<img height="1" width="1" src="https://www.facebook.com/tr?id=896003477148137&amp;ev=PageView &amp;noscript=1">

How to Use Your eCommerce Return Policy to Increase Sales

March 16, 2017

return-policy.jpg

When was the last time you revised your return policy?

Hell, when was the last time you even looked at it?

An eCommerce return policy is often an afterthought when building your website. “Oh crap, we need a return policy! Let’s just generate a generic one and put our name on it, it’ll be fine.”

If you’ve done this (and don’t worry, you’re not alone - I did it for three of my online stores) you’re leaving money on the table.

via GIPHY

Here’s why: Roughly 67% of shoppers say they normally check the return page before making a purchase. If they don’t like what they see, they won’t buy.

That’s why we’re writing this post: To teach you how to write a return policy that sells your products for you.

Prefer watching a video to reading? Check out the webinar we just did on how to increase sales with your return policy.


Here's a quick index to help you navigate this article:

9 Ways to use a return policy as a sales tool

  1. Offer free returns
  2. Offer a free trial
  3. Utilize automation
  4. Evoke emotions
  5. Make it look damn good
  6. Make your policy easy to find
  7. Shoot a return demonstration video
  8. Provide a longer return period
  9. Provide great customer service

Great return policy examples


As the famous Mario once said, "Here we go!"

Why Bother Creating a Great eCommerce Return Policy?

Your return and exchange policy, when done well, means:

  • More people will buy if given the option to return a product.
  • People are willing to pay more for the option to return a product.
  • Customers will come back after a good return experience, but a bad experience will turn them into a hater, costing you sales.
  • Your return policy will become a marketing tool. Word of your awesome policy will spread across the internet like a marketing virus.

Here's how:

I’ll start with the numbers. With so many people looking at return policies before making a purchase, there has to be some statistical data to this, right?

Actually, there is. For you statistics nerds, I have something you’ll love. (And don’t worry, if you’re not a statistic-minded person, I’ll explain it in layman’s terms as well.)

Eric Anderson and company performed a study to find out exactly how a return policy affected online sales. They crunched the numbers on Babies R’ Us returns. Here’s what they found:

Look confusing? Let me explain…

According to the study, “the model works by calculating the base probability of purchases customers will make (based on their past history), and then recalculates how this probability will change given the option to return the purchase.”

“For example, there is an 8.7 percent chance that an average customer will buy a pair of women’s shoes in a given month if she is allowed to return them. But the probability that she will buy those shoes decreases by 0.030 if she cannot return the item (Figure 1). This translates to a 53 percent increase in demand for women’s shoes if the buyer can return them.


That’s not all. Listen to what else the study found:

“They calculated that while men were only willing to pay $3.19 for the option to return tops, women were willing to pay $5. But the real surprise lay in footwear. Women were willing to pay an extra $15.81 per pair of shoes if they had the option to return them later when the average price for shoes was around $50.”

People will pay more for the option to return an item!

Now, let me ask you...

Have you ever returned an item you bought online? How was that experience?

Chances are, if you had a good experience, you bought from them again. But, if your experience sucked, you avoided them… and probably talked some trash about them to your friends.

 

The bottom line is this:

It may be tempting to make it as difficult as possible for your customers to make a return. Afterall, you don’t want them to return anything since it would mean a loss of money.

However, allowing returns (and making them stupidly easy) will net you customers for life, and will win you competitor’s customers who had a bad return experience.

Make the return process easy, friendly, and downright fun to make more sales long-term.

In fact, you should want your customers to return stuff! Zappos has found that its best customers have the highest return rates, and still they come back for more.

These shoppers are “the ones that spend the most money with us and are our most profitable customers,” says Craig Adkins, Zappos VP of services and operations. 

Now that you're convinced, let’s start building your return policy.

9 Ways to Use a Return Policy as a Sales Tool

While we’re not going to cover exactly how to write your policy word for word, I’ll give you a few tips on what to include in your policy.

Stay tuned, because I’ll also show you some examples of great policies to give you some inspiration.

So, let’s start with...

#1: Offer free returns

Every great return policy offers free returns. Think about it - have you ever had to pay to return an item? It friggin’ sucks!

