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Ecommerce Return Policies: Guide, Stats & Template Generator

Implementing a good ecommerce return policy is one of the most profitable decisions your brand can make. Engineering the right policy will mitigate anxieties, increase conversion, and cut down marketing costs by building long term customer loyalty.

 
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What is the ultimate return policy? We’d describe it as an effortless experience driven by a self-service flow that empowers users with proactivity and clarity. It firmly lays down the ground rules to maximize agent efficiency, but manages to remain flexible, intuitive, and fair for customers at the same time.

 

If this sounds daunting, or unachievable, don’t worry! We’ve put together this handy return policy checklist to help you cover all the bases. Whether you’re currently at the drawing board trying to draft your first policy or working toward enhancing your existing flow – there’s something here for you.

Chapter 1

Setting Expectations: Planning Your Policy

Chapter 2

Accessibility: Your Policy in Action

Chapter 3

Structure: Your Policy Behind the Scenes

Chapter 4

Re-Engagement: Driving Sales With Your Policy

Chapter 5

Customer Behavior: The Right Policy for the Right Audience

Chapter 1

Setting Expectations: Planning Your Policy

Create a Holiday Return Policy

68% of customers say they check the ecommerce returns policy before buying. Gift purchasing goes hand in hand with anxiety, so this number is multiplied during the holidays. Put shoppers at ease by implementing a gift return policy that makes it easy for recipients to make a return without their original packing slip. Extend your returns window during these peak months to ensure people aren't stuck with gifts they don't want. Not only will this increase seasonal conversion, but it gives you a chance to delight the gift recipient with a positive touchpoint later - creating a foundation for customer retention.

"34% of people in the US said they would return at least one of the gifts they got this holiday season."
- National Retail Federation

Implementing Restocking Fees

Restocking fees can stop 67% of customers from making a purchase. However, they can be a valuable tool in the fight against returns fraud.
Retailers dealing in high end electronics or expensive clothing for special occasions can tailor their policy to add a restocking fee to select items they think will put them at risk. This allows them to maintain a more generous policy for the bulk of their products while protecting their bottom line from scammers.
Just remember to be up front about which items will have a fee – customer’s do not want to be surprised.
 

“Unfortunately, due to an increase in return fraud, retailers are being forced to strike a delicate balance between servicing loyal shoppers and discouraging opportunistic criminals.”

– Joseph LaRocca, VP of LP, National Retail Federation.

Return Policy for Sale/Clearance Items

A generous returns policy is great for boosting conversion and customer loyalty, but what about for products you’re already selling at a loss? While an All Sales Final policy would be a bad idea to apply to your entire store, sometimes it’s necessary for sale and clearance items.
Just remember, transparency is key and the correct expectations need to be set from the start. Clearly convey which items fall under your no returns policy, so there’s no chance for any confusion or surprise later. Many retailers still offer to remedy poor experiences by accepting a return in the event of an item damaged in shipment or in a gift exchange situation.
By remaining fair you can protect your ecommerce business without sacrificing customer retention!
 

“Building trust through transparency isn’t just about attracting new business. More than that, transparency is about growing customer relationships capable of withstanding difficult challenges.”

– Michael Weinhouse, Founder/Co-CEO, Logical Position

Self-Generated Return Labels

Adding a pre printed returns label to each package eliminates customer pain points and creates an effortless experience. However, when you consider the cost of labels over time, higher rate of avoidable returns, and lack of customer insight, it becomes clear that this isn’t the smartest strategy.
Three benefits of implementing return label generator for your customers:
Re-Engagement: By bringing users back to your site to initiate the process, you have created an otherwise non-existent touchpoint in which to re-engage.
Data: User generated labels, when used as part of a self service returns flow, can provide valuable information about why the customer is making a return in the first place. This presents countless action items and gets products back on the sales floor faster.
Cost Savings: $0.20-$0.45 per label may not sound like a lot – but it adds up quickly.
 

The Average Cost of a Pre-Printed Return Label is Between $.20-$.45.

Self-Service Returns Management Software (Free or Paid)

A self service returns flow is intuitive and more convenient for customers.
Create an effortless experience by letting them initiate the process on their own, as well as the ability to generate their return label after you’ve reviewed and authorized the request.
The customer saves time while you save money and collect valuable data, which sounds like the beginning of a great relationship!

 

“81% of customers attempt to take care of matters themselves before reaching out to a live representative.”

