Returns and refunds are often used to express returning money to the customer, but there is a big difference between the two. There are many reasons a customer may want to “return” a product, where they are not expecting to get their money back.
Too many brands focus their return policy around deterring a return from happening at all. From extremely short return windows to burying the policy in fine print.
However, this approach ignores the fact that there are many different reasons a customer may want to “return” a product without expecting a refund. The most common reason for a customer to return is because of size. In fact, size-related returns account for 52% of returns on Shopify. In other words, customers want the product they bought, they just have the wrong version of it. They don’t want to refund the current product but rather get the RIGHT one.
The best return policies are built for different types of returns and focus on making things as easy as possible for the customer. They are designed to enable post-purchase interactions rather than police them.
The best return policies focus on enabling post-purchase interactions, rather than policing them.
Since I’m a visual learner, let's start things off by looking at what a well-constructed returns policy page looks like. From there, we’ll break down the specifics of what to includes and say.
Create a page that is built for your customer, not your lawyer
You just bought a brand new pair of shoes. Your email confirmation tells you that it will be delivered in 2 days. You anxiously await its arrival, even meeting the UPS guy at the door to grab it. You rush inside, try them on… and they’re too small.
You were so excited to get these that you rush to the site to find out how to exchange them. However, instead of a simple answer you’re met with the brand’s “wall of text” return policy.
Your excitement quickly turns into confusion and frustration as you try to decipher how to exchange your shoes, or whether you can even exchange them at all.
Don’t be that brand! The brand that has their return policy set up so that only a lawyer can truly figure out what’s going on. While it’s not wrong to have your full policy laid out somewhere, your customer should quickly and easily be able to understand what they need to know when they visit the returns section of your site.
Instead of greeting your customers with a wall of text or forcing them to navigate through your FAQs, make it simple. Give them the Cliff notes they need to understand your policy and move them to where they can take action. Don’t let all of the initial excitement you built up with the customer turn to frustration.
Brooklinen’s returns page is a great example of how to build a page that is both informative and intuitive.
Brooklinen quickly let’s you know how long you have to return an order and what products are accepted (spoiler: almost anything within 365 days). They also allow you to click into the area you need to learn more about, and they get you started with the process right away.
This experience is going to be much more appealing to anyone excited to get the right product in their hands.
Example pages for inspiration:
Let your customer know exactly what to expect when they start the process
When a customer decides to start a return, they don't have the product they wanted or the money they spent on it until the return is processed. This is a very vulnerable position for a customer to be in, which means your return policy should do everything it can to explain exactly what to expect.
How long is it going to take?
To get exchanged item
To see money refunded to my card
How much is it going to cost?
Cost to exchange (if applicable)
Restocking fees for refunds
Making the above questions easy to answer allows customers to make sense of what will happen during their most vulnerable shopping state. It also has the added benefit of letting shoppers know your process pre-purchase, which reduces the perceived risk and makes them more likely to buy.
Examples pages for inspiration
Make exchanging more appealing than a refund
A refund is almost always a customer relationship deadend. You issue the refund, they get their money back, and they go spend it elsewhere.
When you give added incentives for customers to choose return options that keep the relationship alive (otherwise known as an exchange), you are making an investment in improving customer lifetime value.
You can increase the attractiveness of an exchange in a number of ways:
Have a longer exchange window than refund window
Have a larger catalog of items that are eligible for exchange than refund
Only charge a return shipping fee or restocking fee on a refund
While these are all great ideas, offering an added incentive for choosing to purchase something new instead of taking a refund or store credit is by far my favorite way to encourage exchanges. When a customer is looking to get a refund, give them an extra reward to shop the catalog for something new. The customer now needs to decide if the refund to shop elsewhere is worth forgoing the added bonus you are giving. This is a powerful way to encourage an exchange that also creates a feel good moment they won’t forget.
By using these types of incentives, Baseballism was able to retain revenue on 53% of their returns. This allows customers to easily get the product they want while allowing Baseballism to retain more customers and revenue. As a result, it’s a win-win relationship for the brand and their customers!
Assume good intent until a customer shows you otherwise
One of the biggest problems we see with return policies is that they are too robust and confusing to try and deal with every potential problem that could arise. They are put together trying to catch the people who could abuse it rather than focusing on creating the best experience for the majority.
Only 5% of returns are fraudulent, which means that 95% of orders are being returned exactly as expected.
According to Appriss, only 5% of all returns are fraudulent. Therefore, you should be putting your return policy together for the majority who will be returning items as you intended. When you focus on trying to stop the minority, you are making the experience worse for your best customers.
Build your policy and process for the 95% and deal with the 5% as they happen. It is easy to create a blacklist of returns that you can add the 5% to.
Clearly outline how to initiate a return, and make it as fast as possible
Your policy and details page could be world class, but if the customer is not able to figure out, but it won’t get you far if your customers are not able to figure out how to actually initiate a return.
One of the worst experiences a customer can have with your brand is to feel like they are being blocked. This blockage could occur because they cannot find where to start a return or because they have reached out to your team and are anxiously awaiting a reply.
That’s why the name of the game in the return process is speed and ease. To make things easy, many retailers add a return shipping label to each order but an on-demand returns portal is also fast, convenient, and requires a lot less printing.
Here is a great example of how to initiate a return using a portal on allbirds’ returns page:
You find this page in the footer, selecting your country, and clicking get started. This page starts the return process by asking you to select the type of return you want to do and generating a return label for you on the spot.
Regardless of how you decide to offer a return, you need your customers to quickly find where they can get started.
Examples pages for inspiration:
Build your returns policy with purpose
A well constructed returns policy creates moments of delight for customers in their most vulnerable state. It turns emotional low points into lasting customer relationships, and is one of the best investments you can make to increase customer retention.
A well constructed returns policy turns emotional low points into lasting customer relationships.
However, many online brands simply look at what a competitor or familiar DTC brand is doing and copy it. If you don’t build your return policy with purpose you will not get the benefits. Use the tips presented above, to build a policy that breaks away from the rest and aims to build real connections with your customer!