Having to pay to return the wrong size shirt or a gift you got for Christmas is like...

Well, it’s just not fun. Don’t make your customers go through that experience.

Listen, I get it - as small business owners, we need to keep overhead as low as possible. But, is that $10 really worth losing that customer - potentially worth hundreds or even thousands of dollars over their lifetime - forever?

#2: Offer a free trial

Free trials take free returns to a whole new level. It’s like going to a car dealership; If you’re serious about buying, they’ll let you take the car home for a weekend to see if you like it.

Let me give you an eCommerce example…

Glasses Direct is a UK based online prescription glasses retailer. They have two excellent return and refund strategies to get buyers to commit.

One of them is offering a 7-day free trial of their glasses.

By allowing their customers to trial their products, they’re ensuring two things:

  1. The customer gets the pair they truly love, reducing the chance of a return (despite the customer easily being able to do so).
  2. The customer won’t be afraid to order the wrong pair and be stuck with them because they have that guarantee, making it easier for the customer to commit to buying.

#3: Utilize automation

There are two keys to business success: Delegation and automation.

Automating a process frees up your valuable time to work on the things you can’t delegate or automate - the things that really move the needle for your business.

How can you automate a return policy?

  • Make it easy for the customer to track their own order status and request a refund without contacting customer support. (You can easily do that with the Returns Manager app!)
  • Send emails at every step of the way - when you receive their item, when the refund is issued or a new item is sent.

These two small steps can save you (or your service department) hours of time, which translates to money in the bank.

Additionally, automatic emails give you the opportunity to promote new or similar products with a discount code.

Think, “Sorry you didn’t enjoy our beard comb! You might like our new beard balm that makes your beard fuller and softer. Here’s an exclusive 10% off discount code if you’re interested in a healthier, sexier beard!”

They may have returned one product, but that doesn’t mean you can’t sell them another!

#4: Evoke emotions

People are emotional creatures. Even if we don’t all admit it, we do things based off of feelings and gut reactions, not logic.

 

The main emotion we’re looking for in a return policy is empathy. (What face does empathy look like? Maybe the guy in the bottom left…)

People can tell if you care about them based off of how your returns page looks.

Get this: A 10-year study found that brands that could evoke a strong emotional response from customers can sell more, drive customer loyalty, and successfully charge 20% to 200% more than competitors.

I know you want to be able to charge more than your competitors without losing customers.

So the question becomes, how do you bring something as drab as a return policy to life with emotions?

Be funny! Try to make your customers laugh. For example, Man Crate does this well on their FAQ page (which includes covering their returns policies) with random subtle hints of humor:

"Man Crates doesn't have any wrapping paper in our warehouse, but we do have tons of duct tape.  If you're dead-set on sending a gift he can unwrap like a kid on Christmas morning, choose the Diabolical Duct Tape Cocoon during checkout."

 

Be empathetic. Understand that returns happen, and don’t make your customers feel bad for wanting to make a return. For example, Strong Suit Clothing says this in their return policy:

“Sometimes things don’t quite work out. We understand and in the unfortunate circumstance that you need to return your Strong Suit, we’ll make it easy. All unworn, unaltered clothing with tags still attached can be returned within 15 days of delivery for a full refund, no questions asked. Oh yeah, returns ship for FREE too.”

Follow step five...

#5: Make it look damn good

Here’s what you don’t want:

Ahh, my eyes! Who’s going to read that? No one, that’s who.

Instead, try to do something like Zappos did with their return page:

Here’s what I love about it:

  • They advertise their rewards program to make returns even easier and cheaper.
  • They show off their “Fast & Free” return shipping in big bold letters.
  • They make it graphical - Three simple steps to make a return. They even give you a link to find a local UPS shipping center!
  • Finally, they show off their app. See? Returns can be used to push other parts of your business!

A little formatting, some color, and a few images can completely reinvigorate an ugly return and exchange page. It’s like a fresh coat of paint - it’s not hard to do, but it makes a world of difference.

#6: Make Your Policy Easy to Find

If you bury your return policy in tiny font at the bottom of the page, you could lose some of the 67% of people that check the policy before they buy merely because they couldn’t find it!

Instead, I propose you promote your return policy on your homepage.