– Matthew Dixon, Harvard Business Review

Returns vs. Exchanges

Ecommerce returns best practices are centered around maintaining a positive customer experience.
Customer Convenience: Offer in-store and mailback options, as well as store credit or cash refunds for items purchased online. Educate staff to handle returns efficiently.
Avoid Unnecessary Hassle: Enforcing an overly strict policy to minimize returns doesn’t work. Be generous with return windows and work with the customer to look up orders without receipts.
Practice Empathy: Empathy doesn’t mean giving the customer everything they want, but it does mean treating them like a human being. Follow the rules but treat every case as unique. Allowing a return of a notoriously hard to size product after the 30 day window elapses isn’t the end of the world for your brand but it’s something the customer will never forget!
 

“62% ‘would buy again’ from a brand offering free returns or exchanges.”

– Dotcom Distribution

Return Policies for VIP Customers

Segment your VIP customers and offer them a more generous returns policy. Since you can analyze their past activity you won’t have to worry about fraudulent returners in this group. Show your loyal fans some love with extended return windows, free return shipping, and a great experience.
 

“92% of shoppers say they would buy something again if they are happy with the return policy.”

– econsultancy

International Return Policy

Having your items shipped all over the world is a big chance for extra revenue, but requires a well-planned international returns policy. Brands who sell low priced items may be able to simply write the expense off, offering customers a full refund without shipping the product back. This is not an appropriate solution for brands selling more expensive items.
Segment international buyers and create a unique policy that minimizes profit loss while remaining fair. By creating a policy specifically for your global customers you can protect your bottom line and avoid limiting the generosity of your domestic returns.

 

“Global e-commerce sales are projected to reach $4.5 trillion by 2021.”

– Asendia

Establishing the Right Return Policy for Your Brand

Clearly communicate your RMA ecommerce process to customers. By getting the policy “on paper” you avoid handling each return on a one by one basis, which is both costly and inefficient. Make sure you hit all the important customer questions, such as:


What can/cannot be returned or exchanged?
What is the returns window and when does it begin?
Any condition requirements for a return?
What are the refund options?
How to initiate the returns flow?

 

“Great refund policies encourage customers to commit to a purchase and allow them to shop without fear of consequence.”

– BigCommerce

Increasing Return Timeframe

Many brands avoid offering a longer return window because they assume it will lead to a higher average ecommerce returns rate. However, psychology proves that quite the opposite is true.
The Endowment Effect tells us that people associate more value with an item when they feel ownership over it. When it comes to returns, giving customers some extra time to think over their purchase often leads to them deciding they’d rather keep the item than head to the post office.
On the other hand, if you had given them a shorter window they might have rushed out to beat the deadline and get their full refund. Since you didn’t actually impose any restrictions on the customer yourself there’s no damage to the relationship!
 

“Only 5% of shoppers say they return online orders more than 30 days after purchase.”

– ShipBob

Product Warranties

Extended-warranty programs make customers feel confident in their new purchase which is why companies offer them, right?
Actually, these programs are also huge money makers for brands. Warranty programs account for an estimated one-half of Best Buy’s profits, while AppleCare contracts provide Apple with upwards of $1 billion each year as well.
There’s a big market out there for warranties, even for smaller brands.
 

“$40 billion in extended warranties are sold annually in the US market.”

– Warranty Week

Chapter 2

Accessibility: Your Policy in Action

Linking the Return Policy in the Product Page

You've got strong images, in-depth product descriptions, an extensive FAQ, and even a healthy review section - but is your product page optimized for conversion? You might be ready to say 'yes,' but one third of customers would actually disagree. Adding the ecommerce returns process to your product page reinforces your commitment to your customers and mitigates potential anxieties for new shoppers. Failing to add the policy is a mistake as the average consumer will not leave the page to find it, resulting in a sale for your competition!

"1/3 of holiday shoppers say a store's return policy is an important factor when deciding which retailer to shop." - National Retail Federation

Make Your Return Policy Easy to Find

Burying a returns policy deep in a terms and conditions page is an old school tactic based on faulty logic. Brands who do this may succeed in mitigating a return, but at the cost of customer retention.
Today’s online shoppers expect a clear return policy that’s easy to find as well as understand. Add your policy to the product, cart, and checkout pages to be readily available for customers as they are purchasing. Placing the returns policy in your knowledge base and site’s footer will further build the essential trust needed to convert new customers.
 

“Would you rather your customers keep a product they didn’t love, or would you rather have a happy customer with an exchange?”

– BigCommerce

Free, Easy, & Hassle Free: Customer Centric Messaging

Focus on messaging a “free,” “easy,” or “hassle-free” return policy for your ecommerce website. Doing this creates two positive benefits for your brand:
 
  • Increased conversion during the pre-purchase stage by nullifying the fear of potential buyer’s remorse.
  • Increased customer loyalty when the time comes to follow through on these promises.
 

