Return Policy: Is Yours Helping You Retain Customers?
3 years ago by

Customers are an asset for any business. In order to ensure that customers keep coming back to you, customer-friendly policies need to be devised. A flexible return policy is one of the factors considered vital for providing a pleasant experience. Being accommodating towards your customers ensures long-term benefits such as customer loyalty and strengthens brand image.

With the increasing trend of B2C ecommerce retailing, it is imperative to devise innovative initiatives that can help businesses drive sales and increase market share. One inherent limitation of ecommerce retail for a customer is not being able to touch or try on the merchandise prior to purchase. To enhance customer satisfaction, having a suitable return policy in place is of utmost importance.

A study conducted by comScore reported that 82% respondents would only complete the purchase if retailers offered free returns while 66% responded that they would review the return policy before making a purchase.

Benefits of a Flexible Return Policy

“GCC region will see a growth of 40% in ecommerce by 2020”, said the senior partner at Frost & Sullivan, Sarwant Singh. Since new shoppers will initially be wary of the quality of a product; a flexible return policy can act as a safety net. Mentioned below are the few benefits of a liberal return policy:

Earn Customer loyalty

A Forrester research commissioned by UPS, the logistics giant, concludes that 81% participants agreed that they would be more loyal to retailers with generous return policies. Customers want a hassle-free policy with no-questions-asked approach. One reason for this is because they wish to be treated with respect. This holds especially true with existing customers who prefer to be extended a certain level of care and trust for being a regular.

If a customer feels that he/she is being accused of a wrongful return, they would feel less inclined to revisit that store in the future. Customers would prefer a policy that realizes their needs in order for them to continue shopping at the same place.

Referrals and Repeat Business

A lenient return policy boosts the sales of a business through positive referrals. It’s not only easier to close business with existing customers but the referrals you get from satisfied existing customers are invaluable for revenue generation. With social media and microblogging on the rise, creating a satisfactory customer experience is really important to gain a positive review in the community of online shoppers.

Gain Public Trust and Social Vote

A lenient return policy can include the options of exchange and full refund, as desired. In order to create a positive impact, it can pay to offer trustworthy terms of services and maintaining transparency. A good example of being transparent can be a clear display of the return policy at the time of purchase. Offering such terms will allow the business to be perceived as sensitive to the customer needs and drive the customers to form a positive opinion about the core business values of the retailers.

Business Growth

When it comes to gaining competitive edge by turning an inherent risk into strength, Zappos’ example comes to mind. While most retailers believed that offering generous returns erodes margins, Zappos proved them wrong by doing exactly that: Offering free returns and shipping.

Incorporating a flexible 365-days return policy in their business model, Zappos offered their customers to return products if they were unsatisfied. As a result, sales actually increased due to increased customer confidence in hassle-free returns.

Customer Service Help Desk

Setting up an Effective Return Policy

In order to design a lenient return policy, a retailer should be mindful of creating ease for customers. A well-crafted return policy should at least incorporate the following clauses for it to be self-explanatory:

Instructions to Return the Product

Customers expect online retailers to have a friendly return policy but usually don’t find this to be the case. To meet customer expectations, retailers need to mention clear instructions followed by a hassle-free process. Keeping the policy simple helps achieve customer satisfaction. After reading the policy, a customer should be aware of what they need to do to initiate the process, how the process will take place and how long will it take to complete.

List Customer’s Options

Listing the customers’ option regarding the product they wish to return is vital. By offering a money-back guarantee or free shipping on returns, businesses actually stand behind their product and gain the trust of their customers. Most online retailers enable customers to return the shipping in the same packaging, which can be dropped off at their outlet or picked up by the logistics company. In addition to that, retailers should also mention whether refunds, exchange policy or store credit is available as an option for different products or not.

Bloomingdale’s takes pride in offering a very lenient return policy that allows international customers to get refunds using the same exchange rate and in the same currency.

Specifying the Time Limit

Retailers can set a number of prerequisites for a qualified return. Time is most commonly used to set a limit during which the purchases can be returned. A great strategy is to offer longer time periods. Accepting returns that are just past the expiration date is also a great way of enhancing customer experience.


We use cookies to personalize your experience on our website. By continuing on our website you accept our use of cookies. You can read our privacy policy here.
close-image

Human Skills 2020

Attend a one-day workshop to learn skills for the future workplace! Limited seats left!
Secure Your Spot Now
close-link