This article was originally published on Sept. 29, 2018, and was updated on April 1, 2020.
In the world of ecommerce, we know this much is true: If you sell online, you’ll eventually encounter a customer seeking returns and refunds for items purchased at your store. But don’t panic, take it personally, or assume shoppers are unhappy with your product or service. Returns also occur when a delivered item is damaged, clothing doesn’t fit, or the item that arrived is not what customers thought they were buying.
No matter the reason, your policy and strategy for handling returns and refunds will impact customers’ shopping experiences, shape their level of satisfaction, and influence the likelihood of them becoming return shoppers.
Once you have such a policy in place, extenuating circumstances might necessitate a Returns Contingency Plan (noted as RCP below) to accommodate unpredictable — perhaps even previously unimaginable — scenarios.
When might a contingency plan be put into action? Naturally, the current COVID-19 situation is on everyone’s mind, but once that is behind us, there may be other such situations. Consider natural disasters (e.g., earthquake, hurricane), or perhaps the situation that occurred in my Northern California hometown last fall, where the utility company was forced to shut off power for days at a time in hopes of preventing fires.
Having a plan positions you to take immediate action, allowing you to help customers sooner, and more appropriately.
Why have a policy for returns and refunds?
There are quite a few reasons you’d want rules in place for returns and refunds. These are some of the biggest ones among ecommerce merchants:
- You want to inspire shopper confidence in your business, products and services.
- You need to demonstrate your commitment to customer satisfaction — immediately implementing your RCP demonstrates that commitment at a time when customers are already experiencing heightened concern and stress.
- You have an obligation to inform customers about their rights as part of the purchasing process at your business.
What is included in a policy for returns and refunds?
A quick search will return several quality results for a return policy template. Keep these basics for inclusion in mind when you craft your own policy:
- What form refunds take
- The eligibility time frame for a return or refund
- Any limitations on returned items
- Additional costs associated with returns
While not articulated publicly in your policy (online or in print) during normal times in the business world, you’ll want your RCP at the ready, so you can put it into practice on a moment’s notice.
Who will update the website, and when? Will you send an email message to all customers? And when you are ready to unveil it to customers, you’ll want clear language on your website as to what is precipitating the change.
25 tips for implementing a policy for returns and refunds
Follow these tips to implement a returns and refunds policy that will work for both your business and your customers.
1.Avoid complicated legalese. Readers should be able to understand it without consulting a lawyer or dictionary.
2. Steer clear of demanding language implying a burden on the customer. Avoid terms such as “under any circumstances,” “under no circumstances,” “you are required,” or “we are not responsible for.”
3. State an effectivity date for returns and refunds. If you update your policy, plan ahead for a transitional grace period, and be prepared to honor the policy that was in effect at the time of purchase.
This is a key point to include in your RCP.
Allowing a longer time period for returns makes sense when mail service and shipping carriers experience delays — not to mention customers’ inability to get to a mailing location quickly and safely.
4. Maintain your brand voice. Whether casual and conversational, or formal and precise, make the policy consistent with your overall messaging style.
Other website considerations
5. Make your policy for returns and refunds easily accessible: Don’t hide it where it can’t be readily found.
6. Minimize the potential for returns and refunds resulting from the product not being what customers saw on your site. Accurate product descriptions with photos can minimize accidentally purchasing the wrong item.
7. Share your flexible and accommodating policy on the home page, product pages, shopping cart and checkout pages. Your flexibility could influence shoppers still on the fence. And under extenuating circumstances, the flexibility resulting from your RCP likely becomes a key influencing factor.
8. Even in a clear, concise and well-written policy for returns and refunds, include customer service contact information for additional questions. If the situation activating your RCP affects your contact methods or hours, post that prominently on your website. For example, phone hours may be reduced, or customers may be asked to use chat capabilities instead of phone calls.
9. Make sure all staff members processing returns and refunds or interacting with customers are up to speed on your policies.
10. Enable customers to arrange their own returns and refunds or exchanges. Help them do it online and minimize their need to contact customer service.
11. Email customers when their returns and refunds have been processed.
12. If the return is prompted by your mistake (such as shipping something other than what was ordered, or it arrived broken due to your poor packaging), immediately take full responsibility and offer resolution without hesitation or argument.
13. Specify refund eligibility timeframes with typically-used round numbers such as 30, 60 or 90 days. Make the timeframe reasonable and long enough for the customer to actually receive, open and try out the product.