“68% of shoppers check a website’s return and exchange policy before making a purchase.”

– UPS

Clear Guidelines: Customer Facing Clarity

A returns policy template only works if customers can actually understand it. Here are a few tips for clarity:
Simple Language: Keep your policy concise and not open to interpretation by talking to customers on their level. Avoid going heavy on legal jargon, as that will only increase calls to your service department.
Return Window: Make sure customers know exactly how long they have to make a return. Note if specific items have different return windows to avoid any confusion later on.
Product Condition/Requirements: There’s a big difference between a returned product that’s unworn with the tags still attached and one that’s torn to shreds. Set expectations early by clarifying the condition products must be in for return eligibility. Include any further requirements such as return authorization numbers, receipts, etc so customers are prepared.
Refund:List the refund options (money back, store credit, etc) and their expected timeframe for completion.
Fees:Properly explain any fees associated with returns. Surprise fees are a big issue with customers, and a quick way to diminish any loyalty or retention.
Representation:Make your policy easy to find so customers can read it to boost conversion through pre-purchase confidence!
 

“50% of consumers believe online return policies are too complex and/or difficult.”

– Spork Marketing

 

Return Policy FAQ

Let your customers know that you’re one of them with an easy-to-follow return policy FAQ. Use this section to outline key details of your policy and get ahead of some of the most commonly asked questions.
Work with your service department to find key issues and inquiries they deal with often, and be sure to include these. By keeping this section updated you free up valuable time for your agents and promote pre-purchase confidence in your customers!


“Around 49% of retailers offer free return shipping.”

– econsultancy

 

Acknowledging Your Mistake

 
Finish difficult customer support interactions with a thank you message. This acknowledges your mistake and adds a human touch to the experience.
Handwritten letters are the most effective method, but are not required. Stick with what you can scale and be consistent with your efforts. Personalize the message with the customer’s name and include references to the interaction in question to avoid sounding generic.


“68% of businesses have lost a customer because they feel a company is indifferent to them.”

– Shopify

 

Nothing Says “I’m Sorry” Like a Coupon

 
You work hard to meet customers’ rising expectations everyday, but one bad experience could set you back big time. Luckily you don’t need to be a time traveller to rewrite history – just a little coupon that says “I’m sorry!”
This short term expense will go a long way toward increasing your long term customer retention rate, so it’s actually good for your margin. Find the balance between an enticing deal and covering your own costs to find the appropriate coupon to offer.
Retailers can generally afford to be more generous with “sorry coupons” since they are used on a case-by-case basis, and aren’t offered or marketed publicly.
“91% of users say they’ll revisit a retailer after using a coupon.”
– vouchercloud

Clear ‘How to Return’ Instructions

 
Keep your returns flow simple by providing a clear ‘how to’ section that clears up any potential confusion. This creates a frictionless experience for customers and frees up your support team’s phones at the same time!
How/where to initiate the returns process.
All documents that need to be included with the return.
Packaging requirements.
Shipping address & details / instructions on how to generate their label.
“81% of shoppers want simple, easy, & free returns.”
– econsultancy

Using the Best Channels for Returns

 
The best retail experience is one that provides options, especially when it comes to returns. Equally promote in-store and mail back options during the returns process so the customer can choose accordingly.
Some customers don’t have time to make it to a brick & mortar location, but others don’t want to pay return shipping. Make them aware that you have suitable options for both scenarios!
“62% of shoppers are more likely to shop online if they can return an item in-store.”
– Invesp

Illustrated Returns

 
Many online retailers have taken to displaying their returns policy through simple, easy to understand illustrations.
While it may be hard to summarize all of the fine print this way, visually representing the basic principles of your process is a very effective way to drive the point home with your customers.
Those who wish to look further into the details can switch over to the written version of your policy at any time, since this is an add on and not a replacement.
“Visuals are processed 60,000x faster than text.”
– Visual Teaching Alliance

Optimize Reverse Logistics

 
Without the right returns management software, reverse logistics could mean a lot of work for your customer service department. Offer customers the same experience they initially got when they ordered the product. Tracking, proactive shipment updates, etc are all equally as important during the returns process!
Most importantly, customers want to know when you get the package and when they can expect their money back. Mitigate these anxieties through transparency and say goodbye to ‘when do I get my refund?’ phone calls.
“In some categories 20-30% of goods get returned.”
– NPR

