When a shopper buys a gift from your store, you have the opportunity to earn not one but two loyal customers — that shopper, and the person who receives the gift. A poor return policy, however, not only can cut into your store’s holiday sales, but also hurt your reputation with prospective customers.
If you think return policies aren’t a big deal to shoppers, think again.
According to the National Retail Federation 2017 Retail Holiday Planning Playbook, three-fourths of holiday shoppers check a store’s return policies before making a purchase. They don’t always like what they find: 22 percent of shoppers have decided not to buy something because they weren’t happy with the return policy.
Return Policy Mistakes
It’s tough enough competing with online retailers for customers during the holidays. Make sure your store’s return policies aren’t turning shoppers off. Here are 4 return policy mistakes not to make:
1. Your Return Policy is Too Confusing
Is your return policy full of exclusions, fine print and different rules for different types of items or methods of payment? If so, customers are more likely to put the product back on the shelf than to bother trying to understand the policy. Keep it simple. Post your return policy prominently at the point-of-sale, print it on receipts and have every salesclerk explain it to customers when they make a purchase.
2. The “Return Window” is Too Small
Does the customer have two weeks to return an item, or two years? Making your return window shorter might sound like a smart move to discourage returns. In reality, it not only tends to discourage customers from buying in the first place, but also makes customers who do buy something more likely to return it, says a study reported in The Washington Post.
The study analyzed 21 different studies of retail returns policies and found that the longer the return window, the less likely customers are to ever return the purchase. Sounds counterintuitive, but just as a limited-time sale gets customers to hurry into your store, a very limited return window can get them to hurry and ask for their money back before it’s too late.
Keep in mind, too, that holiday shoppers are buying gifts to give weeks or months later. Gift recipients need enough time to make up their minds and return the product.
3. Returning a Purchase is Inconvenient
Nearly two-thirds (64 percent) of shoppers in the National Retail Federation report say if they have trouble making a return, they would be leery about ever shopping at that store again. During the busy holiday shopping season, shoppers who need to return something are more likely than ever to dread the task. Make it as convenient as possible by training all your employees on how to handle returns and, when necessary, opening a separate returns line at the point-of-sale. (The day after Christmas, you may want to open more than one.)
4. You Only Offer Store Credit for a Return
More than half (55 percent) of shoppers will avoid a store with such a policy, according to the National Retail Federation report. While you should always suggest exchanging the product first, you should give customers a refund in their original method of payment. For gift-giving time, offer customers gift receipts that gift recipients can use to get a refund for the purchase amount.
The Importance of Flexibility in Returns
A customer-friendly return policy can be a game-changer for your store’s success, especially during the holiday season. While it’s tempting to focus solely on sales, a well-structured and flexible return policy can lead to long-term customer loyalty and positive word-of-mouth. Here’s why it matters:
- Building Trust: A lenient and straightforward return policy shows that you trust your customers and prioritize their satisfaction over immediate profits. When shoppers know they can easily return or exchange a product if it doesn’t meet their expectations, they’re more likely to feel confident about their purchases.
- Gift-Giving Confidence: During the holidays, people often buy gifts for their loved ones. A gift recipient might want to exchange an item for something they truly want or need. A customer-friendly return policy eliminates stress and uncertainty for both gift buyers and recipients, enhancing the overall shopping experience.
- Reducing Buyer’s Remorse: Buyers sometimes make impulse purchases during the holiday rush and later regret their decisions. A return policy that allows for hassle-free returns can ease buyer’s remorse and encourage customers to shop without the fear of being stuck with an unwanted item.
- Long-Term Engagement: A positive return experience can turn a hesitant first-time shopper into a loyal customer. By treating returns as opportunities to create positive interactions, you can establish a reputation for excellent customer service, which leads to repeat business.
- Competitive Advantage: In an era of online shopping dominance, physical stores can stand out by offering a return policy that’s as convenient as their digital counterparts. This can draw more customers to your store and help you compete effectively.
| Aspect | Description |
|---|---|
| Building Trust | A lenient and straightforward return policy demonstrates trust in customers, prioritizing their satisfaction over immediate profits. It fosters confidence in making purchases. |
| Gift-Giving Confidence | During holidays, a customer-friendly return policy alleviates stress for both gift buyers and recipients. It allows recipients to exchange items for what they truly want. |
| Reducing Buyer's Remorse | A return policy that facilitates hassle-free returns minimizes buyer's remorse, encouraging customers to shop without fearing they'll be stuck with unwanted items. |
| Long-Term Engagement | Positive return experiences transform tentative first-time shoppers into loyal customers. Treating returns positively establishes a reputation for excellent customer service. |
| Competitive Advantage | Offering a convenient return policy distinguishes physical stores from online retailers, attracting more customers and allowing effective competition in the digital age. |
In crafting your return policy, consider striking a balance between customer satisfaction and business sustainability. While it’s essential to protect your store against abuse, focusing on customer needs and convenience can be a strategic advantage that sets your store apart. Remember, in the long run, the loyalty you gain from satisfied customers will likely outweigh any short-term losses from returns.
