How a Return Policy Can Give You a Leg Up on the Competition

women examining clothing
Companies want to be known for their products, namely the great style, quality, and value they provide. But even exceptional items are sometimes the wrong size, wrong color, or wrong something, and they need to go back.

That’s where the return policy comes in, and the ease and convenience of returning items can strongly influence whether a customer shops with you again or moves on to a competitor.

A study on return policies by the University of Texas-Dallas found that policies that provide more time for returns and refund a larger percentage of the original cost are the most effective in increasing overall sales.

In fact, there are a few companies who have become as well known for their excellent products as they have for the generous, flexible, and seamless process of returning items.

Here are some tips for creating a fair return policy that satisfies your customers and keeps them coming back.

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Write a return policy that is easy to understand.

When customers read your policy, there should be no question in their mind as to what can and cannot be sent back. Be clear about the types of items that are accepted, the condition they must be in, and what (if any) time frame they must be returned within. You should also be clear about whether you offer money-back refunds or store credit.

Zappos, for example, is known for its fast and free shipping and returns, and the company clearly outlines its three-step return process on its website. On your website and in your stores, make the return policy prominent and keep the language simple and concise. Consider adding graphics to further illustrate the ease of sending back products.

Offer a generous return window.

Part of the appeal of buying online is the convenience of the process, so don’t turn that experience into a headache by giving customers a tight deadline for sending back unwanted items. The same goes for brick-and-mortar stores — it might be difficult for shoppers to make a trip back quickly.

Keep in mind the fact that sometimes consumers need time to think about a purchase before deciding whether they want to keep it or return it. At Costco, customers have 90 days to return electronics. Zappos gives customers 365 days to send back items, while Nordstrom doesn’t have any deadline for returns.

Of course, it’s not always realistic for small businesses to offer an unlimited amount of time to return items, but be as flexible as you can, and check your competitors’ return policies to offer a more appealing time frame.

Include a return label in packages.

Make returning items even easier for your customers by shipping orders with an adhesive return label and clear instructions as to how they should send back items. If you have brick-and-mortar locations, offer customers the option of returning the items to the store instead of shipping them for a full omnichannel shopping experience.

Allow for in-store returns.

It’s nice to include a return label when you are fulfilling e-commerce orders, but some customers don’t want to deal with shipping returns. So try offering the ability to return e-commerce orders in your physical store. This is a standard offering for many major retailers — like Kohl’s, Gap, Nordstrom, etc. — and provides an extra layer of convenience for your customers.

Get customer feedback.

The best way to find out how customers feel about your return policy? Ask them. After customers complete a return, send them a short survey to find out what they did and did not like about the process and what you could have done better. Take their comments to heart and use them to inform policy changes.

For example, Target recently extended its return window to a year for some items, in part to keep up with the more generous policies of its competitors.

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