How to
How to Master Your Small Business Return Policy
When you’re running a small business, chances are you are juggling a lot of moving parts. And you may not necessarily have thought of or devoted time to your return policy.
But, in this day and age, a well-defined small business return policy is a critical element of businesses that have an online presence.
In fact, it’s estimated that 67% of consumers will review a company’s return policy to decide whether or not they want to purchase a product.
In this article, we’ll unpack the basics of a quality return policy and how it can benefit your business. We also have a helpful framework for you to use to determine how to handle customer complaints.
The 4 Elements Every Return Policy Should Have
A great return and refund policy is one that clearly communicates to your customers how you will handle certain situations and scenarios.
And every return policy should embody four necessary elements. These elements are designed to get to the heart of what consumers want to know before they engage with your business.
Make sure to include:
- Policy duration
- Breadth of coverage
- Liability
- Processes
When covering your policy’s duration you want to clearly spell out how many days a customer will have for a full or partial refund.
Next, you’ll want to outline the breadth of coverage, or what products and services your return policy includes.
From there, you need to identify who is responsible for covering costs associated with returns or refunds. This includes such costs as return shipping costs and restocking fees.
Finally, you need to specify the process customers should take for returns and refunds. Include what providers will be used (UPS, FedEx, USPS) for returns, and how refunds will be processed and received.
Benefits of Well-Defined Return Policies
As we mentioned earlier, many potential customers will check your return policy before deciding to do business with your company.
A defined return policy can sway those consumers to ultimately purchase, but it can also do much more than just converting prospects into actual customers.
Quality refund and return policies can:
- Boost customer acquisition
- Enhance brand recognition and reputation
- Increase positive reviews and ratings
Return policies can build your brand’s reputation for excellent customer service. Publicly displaying a fair and clearly communicated return policy online can reach thousands of users. And this transparency can also lead to consumers placing trust in your business or being satisfied with a smooth return process.
If customers are satisfied with the way that you handle returns and refunds, your return policy may even inspire them to write positive reviews on your website or other important platforms like Facebook or Yelp.
Three Options for Handling Customer Experiences
When faced with an unsatisfied employee, you have three options: replace, refund, or rework.
These customer service solutions depend on your business, industry or state.
If you are in a service-based industry, like cleaning or HVAC, you may not be able to offer returns or full refunds, due to the typically high-cost nature of service projects. But, what you can offer your customers is a partial refund or a chance to re-do the work they are not satisfied with.
On the other hand, if you are a product-based business you will be able to offer returns or even full refunds. The tricky thing with this is you want to be very wary of the costs associated with returns, like shipping, restocking or recycling.
It’s helpful to have a framework for making fair decisions in customer service scenarios. If you can’t decide whether you should replace, rework, or refund a customer, you may want to consider following a simplified framework of key considerations before you make your decision.
Use the framework below to guide your decision-making process when confronted with a dissatisfied customer. Remember to weigh the consequences of not taking action to resolve a customer complaint with the costs typically associated with returns and refunds.