Returns Instructions in the Box

 
You’ve developed a well thought out returns policy, produced clear documentation, and even have an illustrated guide on your website. Only one question remains; if you’ve made that information easily available to your customers.
Erase all doubt by including a copy of the returns instructions in the box. This saves time for the customer by eliminating the need to search for the details, creating a smooth effortless experience from the start.
“92% of consumers will buy something again if returns are easy.”
– Invesp
Chapter 3

Structure: Your Policy Behind the Scenes

Collecting Returns Data

 
Pre-printed labels are convenient for customers, but they are not the most efficient option for retailers. These labels result in a ton of boxes sitting in the corner of your warehouse for months – with no idea why they’ve been returned in the first place!
Switching over to a self service returns management software lets you gather crucial data with each return. Not only will this data help get goods back on the sales floor faster, it will point out repeating trends in the products being returned.
“Americans returned $260 billion in merchandise to retailers.”
– National Retail Federation

Analyzing Returns Data

 
Ask customers the right questions to discover any underlying trends in your ecommerce return statistics. Some examples include:
Damaged Products: Review your packaging techniques to ensure the items are capable of reaching their destination safely.
Wrong Size: Does your product page have a size chart to help customers find the best fit? Even so, review this section for accuracy.
Wrong Color: Review product photography on the website to ensure the images are flattering AND honest.
Does Not Match Description: Add fully detailed, accurate product descriptions to your product pages. Provide customers the ability to scan with bullet points highlighting key features.
Wrong Product/Size Shipped: Mistakes happen, but if you’re consistently shipping the wrong products to customers it’s time to review warehouse procedures.
“20% of consumers made a return because they received damaged products.”
– econsultancy

Empower Your Agents

 
There’s a lot on the line when a situation is escalated to the customer service team. The loyalty you worked so hard to earn can disappear after just one bad experience. Agents need to be equipped with confidence and a healthy attitude to productively handle issues.
Give agents instant access to all relevant information by utilizing a self-service returns solution and integrating with a platform like Zendesk. Empower them to make decisions and use their best judgement to foster a happy, productive work environment.
“66% of customers switch companies due to poor service.”
– Accenture

System Integration

 
Integrating order updates from your ERP back into your ecommerce store is complex. If your brand is currently having a hard time trying to make this work, we may have some good news. This integration can actually be skipped if the information can be pulled directly from an order management system (or WeSupply), and from there you can easily manage returns.
“79% of ERP implementation projects missed their promised deadlines.”
– Stichfix

Third Party Incentives

 
Third-party payment systems like PayPal are getting more integrated into the ecommerce world every year. Leverage some of their features, such as ‘Return Shipping on Us’ to help build customer trust during the consideration stage.
Knowing they won’t get stuck with an extra fee could be all the motivation needed to make a purchase with a brand the customer is unfamiliar with!
“PayPal offers ‘Return Shipping on Us’ to get refunded for up to $30 on 12 eligible purchases a year.”
– PayPal
 

Departmental Synergy

 
Offering an effortless experience to your customers begins with cross-departmental collaboration within your organization. Increase synergy and efficiency through better communication, especially between customer-facing teams.
There’s nothing more frustrating than getting two different answers for the same question, especially during the returns process when tensions are already high. Don’t let miscommunication between departments be the cause of customer disloyalty.
“65% of consumers are frustrated by cross-channel inconsistencies.”
– Accenture
 
Chapter 4

Re-Engagement: Driving Sales With Your Policy

In Store Returns

 
There are a large number of customers who prefer to return online purchases to a physical store. Some like this option because it’s faster, while some simply want to avoid paying return shipping costs.
Whatever the reason, leveraging your brick & mortar locations for returns is a distinct advantage over ecommerce-only brands. Turn their trip into a positive touchpoint in the customer relationship by delighting them with products, promos, and an effortless experience.
Be sure to offer equal representation for both in store and mail back returns so customers can easily pick the option that works best for them.
“38% of retailers reported an increase in BORIS returns in 2018.”
– National Retail Federation

Store Credit & Gift Card Refunds

 
Store credit refunds are a win-win situation for customers and brand owners. The customer doesn’t have to wait for money to hit their account, and the brand knows they’re not taking a loss on the original sale.
Giving customers instant access to funds has a psychological effect that leads to increased spending. It’s common to see customers spending more than the refund amount as soon as they get this “free” money.
Store credit refunds also allow you to create a more flexible policy especially when it comes to extending return windows. More brands are experimenting with different methods of incentivizing customers to choose store credit, such as offering a slightly higher amount than the cash value. Despite the slightly bigger margin hit, this offers the brand a chance to create a positive touchpoint, ending on a high note to maintain customer retention.
“The bottom line is that store credit offers you flexibility and an added tool to help inspire customer spending and loyalty.”
– Shopify

