With the increasing popularity of online shopping, competition amongst E-commerce businesses has become more intense, as customers have endless options to choose from. While offering unique products is important for gaining customers, a clear and customer-friendly E-commerce return policy plays an equally crucial role.
According to reports, customers are three times more likely to NEVER purchase from a company, if they are unsatisfied with the return policy. Therefore, drafting a well-crafted return policy becomes even more important to improve customer satisfaction, boost sales, and establish trust.
However, creating a best-in-class E-commerce return policy can be a challenging task that requires careful consideration of various factors such as product types, logistics, and budget.
In this blog, we’ll explore the key elements of a successful E-commerce return policy and discuss about tips for creating a policy that meets both the customer’s and the business’s needs.
But before delving into those details, let’s first understand the meaning and importance of an E-commerce return policy.
What Is An E-commerce Return Policy?
An E-commerce return policy is a document that outlines the process and requirements for accepting returns from customers. This policy serves two important purposes:
Firstly, from a business perspective, it helps to protect against inappropriate returns and financial loss caused by credit card chargebacks.
Secondly, from a customer perspective, it provides information on the merchandise that can be returned, the reason for return, the time frame for returns, and the process for initiating a return. By understanding these details, customers can make informed purchase decisions and have confidence in the reliability of the business.
Here is an example of a return policy from Flipkart.
This comprehensive return policy provides customers with information about the return process, including the timeframe for returns and processing times. Additionally, it goes a step further by outlining common scenarios that may occur, helping customers understand whether a product is eligible for return or not.
Why Is An E-commerce Return Policy Important?
Are you wondering why you need an E-commerce return policy? Here are some points that will convince you.
Instills a feeling of security
In the world of online shopping, customers seek security in their purchases. They expect E-commerce businesses to offer a certain return timeframe, which not only indicates confidence in the product but also provides a safety net in case of any issues. This helps customers feel secure in their purchasing decisions and enhances their overall shopping experience.
A well-crafted E-commerce return policy can save you the hassle of communicating return expectations to each customer individually. Customers know exactly what to expect and can initiate the process easily when the policy has clearly outlined the items eligible for returns and the corresponding timeframe. This not only improves customer satisfaction but also saves time, as you don’t have to answer repetitive return queries from customers.
Grows retention rates
Research shows that 92% of customers buy again from the same E-commerce company if the return process is hassle-free. You can create a positive shopping experience for customers, and encourage them to return to their store in the future by making the return process easy. This not only promotes customer loyalty but also helps increase your revenue by driving repeat sales.
Unlike in-store customers who can physically touch and examine products, online customers rely solely on product descriptions and images. It may not provide a comprehensive understanding of the product’s features and quality. As a result, customers may be dissatisfied with their purchase once it arrives at their doorstep. However, a well-crafted return policy that offers customers the option to return or exchange the product can help you with repeat sales and long-term customer relationships.
A well-crafted E-commerce return policy can help your business meet customer expectations and facilitate the purchasing decision process.
You can remove the hassle associated with product returns by providing clear guidelines for returns and exchanges—establishing your business as a customer-centric organization.
An E-commerce return policy can ultimately help businesses stand out in the competitive market and attract and retain customers in the long term.
Now, let’s get down to writing a great E-commerce return policy.
What To Include In Your Return And Refund Policy
To ensure customers understand the boundaries surrounding returns, an elaborate E-commerce return policy must cover specific key points. These include the types of returns that will be accepted by the business and the refund process that will be followed. By clearly communicating these details, businesses can minimize confusion and dissatisfaction among customers, and establish a clear protocol for handling returns.
Here are a few points that should be included in your E-commerce return and refund policy:
Identify the items eligible for return
It is essential to identify which products are eligible for returns and which are not, especially if you sell perishable goods that may not be suitable for resale once they are returned.
It is important to clearly state the types of items that are eligible for return or exchange in your E-commerce return policy to avoid confusion and manage customer expectations. By doing so, you can ensure that customers know exactly what they can and cannot return, which can reduce frustration and improve customer satisfaction.
Determine a clear timeframe for accepting returns
It’s crucial to define a specific time frame for returns in your E-commerce return policy, as customers need to know how long they have to initiate a return. The duration can vary widely, ranging from a week to a year or even longer, depending on the business’s policies. However, the standard timeframe for many businesses is 30 days, which is also the expectation of most customers.
If you fail to disclose a timeframe, you can have customers requesting returns even after years of the purchase. Yes, we are not joking. To avoid this scenario, it’s important to have clear and stricter rules in place to protect your business against open-ended return periods.
Describe the acceptable condition of the returned products to be accepted
It is crucial for an E-commerce return policy to clearly outline the condition in which a product must be returned for it to be processed. This includes detailing requirements such as original packaging, attached tags, and unworn clothing. It is equally important to state that returns that do not meet these requirements will not be accepted.
Failing to specify acceptable return conditions in your policy may result in customers returning products in poor condition, making it impossible for you to resell them and causing financial loss to your business. Therefore, a clear and concise outline of acceptable return conditions in your E-commerce return policy is essential.
Choose in-store credit or a refund
When customers initiate a return, they want to know how they will receive compensation for their purchase. Typically, there are two options for an E-commerce refund policy: in-store credit or a full refund. While some customers may prefer in-store credit, others will demand a full refund. Ultimately, the decision on what type of compensation to offer falls on the business. But it needs to be mentioned clearly in your E-commerce return policy.
We recommend offering a full refund if the returned item meets all the requirements. Some E-commerce companies give customers the choice between two options. However, if you choose to only offer an in-store credit, it can be used to enhance your return process if done strategically. But be aware that this approach may lead to dissatisfaction among some customers.
