✨ Post actualizado el 16/11/2023 por David Costarrosa
In the world of ecommerce, there is one undeniable truth.
No matter how good your item is.
No matter how hard you work.
No matter how much money you make per month.
If you don’t have a clear and transparent returns policy, your brand’s road to success will be a short one.
Did you know that according to an article published in the New York Times, 91% of consumers say they read a store’s returns policy before making a purchase and that it is one of the most important factors in their decision?
That’s why having a clear and friendly policy can become a fundamental ally for business success.
The key is simple: No secrets. No deception.
What’s more, FreePrivacyPolicy.com confirms that good communication of your returns policy is essential to “…encourage consumers to buy from you and trust your brand…”.
That’s why in this article we go through, point by point, why you should have a clear returns policy that convinces your customer to trust your store more than they trust their doctor.
Components of a well-designed ecommerce returns policy
Buying online is different. Consumers have no contact with the item. They generally just watch a video that explains briefly, and in no more than 15 seconds, how great it would be to incorporate that product into their daily lives.
That, of course, is a substantial difference from buying any item in a drugstore, shopping mall or supermarket.
Based on the principles and actions of this Law, below you will find a table with the components of a well-designed ecommerce returns policy.
|Deadline for returns and exchanges
|According to the Law: "From the moment the product arrives at your home you have 14 calendar days to return it free of charge. You don't have to give any explanation: you simply exercise your right of withdrawal".
With a fundamental addition: If the online store does not correctly inform in its returns policy that you have 14 days to return without any obligation to give an explanation, the law punishes them and the deadline is extended to 12 months.
|Eligibility criteria for returns
|Although this criterion depends on each particular store, the Law establishes some exceptions in which you are not obliged to return the money:
- Music, video, software, video games (when the seal is removed).
- Newspapers and magazines.
- Customized products.
- Food and other products with a short shelf life.
- Online digital content, if you have already started downloading or streaming, and if you have accepted that you lose your right of withdrawal.
- Products purchased from individuals and not from companies or vendors.
|Process and steps for returns
|The most important thing about the process, regardless of the one you have chosen for your policies, is that it is simple and does not overly detract from the customer experience.
We recommend including a guide that has contact information alongside the typical RMA form, which we've also discussed here.
|Refund processing methods and times
|While we touched on this point in our article on “How to handle reverse logistics in ecommerce”, it is important to clarify that both the refund processing method and the refund processing time should be well detailed in the returns policy.
You must keep in mind that according to the Law of Returns in Internet Shopping, you have 14 days to refund the customer.
|Handling shipping costs for returns
|While there is no general rule about this since each returned product is a unique case, you can again rely on the Law on returns.
It states that although you must refund the full amount of the purchase within 14 calendar days, you can ask the customer to cover the cost of shipping the product from their home to the store's warehouse.
In other words, the customer is the one who bears the cost of returning the product.
|Restocking fees and exceptions to the policy
|It is important to clarify in the returns policy in which cases an additional charge will be applied (such as the one explained above regarding the cost of returning the product) and in which situations an exception to the policy may be applied (e.g., damaged, tampered with or returned in poor condition).
Effective communication of the policy
One of the fundamental aspects of an effective returns policy is how it is communicated to the customer.
For this reason, let’s look at the store of a leading brand like Adidas as a reference point.
Location and visibility in the online store
As soon as you access the store, Adidas provides a section in the top center labeled “Returns and Exchanges” as well as in the top right corner labeled “Orders and Returns”.
By hitting the central “Returns and Exchanges” option, you will have access to all the information you need to return a product or make exchanges.
Among them, it is worth mentioning the option to “Exchange or return the items in your order for free within 30 days”.
Regarding the section on the right “Orders and returns”, by clicking here you can enter your email address and start the return process of an item you have purchased in the store.
Finally, at the bottom of the store’s Home page, you can view the policies themselves by clicking on “Returns and refunds”.
Use clear and understandable language
When writing the returns policy, it is important to generate a sense of trust in the customer.
Therefore, the message should be clear and understandable. It is advisable to avoid legal terminology that may scare the buyer away or discourage them from purchasing a product.
To exemplify this, we will continue to use the Adidas store as a reference.
In addition to having a guide on how to return a product, its returns policy section is short, clear and specific.
Integration with the customer experience
To increase brand credibility, it is important that the returns policy is displayed where the customer can see it as they purchase a product.
In this case, here is an example of an Adidas shopping cart.
Format for an effective returns policy
Following the example of the Adidas store, here are the most important points for the format of your returns policy to be effective.
- Separate each section of the policy: The clearer the message, the better.
- Use bullet points: Short, informative sentences that allow the customer to comfortably read the policy.