Earning Retention Through an Effortless Experience

 
By providing an effortless experience for customers making a return you can turn the interaction into a positive, loyalty building touchpoint. Be proactive in giving your customers the tools to handle easy issues on their own so they don’t need to waste their time on the phone with agents.
Keep the returns flow intuitive and empower them to be self-sufficient throughout. By showing the customer that the returns process can be quick and easy you build retention by mitigating any future fears of post-purchase dissonance.
“96% of customers reporting high-effort experiences do not become repeat purchasers, compared with only 9% of those with low-effort experiences.”
– BigCommerce
 

Upsell on Exchanges

 
It says a lot when a customer chooses to make an exchange over a return. Small adjustments aside, they still want the product. Deliver a great customer experience to build loyalty and turn exchanges into more sales. Use the exchange touchpoint to show customers products that work great with, or enhance, what they’ve already purchased!
No matter the method of exchange, there’s an easy way to upsell:
Mail Back Exchanges: Use a branded, custom tracking page to highlight related products or big promotions to your customers.
In Store Exchanges: Getting customers to your brick & mortar location is a goldmine of potential. Delight them with a great experience and have your staff showcase products they’re sure to love.
“18% of the customers prefer exchanges as a refund method.”
– Shopify
 
Chapter 5

Customer Behavior: The Right Policy for the Right Audience

Making Returns Easier for Gift Recipients

 
Make life easier for gift-givers during the holiday season by adjusting your returns policy. Give the recipient the ability to look up their order and make a return without the original purchaser’s account. Being able to look up past purchases avoids issues of missing gift receipts or packing slips.
Not only will this increase the chance of purchase at the beginning, but provides a chance to turn the gift recipient into a loyal customer through this positive rma process.
“40% of surveyed gift recipients returned at least one item in 2017.”
– Small Business Trends

Easy Returns: Receipt or No Receipt

 
In the past, a customer knew that if they lost the receipt it meant they were stuck with an item forever. Fortunately, those days are long gone (even if some brands refuse to admit it).
Offer customers the option to look up their order detail page by entering the email address used to purchase. Here they can access all previous transactions associated with that email, as well as initiate the returns process and generate their own label after your approval.
“58% of customers say they want a hassle-free return policy.”
– Ivesp

Returns Compliance

 
Returns management is complex, especially for ecommerce platforms carrying lots of different products. Establish ground rules with a layered, flexible policy that minimizes room for interpretation by your customers and team.
Empower agents to make decisions while helping customers on a case by case basis, but give them a bulletproof policy to fall back on. This ensures true returns compliance, with the right rules being applied to the right products at all times.
“About 6.5% or $22.6 billion of returns were labeled fraud or abuse of store return policies. That includes falsifying receipts to profit or buying something with the intention of wearing it once before returning it.”
– BigCommerce

Fitting Roomer Customers

 
Fitting Roomer customers sit on the fine line between honest and fraudulent returns. They are looking to recreate the in-store experience of trying on multiple versions of the same product to pick the best one. Typically these shoppers order an item in various sizes and colors in order to nail the look they’re going for.
This is a challenge to your returns management process, but there are several product page optimizations that can help reduce the volume. Focus on clear imagery, detailed product descriptions, and an accurate sizing chart, to give customers a better idea of what to expect. Consider adding an FAQ or review section to the product page to further reduce size selection anxieties.
“19% of surveyed shoppers admit to ordering multiple versions of the same item so they can make their mind up once they’re delivered.”
– Barclaycard

Wardrobing Customers

 
10% of Wardrobing customers admit to being motivated by their reputation on social media, saying they take photos for Facebook and Instagram before returning the item. Whether these customers are looking for social media points or a night out on the town in a new dress, the “try before you buy” phenomenon presents a big uptick to the fashion ecommerce return rate.
Alpha High Theft Solutions has introduced a device called the Shark Tag to help fight back. This anti-tampering tag is placed on an article of clothing in an obvious place. The customer would need to remove this tag if they wanted to wear the item out, which would signify to the retailer that the return could be voided. The fairness of your policy is not compromised because shoppers can still try items on at home and return as usual.
“40% of retailers have seen wardrobing increase, and 44% agreed that their margins are being strongly impacted.”
– BrightPearl

Effortless Customer Experience that drives sales and improves customer loyalty.

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