Tips for Today: Creating a Smart Return Policy
After the hustle and bustle of the holiday shopping season, it’s only inevitable that, for some retailers, January can seem like the “month of returns.” Most returns are straight forward – customers just want to exchange for a different size or color, or maybe they just want a store credit to come back later. But, other times, returns for cash or other non-store credit can take a big hit on a small business’ bottom line for January (and beyond).
So, how can you, as a small business owner, create a return policy that is both fair to customers AND protective of your business? We’ve got a few tips to get the wheels in motion:
Review Your Returns
How likely are returns in your location? What are the trends for returns? Review return data and qualitative data (i.e. customer feedback or comments on your return policy) to understand if a change needs to be made.
Take a Look Around
What are your direct competitor’s return policies? Assuming they have a similar business model and customer base, it might make sense to ensure your return policy is as fair (if not more fair) than their return policy. Losing a sale solely because your return policy is too strict is a bummer.
Cover Your Bases
Regardless of the specifics of your return policy, make sure you cover the basics:
- Time limit for returns (we recommend 15-30 days for small businesses)
- Standards for returns (i.e. original packaging, must have receipt, etc.)
- Reimbursement standards (or, will you refund the amount onto a credit or debit card, provide cash or issue a store credit?)
- Exceptions for returns (or, what items are exempt from the return policy?)
Make it Clear
Ensure that your employees and your customers know the in’s and out’s of your return policy. Sometimes, the most frustrating part about a return is when neither party (employee and/or customer) doesn’t know what to expect. Print it on your receipts, put it on your website, and have a sign by your register. You can even have your customers initial by the policy on their own receipt – that way, they can’t say they “didn’t know.”
What challenges does your small business face when it comes to returns?