Frequently Asked Questions (FAQs)
Why is a poor return policy detrimental to my store’s holiday sales and reputation?
When shoppers buy gifts from your store, both the purchaser and the recipient become potential loyal customers. However, an unfavorable return policy can hinder this loyalty and impact your holiday sales. It can also tarnish your store’s reputation with potential customers who consider return policies important.
How significant are return policies to holiday shoppers?
According to the National Retail Federation’s 2017 Retail Holiday Planning Playbook, three-fourths of holiday shoppers examine a store’s return policies before purchasing. 22 percent of shoppers have decided against buying due to unsatisfactory return policies.
What are some return policy mistakes to avoid during the holiday season?
To prevent turning shoppers away, avoid the following return policy mistakes:
- Making the policy confusing with exclusions and fine print.
- Setting an excessively short “return window.”
- Creating inconvenience for customers returning purchases.
- Providing only store credit for returns, dissuading customers.
Why is a simple and clear return policy essential?
A complicated return policy, filled with fine print and various rules, can discourage customers from understanding and engaging with it. To enhance customer satisfaction, make the policy straightforward, display it prominently, and ensure sales staff can explain it.
Why should I consider a longer return window despite initial reluctance?
Surprisingly, studies show that a longer return window often leads to fewer returns. While it might seem counterintuitive, a short return window can cause rushed returns. Additionally, for holiday shoppers who buy gifts ahead of time, a longer window provides recipients ample time to make decisions.
How does inconvenience impact returns and store perception?
Approximately 64 percent of shoppers, according to the National Retail Federation, are wary of stores with inconvenient return processes. Especially during the busy holiday season, making returns convenient by training staff and potentially establishing separate return lines can be crucial for retaining customers.
What’s the impact of offering only store credit for returns?
Reports indicate that 55 percent of shoppers would avoid a store with this policy. While suggesting exchanges is reasonable, it’s also important to offer refunds in the original payment method. During the holidays, providing gift receipts allows recipients to receive refunds, ensuring satisfaction.
Why is a flexible return policy important for customer loyalty?
A customer-friendly return policy can have a profound impact on your store’s success, particularly during the holiday season. It fosters trust, instills confidence in gift-giving, reduces buyer’s remorse, and encourages long-term customer engagement. Additionally, it offers a competitive edge against online retailers.
How does a customer-friendly return policy build trust?
By prioritizing customer satisfaction over immediate profits, a lenient and clear return policy demonstrates trust in your customers. Shoppers feel assured they can return or exchange items that don’t meet their expectations, fostering positive sentiments.
How does a flexible return policy benefit gift-giving during the holidays?
Holidays often involve gift-giving, and recipients might want to exchange items for something they truly want. A customer-friendly return policy alleviates stress for both gift buyers and recipients, enhancing the overall holiday shopping experience.
How can a return policy reduce buyer’s remorse?
During holiday rushes, impulse purchases can lead to regret. A return policy that allows easy returns minimizes buyer’s remorse and encourages customers to shop without fearing they’re stuck with unwanted items.
How does a positive return experience contribute to long-term customer engagement?
A pleasant return experience can transform a tentative first-time shopper into a loyal customer. By viewing returns as opportunities for positive interactions, you establish a reputation for excellent customer service, encouraging repeat business.
How can a return policy offer a competitive advantage?
Amidst the dominance of online shopping, a physical store with a convenient return policy stands out. By offering a return experience as seamless as digital counterparts, you can attract more customers and remain competitive.
How can I strike a balance between customer satisfaction and business sustainability in my return policy?
While guarding against potential misuse is important, prioritize customer needs and convenience. This strategic approach sets your store apart and fosters long-term loyalty, outweighing short-term losses from returns.
Unhappy Shopper Photo via Shutterstock
Aira Bongco
Right. It should be welcoming. With this, more people will fell safe buying from you.
I thought that the return policy can hurt your business. But it is more about not having a proper return policy. Well, a policy that appeals to customers will definitely make them feel safe to buy from you.
We still have time to alter the policy. Just make sure that it communicated well to all employees.