’re functioning as an online business, you need a product return policy. 

Customer Trust: Online sites work on a lot of trust from customers. Customers are making purchases from your pictures and videos without touching or seeing the products themselves. If the products don’t meet customer expectations, they need to have the option to return or exchange them. 

Long-term Customer Satisfaction over Short-term Loss: For a business, you may feel that a return policy doesn’t work in your favour because of its high costs and loss of profitability. However, that shouldn’t stop you from having a return policy because a retail product return is still more acceptable than a customer complaint, poor reviews, and loss of customers. With product return, you’re already showing customers that you’re credible and put their needs first rather than the profit. 

Benefits of a Customer-centric Return Policy: If done right, return policies can turn into a powerful marketing tool. More than 50% of buyers are unlikely to buy a product if they don’t have a return policy. Recognising this need, you can build a business with a strong repeat purchase rate and benefit your business as well as your customer lifetime value. 

Tips for Creating a Product Return Policy

1. Clear and Transparent Communication

You need to be very precise while drafting your return policies so that you can plan and execute smooth reverse logistics. Be very clear about the protocols of product returns. Some of the things you should include while people are making a purchase are: 

• The items that can be returned 

• Items that can be exchanged. 

• Items that cannot be refunded or exchanged

• The time frame in which the products can be returned/exchanged. Some keep it for 30 days, some for 2 weeks. 

• Conditions for product return (having tags, not damaged, original packing, etc.)

• Means for product return (full refund, store credit, exchange for equal value, etc.)

2. Do Not Copy Paste

Each store has a unique return policy which may or may not work for your brand image or products. Just like how you prefer having personalised product descriptions and web copies that reflect your brand values, you need to have personalised product return policies that align with your supply chain system, the type of product you sell, and the brand protocols. 

Understand that a return policy is never a one-size-fits-all. You need to prepare it after taking into consideration the type of business you’re in and your target audience. Your return policies need to indicate your brand voice and it ultimately needs to reflect that your brand puts its customer needs first. 

3. Train your Employees

Once you draft the product return policies, ensure that your employees are thorough with the same. Your support team is the one that will directly be in contact with the customers. Customers will ask them numerous questions about if they can return the product, how the process goes, and when they will receive the refund, etc. 

Your job is to train your staff and make them competent enough to assist the customers in a quick and efficient way. Chances are employees will also often encounter rude and dissatisfied customers. This is why apart from technical knowledge, they also need to possess soft skills that can handle tricky situations and backlashes. 

4. Provide Multiple Return Options 

There are various ways a customer can return the product. You can provide in-store return options, mail-in returns, or have a delivery executive collect it from the consumer’s doorstep. But what is the point of having more than one return option? The more choices, the more convenient it is for the customer to choose their preferred return option. 

You can even consider offering multiple refund options. For example, provide store credit as a refund that customers can use to make their next purchases or even have them exchange the product for their other preferred item. This helps you address the needs of customers with different perceptions and preferences. 

5. Monitor the Return Data

While there is no doubt that you need a return system, you would want to reduce the number of returns to as few as possible. And for that, you need to monitor and evaluate the return data. Look for patterns. What are the products that are experiencing the most returns? What are the most common reasons that the customers are citing for returns? 

During which time frame do most customers file for returns? Is there a particular brand that customers don’t prefer? Do all the returned products have things in common such as poor quality, less value for money, etc.? Finding these answers will help you make data-driven decisions and look for opportunities to improve your online store. 

6. Streamline the Return Process

Streamline the return process so that your reverse logistics don’t consume too much time or cost. It is also necessary to make it easy for customers to place a product return. Use automation to create a self-service return process with clear instructions about product collection and refunds. 

You can send automated notifications and emails as soon as the return request is created. You can then restock the inventory, make it available for sale again, and process the refund or store credit to the customer. With automation at the right places, you can expedite the process and ensure customers get their refunds on time. 

7. Be prepared for the Cost Repercussions 

If the customer is placing a return as a result of shipping damage or an incorrect product, you need to own up to the mistakes and make it right. As a brand, you need to take accountability and defer from your policies for the sake of rectifying the mistake. Chances are the package reached the customer in a disoriented state well past the delivery date or resulted in a default due to the wrong packaging. 

Fair play would be to offer a product exchange or provide a full refund to the customer. That way, customers can at least get some compensation in return and consider making another purchase. These situations can easily occur in supply chains and pose an additional and inevitable cost for the online store.

8. Collect Customer Feedback 

Finally, no one can help you improve your product return policies than those at the receiving end of it — your customers. Be proactive with customer feedback by asking shoppers to rate their experiences with your return policies. Collect their opinions through surveys, reviews, and direct feedback channels. 

For example, the customers may not be happy with getting store credit instead of cash refunds or they may not want to exchange the product for another one. If a majority of the customers feel that way, consider having multiple refund options or iterations in the exchange policies to value their opinion. The feedback offers more profound insights into how the customers feel and shows your commitment to continuously improving the return process. 

9. Use the Right Technology 

A return management system will play a crucial role in your supply chain and the ultimate success of your product returns. You need to find a POS system that can quickly process product returns and handle volumes. Additionally, you need automated return management systems, tracking tools, and customer self-service portals. 

It leads to transparency in return procedures and helps retailers manage returns more efficiently and effectively. Online store platforms also allow customers to automatically place a return request and a ticket is raised on the return platforms. It also allows customers to upload product photos for verification and lets customers print their own labels for shipping. 

Facilitate eCommerce Returns with PACK & SEND 

The best way to facilitate product returns is through partnering with a third-party logistics provider like PACK & SEND. Doing so helps you create a robust return process, gets you access to advanced resources and keeps your product returns optimised. Contact us to learn more about how we handle product returns and meet timely and satisfactory delivery requirements.