- Include buttons: Use them to offer the customer the possibility of contact, comment or even to start the process of returning a product.
- Use bold letters: Highlight the most important phrases of your returns policy in bold. Although the customer can easily read them, they will pay more attention to the ones that stand out in the text.
- FAQ section: Include an FAQ section at the end of the text that summarizes your policy and offers solutions.
Monitoring and continuous improvement of the policy
Execute. Measure. Improve.
Those are the 3 words you will have to keep in mind to maintain a returns policy in line with the growth of your ecommerce business.
Data analysis and return metrics
As confirmed by Converted.in, up to 30% of the products purchased online are returned by the customer.
Bearing that number in mind, it is interesting that you can measure the main factors that lead customers to return their products.
Among the most common causes, we can mention:
- Damaged product
- Defective product
- Product different from the one shown in the store
- Incorrect product
- Incorrect product size
For example, if most of the returns are for a damaged product, you should check the packaging of the item.
If you have a large number of returns because the product is defective, then the right thing to do would be to stop selling the product or change the supplier.
If, on the other hand, the customer considers it to be different from the one shown, the best course of action would be to change the photo in the store.
In case the highest percentage originates from the incorrect product being received, you will have to tighten the screws on your shipping staff.
And as for the sizing issue, perhaps the best thing to do would be to review the sizing chart.
Evaluating customer satisfaction
Conducting a customer survey after they return a product will help identify pain points and courses of action for improving the returns policy to increase the level of confidence in the brand.
Regular adjustments and updates
Based on all the metrics obtained with the different actions, the best thing to do will be to periodically review the returns policy in order to keep the customer informed about all the updates in the store.
Moreover, updating the returns policy can be the perfect excuse to send out a marketing campaign to all the store’s subscribers.
Likewise, the evolution of the store’s market niche or even a new specific law concerning the return of products may be another reason why you should periodically adjust the section of the website.
Software to analyze returns
At the beginning of this section we mentioned “Execute. Measure. Improve.”.
Therefore here are 3 software options for you to automate this process.
ClickPost Returns Management Software
Based on AI, ClickPost offers not only solutions from the reverse logistics point of view, but also a range of alternatives to improve the whole process.
Its NPR (Non-Pickup Report) system analyzes the reasons why packages have not been delivered in order to reduce the RTO (Return-to-Origin) rate.
In addition, depending on your returns policies, the system will automatically detect whether the product can be returned or not.
This software integrates with several transportation companies to manage all returns directly online.
Loop Returns offers among its main features the ability to create a customized portal for returns to be managed quickly and easily.
It offers the creation of automatic return labels linked directly to the shipping companies.
Happy Returns features among its most significant innovations the possibility for the customer to return the item in several locations.
First, through the brand’s website.
Second, they can opt for a “Happy Returns Return Bar”. That is, one of the company’s return points.
Third, you can do it from the retailer’s store.
Each return will be tracked and analyzed by the software. This approach makes it one of the most powerful product returns tools available on the market.
Case Studies: Successful Returns Policies
If there is one thing that has set the American giant apart, it is its returns policy.
The customer has a special section within their purchase order to manage the return of their product in a quick, easy and very intuitive way.
This strategy has led Amazon to become a true benchmark, which many ecommerce companies have had to copy or imitate in order not to lose ground in the business.
According to Amazon Spain’s policies, a customer may cancel their order within 14 days and arrange for a return up to 30 days from the time of delivery of the product.
The only stipulation is that you can only return “new, unused items in good condition”.
Amazon provides both the client and the buyer with a series of additions to help make the return process as seamless as possible.
- Delivery points of the product to be returned.
- Online tracking 24 hours a day.
- Door-to-door courier service.
- Customer service center with 24-hour support.
The change in Amazon's returns policy
During recent times, Amazon has implemented a series of changes in its returns policy to reduce the costs of having items returned by buyers and all logistical costs borne by the company by 35%.
Among its implemented strategies, we can highlight:
- “Frequently returned” label: This is a label to identify an item that has been returned by several buyers in order to identify it and act on it, either by suspending the listing or contacting the manufacturer or seller.
- Charging special fees: Amazon USA has begun charging an extra $1 for items returned via UPS when there is a Whole Foods, Amazon Fresh or Kohl’s store close to the delivery address.
Another of the landmark cases when it comes to successful returns policies is that of the shoe company Zappos.
Tony Hsieh was an American entrepreneur who retired as CEO of Zappos in 2020. He was the head of the great explosion of the brand to transform it into the largest online shoe store in the world.
As he assured in his book Delivering Happiness:
“If we were serious about building our brand around being the best in customer service, customer service had to be the whole company, not just a single department.”
One of his personal achievements was the implementation of the “365-Day Return Policy”.