When extenuating circumstances hit, major retailers are often quick to extend those timeframes, and your RCP should follow their lead.
14. Specify whether the return eligibility clock starts ticking on the date of purchase, shipping or receipt of the item.
15. Limited return time frames can discourage shoppers from planning ahead for holiday shopping, knowing that the item might not be gifted for a few weeks. Consider extending the holiday season return timeframe to mid-January.
16. Specify how refunds and refunds are compensated. Do they receive a store credit or credit on the purchasing credit card? A replacement item? Is a restocking charge or processing fee subtracted from the refund amount
During times of crisis, customers may also be financially impacted. If you’re in a position to waive these fees during the period your RCP is enabled, thankful customers will remember that small, kind gesture.
17. Specify the time frame in which a credit or refund will be applied. Store credit can usually be available quickly. However, credit card issuers have their own policies affecting how quickly refunded money will be available.
If the situation demands RCP activation, smaller businesses may quickly experience cash flow concerns, and will need to extend the time period in which the refund may be applied. Another option may be to encourage customers to take a store credit instead of a refund by offering a small incentive, such as a coupon for a future purchase.
18. Notify customers if they must include a receipt or proof of purchase.
19. Specify if authorization is needed prior to an item’s return. If authorization involves interaction with staff — who may be overloaded, working limited hours, or temporarily on furlough, depending on the situation — be prepared to communicate
changes to this process.
20. Include details about the expected state of the returned item. Does it need to be in its original packaging? What about the original condition (e.g., unworn, unwashed, with tags attached)?
21. Stipulate if sale items are eligible for return.
22. Indicate whether digital products are eligible for refund under limited circumstances, such as when a download link isn’t working.
The physical return process
23. Don’t sneak in unanticipated return costs. Articulate clearly if customers must pay for return shipping.
24. Make it easy for customers to find return shipping labels. Consider including them with shipped items, or offer the ability to print their own labels.
25. Specify if an online purchase is eligible for return at your retail outlet.
Under adverse conditions that put your RCP in place, your retail outlet may be closed to the public. In that case, you’ll need to clearly advertise that you’re unable to process in-person returns. If customers have no option but to return in person, make sure to extend the deadline to after your retail outlet is back in business.
Return policy templates
Several excellent online resources can help you create a policy that works for you.
TermsFeed is a provider of trusted legal agreements for a number of business scenarios. They offer both a template and policy generator, allowing you to create a custom policy using their template. In addition, they offer both free and paid accounts, where premium (paid) accounts include additional clauses that can better protect your business interests.
Termly also provides a free template and generator for a comprehensive policy. The generator runs through a number of questions to gather specific details, and you’ll need to create an account to receive the final product.
ReturnRefundPolicyTemplate.com provides a generator, as well as a number of examples in different formats, including word counts. The final document is downloadable as HTML or text.
Template.net provides different templates in a variety of formats, downloadable as PDF or Word files.
Rolling out your RCP
When it’s time to put your Returns Contingency Plan in place, be sure to use clear language on your website. Consider these examples:
- We recognize these are challenging times for everyone, and we are committed to the health and safety of both our customers and employees. Thank you for your patience as we navigate new and uncharted waters.
- Our stores and online businesses are temporarily closed in order to help prevent further spread of the COVID-19 virus.
- In support of our national effort to stop the spread of COVID-19, our retail locations are temporarily closed. If you need to return an online purchase, please use our mail-in process.
- Due to the disruption caused by [COVID-19, the recent earthquake, extended power outages, etc.], we will extend our returns policy from 60 days to 90 days from purchase date, to allow flexibility for our customers choosing to return products.
- We will process returns once it is safe to reopen our store. At that time, we will extend our returns policy to 30 days after the re-open date, regardless of your original purchase date.
Make sure your comprehensive, accommodating, readily found and easily understood policy for returns and refunds addresses the following:
- Refund formats and options.
- Limitations related to the item, its purchase and the return time frame.
- Shopper responsibilities, including possible costs.
There’s no need to publish your RCP in advance. However, having it defined and reviewed before it’s needed lets you update your website immediately when extenuating or extreme circumstances hit.
This allows you to quickly allay customer concerns and better serve your faithful audience, while emphasizing your ability to understand the need for flexibility, and willingness to make the best of whatever situation intrudes on normal business operations.
While you hope never to see returns and refunds, having your policy and strategy ready from the get-go will facilitate a painless process that keeps loyal customers coming back to shop another day.