Use it as a marketing tool! That sucker will bring you more sales! Why hide it?

For example, L.L. Bean showcases their 100% satisfaction guaranteed return policy front and center:

#7: Shoot a return demonstration video

Just because people tend to look at the return-ability of a product before they purchase, doesn’t guarantee they’ll buy.

One survey found that 27% of consumers are put off ordering something online in the first place because they don’t want the hassle of returning it if it’s not right.

Shooting a video allows you to make returns as hassle-free as possible, and you’ll capture the one in four people who would have left had the return looked too difficult.

Going back to Zappos, their old return page used to have a video entitled “How to Complete a Return at Zappos.com”:

It doesn’t get much simpler than that! To create a video, you can use a free screen capture tool like CamStudio.

#8: Provide a longer return period

Zappos offers a legendary 365-day return policy. Nordstrom handles returns “on a case-by-case basis with the ultimate objective of making our customers happy.” Costco gives it’s customers 90 days.

A longer return period gives your customers the confidence to buy from you without fear of needing to return the item right away.

Here’s the kicker: fewer people claim returns when given a longer window.

It comes down to psychology. People tend to prefer items they own over items they don’t, something consumer psychologists call the endowment effect.

via GIPHY

As an item sits in their home, gathering dust and becoming a part of their usual environment, the chance they’ll return it goes way down.

Try to offer a 90-day return policy to take full advantage of this psychology.

#9: Provide great customer service

Providing amazing customer service should be part of your business goals, anyway. The cost of bad customer service is massive, affecting much more than mere returns.

Here’s why: Of the 60% of online shoppers that make at least one return or exchange per year, 95% will make another purchase if the return experience is positive.

That means you won’t lose the customers who make returns as long as you provide them with a great experience.

How do you do that? Simple:

  • Be kind, courteous, and empathetic. Don’t make it sound like returning their item is a hassle for you.
  • Smile! People can literally hear if you’re smiling by the sound of your voice. Hell, smile when you write emails, too - it will affect the language you use.
  • Thank them for shopping with you and be sure to let them know how much you appreciate them.
  • Try to remember your customers. People want to feel important, and when you’re remembered, you feel important.

For example, Zappos actually encourages customers to order two sizes of shoes to make sure they end up with one pair that fits. Their use of logistics as a competitive service advantage is one reason 75% of the retailer’s shoppers are repeat customers.

While this policy drives up return volumes and shipping costs, it reduces customers' hesitancy to place an order and results in more sales overall.

Just remember the golden rule: Treat your customers how you’d like to be treated when you do business with someone!

Great Return Policy Examples

I promised you a return policy sample - but instead here are five examples from stores (big and small) to inspire your writing.

  1. The Repeater Store - Simple, excellent formatting, empathy with cell phone booster customers, and a nice 30-day money back guarantee.
  2. Kayak Pro Shop - Short, sweet, and displayed from every page.
  3. Strong Suit Clothing - They proudly display their “100% fit guarantee” right from the home page. Their clothes fit, or your money back.
  4. Fragrance Outlet - Their 100% satisfaction guarantee, in combination with their simple 4 step process and their easy access to customer service information makes this a great return policy sample to steal ideas from.
  5. IKEA - Because “It’s OK to change your mind.”

Now you have some ideas for what to include in your return policy! Let’s sum it all up.

Conclusion

Here’s a quick recap. When writing a return policy:

  • Keep it simple
  • Don’t use complicated legal jargon
  • Maintain your brand voice (especially if you use humor)
  • Don’t make it hard to find

By following these few simple rules, you can turn your refund and exchange policy into a sales machine!

 

I challenge you to write a killer return policy - then share it in the comments below! The best one wins a cookie!

P.S. If you want to make returns quick and painless for you and your customers, don’t forget to check out the Returns Manager app for Shopify.

Topics: eCommerce News

Bill Widmer

Written by Bill Widmer

Bill is an eCommerce content marketing and SEO consultant. He's run several stores and worked with many well-known brands including A Better Lemonade Stand, SaleHoo, and Lifehack.

Search the blog!
  • Video Commerce on Shopify
  • Returns & Refunds on Shopify
  • Shopify Subscription Box
Shopify CRO