Zappos allows its customers to return purchased products at any time within 365 days of purchase, no questions asked.
This itself is specified in one of the sections of their product returns policy along with a step-by-step guide on how to do so quickly and easily.
As Hsieh himself describes in his book, “Our whole belief is that if you get the culture right, most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own.”
The foundation of their returns policy is underpinned by their own brand values:
- Establishing a clear, shared vision that all employees understood and were committed to.
- Open communication between leaders and employees in order to provide the best possible customer service.
- Encouraging creativity and innovation to solve every problem independently.
- Giving employees the freedom and resources to make decisions and act in the customer’s best interest.
- Establishing strong relationships with customers with the objective of involving them in the brand’s values.
How can Beeping help in the ecommerce returns process?
Beeping is a fulfillment company specialized in ecommerce.
We work with entrepreneurs, small and medium companies managing all their own stock as well as the shipment of goods to Amazon’s warehouses.
From our side, we provide all our technology, software and qualified personnel to offer the best possible experience in terms of reverse logistics of a product.
We know that it is a cumbersome process for the customer and that is why we have approached it in the most comfortable and secure way.
If you work with us, in just 5 steps you will have the whole process ready for your customer to return the product.
Set up your returns policy
The first step is to configure the returns policy of your ecommerce business, taking into account everything we have outlined in this article.
This point is very important, otherwise you will have to accept all the returns that are requested.
The customer requests a return
From the returns policy, the customer can request a return from your online store or by contacting your customer service team.
You will have to send them a form requesting the following information:
- Customer name and surname.
- Order number.
- Telephone number.
- Reason for returning the order, adding the options provided in the returns policy.
- Account number if a refund is requested.
It is important that the name of the store is clearly visible on the form, so that when we receive the product in our warehouses we know who it belongs to.
Advise the customer about the next step
Once the customer has filled in the form, you must inform them that they need to send the product to our warehouses.
To do this, give them the address of Beeping’s warehouses and the correct way to send the product, which is by registered mail.
Reception of the product
When we receive the product in our warehouses we will check the condition of the product. It is important that the customer indicates in the form the reason for the return, because if at first sight there is no damage we will give the product the all clear and return it to your stock.
If, on the other hand, the product looks damaged, we will notify you and upload a photo of the form and the damage to the order to the Airtable platform.
However, if everything seems OK, we will upload only a photo of the form or, failing that, of the product label, and we will add it back to your stock.
Finally, the next steps depend on your returns policy. If you have established that there are cash refunds, you must send the customer the total amount of their purchase through the account number indicated on the form.
If, on the other hand, you offer the shipment of another product, you can manage it from your private customer area.
Another option is to give your customer a gift token that can be redeemed in your store for the value of the returned product. In this case, you will have to send the coupon to them or add credit to their user profile for their next purchase.
In short, having the logistical and infrastructure support of Beeping will undoubtedly be a positive point for your ecommerce both in terms of returns policy and also in generating customer confidence.
As we have reviewed in this article, one of the keys to successfully designing a returns policy in an online store is to be transparent about what the whole process of returning an item involves.
We have given the example of the Adidas store, which has several reference points about the different return methods as well as a step-by-step guide for the user to do so.
We also discussed the Return Law for online purchases and the most important points to keep in mind when it comes to organizing a favorable returns policy for your ecommerce business.
Successful cases like Amazon and Zappos do nothing but confirm that customer service is one of the pillars of growth and confidence of any brand working in the online world.
Also, at Beeping, we have the necessary technology to manage the stock and logistics of your entire company as well as the entire process of returning the item so that your customer does not feel distressed by such a process.
What’s more, from the software’s dashboard you can access all the details about the status of your orders, including those that have been returned.
Frequently Asked Questions (FAQ)
How can I reduce returns without hurting customer satisfaction?
By addressing the pain points we have raised in the “Monitoring and continuous improvement” section, such as improving the photo and description of the product, training logistics staff or adapting the packaging to the product to increase its safety.
Should I offer free returns in my online store?
You have the positive experience of Amazon and Zappos, which offer free returns to their customers. However, it is important that you analyze the pros and cons of your store and, in addition, be very clear about in which cases this service will be applied.
How can I manage the costs associated with returns?
In this case, there is nothing better than having a logistics warehouse like Beeping, which will be of great help in managing this type of returns.
What should I take into account when implementing changes in my returns policy?
The most important thing is to take into account the analysis of each of the metrics and be able to adapt the policy according to your store or market niche trends.
What is the impact of the returns policy on the reputation of my brand?
You must keep in mind that an accurate and transparent returns policy will be the perfect bridge for your customer to value the brand and build trust. In short, they are the ones taking the risk of investing in something they are not yet familiar with.