Creating a Customer-Centric Returns Policy: Best Practices from Industry Leaders

Return requests are inevitable in e-commerce. 

From not being able to choose the right product to the item not meeting the expectations of the buyers, there are several reasons why businesses experience high returns across industries. 

While a good returns policy can help businesses secure their inventory and reduce losses in logistics, it also impacts the overall customer experience. 

In this post, we’re sharing some best practices gathered from industry leaders on creating a customer-centric returns policy. 

Why is a customer-centric returns policy important 

A good returns policy is a strategic asset to businesses in many ways: 

• Improved brand reputation - A fair and transparent returns policy helps position the brand in a positive light, improving the overall perception in the target market. 
• Boosts customer trust - The clarity of a returns policy increases customer trust in the value your business has to offer. 
• Reduced purchase hesitancy - Customers become more likely to make purchases when they know they have the option to return items without hassle. 
• Competitive advantage - Return policies can help brands stand out, especially in industries where customers often experience dissatisfaction. 
• Valuable feedback loop - Returns made under the policy help gather data that can help brands improve products, processes and inventory management. 
• Increased customer loyalty -  With better customer experiences and development that is based on customer insight, brands experience an improvement in customer retention and loyalty. 

Best practices to create a customer-centric returns policy 

While different industries call for adapting the returns policy to suit their customers, products and services, here are some best practices that apply to all: 

1. Keep the policy simple and transparent 

Most policies and terms and conditions go unread owing to how ‘complex’ they sound. But customers appreciate clarity. It should clearly state what they can expect and how the returns process works. Take for example, the returns policy of Amazon or Zappos. 

• Keep the language user-friendly.
• Create multilingual policies for different markets. 
• Clearly state what is eligible for returns and not. 
• Outline the steps for returning an item. 
• List any applicable fees, restocking charges, or taxes applicable. 
• Mention the non-refundable items upfront. 
• Add and update frequently asked questions within the policy to address confusion. 

PS. If you’re struggling to write a returns policy, you can use Shopify’s refund policy generator. 

2. Offer an ample return window 

Give your customers enough time to consider their purchase without pressure. The return window you offer has a direct impact on how customers feel about your brand and reassures them of the promise to quality. 

• Considering offering at least 30 days for return requests. 
• Avoid restrictive deadlines. 
• Create a clear path to request an extended return window for instances such as travel. 
• Factor in seasonal periods or special purchases like during the holidays. 

3. Create a simple return process 

A customer should be able to quickly request returns across touchpoints without having to go through a lengthy process. For example, Apple lets you initiate returns through their website, email or even retail locations. 

• Minimize the number of steps in the process. 
• Offer a self-serve online portal to request and track refunds (this also helps reduce the number of queries agents have to handle). 
• Offer in-store, mail-in and third-party drop-off points where possible. 
• Automate refund updates via key channels like email and SMS. 
• Ensure the process is mobile-friendly. 

Simplicity is the cornerstone of exceptional customer experiences. A return process shouldn't feel like a chore. From self-serve portals to automated updates, every touchpoint should reflect convenience and clarity because a happy customer today is a loyal customer tomorrow.- Suhagkumar Vamja Associate Director Product Marketing

4. Leverage technology to personalize returns experience 

Personalized returns are the future of post-purchase experiences. Brands like Amazon use customer data and AI to offer personalized recommendations when a customer initiates returns. This includes suggesting alternative products, product variants of the accounts they can request refunds in. 

• Offer exchange recommendations with similar products or product variants. 
• Create a smart portal for customers to manage, track and update refunds. 
• Set up automations to improve return processing speed and human error. 

50% of customers won’t shop again if they experience poor returns. It can be easily capitalized by leveraging AI and automation. With tech brands can offer great service to ensure a loyal customer base. It is crucial to turn return into a key moment to improve customer satisfaction - Shashwat Swaroop Founder Return Prime.

5. Offer instant refunds or store credits 

While processing times may vary, the best of brands usually offer instant refunds or store credits. This ensures customers don’t feel like their money is ‘on hold’. 

• Offer an instant refund in store credits to encourage a purchase from your brand. 
• Expedite refunds to reduce waiting times. 
• Communicate the refund timeline clearly in the policy. 
• Mention causes of potential delays in refunds. 

6. Communicate policy changes 

If there are any changes to your returns policy, or to product-specific returns, communicate the same with your customers. This ensures nothing is misconstrued in the process. 

• Send out a notification via email, SMS, social media or other channels about the policy change. 
• Explain the policy adjustments made. 
• Offer a grace period to existing customers. 

7. Integrate sustainability into the policy 

Studies have found that 78% of consumers today care about sustainability. Brands like Patagonia have integrated this into their policies, offering to repair products rather than replace them. This encourages their customers to consider a product before requesting returns to help reduce carbon footprint. 

• Communicate how customers can engage with your brand’s sustainability efforts. 
• Offer added incentives to customers who choose alternatives to returns like discounts for repairs or exchanges. 
• Partner with recycling or repurposing programs for items that can’t be resold. 

8. Provide free returns (when possible) 

Research suggests that customers are more likely to purchase from companies that cover return shipping. That’s why brands like ASOS and Boohoo have made free returns a part of their policy. 

• Clearly define when free returns are applicable. 
• For international orders, consider partial coverage on returns. 
• If not possible, clearly state the fees involved. 

9. Use returns as a feedback opportunity 

Return requests offer an opportunity to get insights on improving customer experience. It helps you improve products/ services, anticipate future customer needs and lower return rates over time. 

• Gather customer data as part of the process through a short survey. 
• Segment feedback and follow up with customers to gather individual inputs. 
• Create a consolidated reporting system for cross-department collaboration. 

How to measure the success of your returns policy 

The e-commerce industry is continually evolving. That’s why it’s important to also measure the success of your returns policy and adapt to how customers are responding. 

Here are some key metrics to measure: 

• Return policy reads - Monitor the number of people who visit your returns policy page and preferably track the scroll point to see how much of it they read. 
• Return rate - Measure how often customers are returning products to assess quality issues. 
• Customer satisfaction - Track customer feedback on the returns process to identify areas of improvement. 
• Refund processing time - Keep a check on the average time it takes to issue a refund to your customers. 
• Net promoter score - Measure customer loyalty post-return to understand if your returns policy is adding to or taking away from brand trust. 

Conclusion 

Creating a customer-centric returns policy isn’t just about enabling the process of returns - it is about building a positive experience that helps reflect your brand’s commitment to customer satisfaction. 

While these are some best practices used by industry leaders, we do recommend researching your market and competitors thoroughly. This helps you understand how they’re handling returns or even identify opportunity gaps. 

But irrespective of the industry you are, the first step to making your returns policy customer-friendly is to simplify the process. 

Streamline your returns today.