Disclose any fees associated with returns
Your E-commerce return policy should specify who is responsible for the shipping, restocking, and other fees associated with returning a product. It is important to be transparent about this information to avoid any confusion or frustration on the part of the customer.
If you expect the customer to bear these costs, make sure to clearly state this in your return policy. Customers can become disgruntled if they are not aware of these fees ahead of time, so it is important to be upfront about them.
E-commerce Return Policy Template
You’re now equipped with all the necessary information and guidelines needed to create an effective E-commerce return policy. However, it can still be challenging to write a policy from scratch. Here’s a free E-commerce return policy template that you can use. This policy template is designed to cover all the essential elements needed to be included in an E-commerce return policy.
Just simply replace the text with your policy or use it as a guideline to create a policy from scratch tailored to your business needs.
We hope that this E-commerce return policy example not only helps you create an effective policy in a short span of time but also sets you apart from your competitors. Remember, a clear and customer-friendly policy goes a long way in building trust with your customers, eventually increasing sales and revenue for your business.
E-commerce Returns: Best Practices To Follow
You followed all the tips and tricks mentioned above and created a customer-friendly E-commerce return policy, but your return workload is still high. Now what do you do?
Here are some best practices you can follow in your E-commerce returns to ensure a hassle-free process.
- Your E-commerce returns policy should be easy to find
The importance of making your E-commerce return policy visible to customers cannot be overstated. It is crucial for the success of your return process.
To achieve this, ensure that your return policy is prominently featured on the homepage of your website. The footer section is a popular spot for this. You can also consider including it in other areas such as the checkout page, FAQ pages, and product pages.
Another effective way to make your E-commerce return policy visible is by printing a copy and including it with every shipped product. Additionally, you can attach it or send a link in order confirmation emails sent to your customers after a purchase is made.
- Create concise steps for the buyer to follow
To prevent confusion among your customers, the policy should provide clear and concise instructions on the return process. You can create a dedicated section on your website or app for the return process, or you can direct customers to contact your helpline number for assistance.
Regardless of the method chosen, the guide should include all steps involved in returning the product, such as how to pack, label, and ship the items back to your store.
- Make return labels easy to print
Making return labels easy to print is an important aspect of a customer-friendly E-commerce return policy. Customers should be able to easily access and print their return labels without any technical difficulties.
Providing a clear and simple set of instructions on how to print the labels can save customers’ time and frustration, and can also streamline the return process for businesses. Additionally, including the return label in the original packaging or sending it via email can make it even easier for customers to print and use.
- Understand the laws governing returns
The laws that govern returns can vary from one country to the other.
In India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods.
But in the United States, there is no legal requirement for a return policy. However, some states in the country require you to disclose it in the checkout process.
On the other hand, there are other countries that legally require E-commerce companies to refund, repair or exchange faulty products. Customers in the European Union have the right to return the product within 14 days and receive a full refund.
Therefore, you need to identify the regulations that work in your country of operation and comply with them.
- Use chatbots to handle your returns
Integrating chatbots into your E-commerce return process can greatly enhance its efficiency. Simply add them to your website and they will make your process seamless.
With chatbots readily available on your website, customers can easily provide return details and receive guidance throughout the process. This not only ensures customer satisfaction but also saves you time and effort in handling each return individually.
- Keep your return policy simple
Ensure your E-commerce return policy is crafted using clear and concise language, which states rules that are easy to understand for each and every customer. Do not leave your return conditions open to interpretation.
Put every detail down correctly and make sure your customers can understand the rules and process of your returns. You can also seek feedback from other people before publishing your return policy online for your customers.
Where Can You Display Your Return Policy?
After crafting a well-defined E-commerce return and exchange policy, the next crucial step is to ensure that your customers can easily access and view the policy before making a purchase.
Displaying your policy prominently can set expectations and minimize the number of dissatisfied customers. While it’s impossible to please everyone, making your policy visible can go a long way in reducing the number of returns and exchanges.
To make your policy easily accessible, include links to it in the following places:
- Your website footer
- Your FAQ page under the returns section
- Your product pages
- Cart and checkout pages
- Order confirmation email
- Your wish list pages
Ensure that customers are aware of your return and exchange policy before they purchase by placing links to your policy in these key locations.
Are Return And Refund Policies Legally Required?
The legality of an E-commerce return and refund policy can vary based on the country in which your business operates.
According to the Consumer Protection Act of 2019 in India, E-commerce companies are obligated to inform their customers about their refund and return policies once they have made a purchase. They are also legally required to accept returns of faulty or incorrectly advertised goods. Customers are entitled to return semi-durable and durable products within 15 days of purchase, provided they are in their original packaging and have not undergone any changes in shape or size.
In the United States, there is no legal requirement for an E-commerce return policy, but it is important to clearly state on your website whether or not you have one. Some states may also require you to disclose this information during the checkout process.
In the European Union, sellers are required to offer repair, replacement, or refund options for faulty products. In the United Kingdom, traders must offer a full refund for faulty, damaged, or misrepresented products. And in Australia, customers have the right to repair, refund, or replace products under the Australian Consumer Law.
Therefore, it is important to research the legal requirements for an E-commerce return policy in your country of operation and comply with all applicable regulations.
Whether you’re starting a new online store or looking to improve an existing E-commerce return policy, the above guide will help you create a policy that sets your business apart from the competition.
ANS Commerce is here to help with the digital process. As a full-stack E-commerce enabler, we offer top-notch solutions and services to online businesses. Our team of experienced professionals can assist you from start to finish, helping you achieve your goals and boost your sales and revenue. Whether you’re launching a new online store or seeking to enhance your existing E-commerce business, ANS Commerce has the expertise and resources to help you succeed in the digital marketplace.
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