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Is Your Return Policy Helping Or Hurting Your Business?

Estimated reading time: 6 minutes

I have a relatively new hobby, and that is quilting.

I find my happy place in the sewing room and cutting and sewing fabric uses a different side of my brain – which I find relaxing and very therapeutic.

I usually go to the big box stores for quilt fabric mainly because they typically have a good selection, and you can always find a coupon to lower the cost.

Well, the pandemic has changed that. Like most other retailers, craft stores don’t carry as much stock as before the pandemic, and coupons are a little more scarce.

The quilt that I’m making is special, and I was picky about the fabric, so I decided to look for a quilt store.

Quilt stores specialize in quilting-related products but also carry better cuts of fabric and a bigger collection of complementary fabric.

I found a small quilt store close to home and decided to check it out.

The store was clearly a typical mom-and-pop shop. Grandma and Grandpa were manning the store while a couple of kids were running up and down the fabric isles.

I honestly didn’t mind. I spent probably an hour picking out fabric and finally had what I thought was a good selection for this quilt.

I needed an accessory, so I picked that up also. I knew that I was going to spend more than at the box stores, and I was ok with that, particularly with the pandemic. I wanted to support small businesses.

When I was checking out, I noticed a sign by the cash register that said: “25% restocking fee applied to all returns”.

I’ve heard of that kind of business policy before, and I honestly understand why a small business would think that was a good idea.

However, is it?

I’m not someone who returns items often, but when I do, I want a no-hassle, no-questions-asked return experience.

Why is your return policy so important?

Demonstrates Commitment To Building Trust

When I purchase from an organization that has a customer-friendly return policy, I have confidence and trust that I can try the product and return it if it doesn’t work the way I had hoped it would.

It Takes Away The Decision To Buy

In the example of the quilt story, I now know what the return policy is so I will think twice or three times before making a purchase – in case I need to make a return.

Provides An Incentive To Buy Again

There is a natural incentive to return to a merchant with a friendly return policy.

For example, I can purchase fabric and return unused fabric to big box stores. Knowing this quilt store charges a restocking fee will make me more cautious with my purchases.

Word Of Mouth Is Powerful

I’m a Costco fan. Not everyone likes the warehouse shopping experience, but I do. Their return policy is very flexible, and I never wonder about making a purchase there.

In fact, I purchased some clothing items at Costco. The store does not have changing rooms, so you need to take them home to try them on.

I bought a couple of sizes and several colors of this item. I purchased six. I wore one of the items, and after wearing it, I decided that I didn’t like the way that it fits. So I took the other five items back to Costco.

The friendly clerk took my return and noticed that I had bought six items. I told her that I didn’t return one because I wore it.

She said, “that’s ok if you don’t like it bring it back…” Well, guess what, I didn’t take it back just out of principle (I think that would be wrong).

But I have told countless people about the great customer experience, and I am a committed life-long customer.

They may have had to restock that merchandise, but what we spend there will more than make up for any loss they may have from that return.

Word of mouth is a powerful tool that should never be underestimated!

What should go into a return policy?

Length Of Return Period

Return periods can be as short as seven days to as long as 90 days. I would argue if you are going to accept returns, a more generous return period can only send a positive message.

Requirement For Return

Most businesses will require that the item is not used when returned. However, some merchants will take returns on defective products after they are used.

Process To Return

Most brick-and-mortar merchants will take returns at the store register.

However, online shopping makes that difficult to do.

Online purchases are typically the most difficult to return. If you are going to take returns for online sales, make the process as easy as possible for the customer.

The goal is (or should be) to get customers to purchase again in the future, and easy online returns is one way to ensure that.

For instance, I placed an online order for some liquid soap (a pandemic luxury item). I received the box of 6 bottles of soap, and two of the bottles leaked all over the box and were half-empty by the time I received them.

When I tried to return them I was required to “prove” that the product leaked.

The soap vendor had a poor return process in that they did not have the infrastructure to support it – meaning when I tried to send a photo, and their emails would not take the image.

Consequently, I will never order from that company again. So sad, they lost a customer for a measly $8.00!

By contrast, Amazon has done a great job with online returns by offering the customer the option to return (most) items to Kohl’s stores.

Items Not Available For Returns

Sometimes a return policy needs to designate products or merchandise that is restricted from the policy.

There are some items that make sense to exclude from the policy.

For instance, Walmart will not take returns on electronically fulfilled PINs or minutes for prepaid cellular devices, video game download cards, or eDelivery software.

The pandemic has taken its toll on small businesses all across America. Many of these business owners are struggling to survive.

However, if you are a small business owner, be smart with your return policies. Flexibility with returns may cost you a little on the front end, but giving a customer the confidence to shop with you may just win you a customer for life! And a loyal customer will more than makeup for the loss!

How flexible is your return policy?

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