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How Your Returns Policy Affects Your Online Business Success
How Your Returns Policy Affects Your Online Business Success

Returns and refunds are all part and parcel of running an e-Commerce business. However, in your customer’s eyes, the way a business handles this process reflects how it deals with customer service in general. Perception is one thing, but an unclear or restrictive e-commerce returns policy is costly for both retailers and customers. It ends up consuming a lot of time, money and energy, not to mention a seemingly endless amount of back and forth when it comes to customer communications. If you do get this process right though, you’ll start to see how this can be a chance to generate more long-term revenue, to demonstrate strong standards of service, and increase customer retention. Meaning that you’ll have the ability to change what once was a dreaded part of running an online business into a tool that gets you positive long-term effects. 

Why Turning Your Returns Policy Into a Win-Win Matters

68% of shoppers check a website’s return and exchange policy before making a purchase (according to UPS). That’s why it’s common for many brands to advertise “free,” “easy,” and “no-hassle” returns and exchanges to increase conversion rates and online purchases.

With the amount of competition happening in the e-Commerce space, the power of standing out lies in the extent of flexibility, responsiveness and increased convenience online businesses can offer. Customers could be returning products for a myriad of reasons – they could have been faulty, they received the wrong item, or maybe it didn’t fit properly. Customers, however, want to be assured from the get-go that making an shopping online will simply be an extension of the in-store experience they are accustomed to. 

Whilst the mere thought of a customer returning your product or asking for a refund can be a painful experience (mainly from a monetary and resources standpoint), it’s not an aspect to be brushed aside. 

A Great Returns Policy Is Important Because

  1. A poor returns experience could make its way onto Google reviews and social media comments, hurting your brand’s reputation. According to Nielson’s Global Trust in Advertising Report, 66% of people surveyed trust consumer opinions posted online so negative sentiment makes a huge impact. 
  2. There are so many online options readily available, and a bad returns experience easily gives customers a reason to look elsewhere.
  3. It benefits both you and your customer as a powerful tool that i) demonstrates your commitment to customer satisfaction and ii) makes their shopping experience one they look forward to repeatedly.
  4. A whopping 96% of customers would shop with a retailer again based on a good returns experience.
  5. 33% of shoppers would be deterred from buying if they cannot locate the returns policy online.
  6. It’s getting more expensive to acquire new customers and a solid returns policy is the most common driver of strong repeat purchase rates.


Take the time to resolve this so it becomes part-and-parcel of building rapport with your customers and sustains positive reputation management. Whether it’s opting for swift and easy RMA systems that simplify self-returns, or deciding on a cross-sell strategy that smoothens customer returns into exchanges; these need to be considered when you draft your policy. A company that decides on a painless, well thought-out returns strategy is one that not only retains their customers, but encourages a great experience that they’ll share with their friends, too.

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