Guide To Win-Win eCommerce Return Policy (2021)

Guide To Win-Win eCommerce Return Policy (2021)

Reading Time: 4 minutes(Last Updated On: June 2, 2021)

How many times have you returned something you bought online? And even if you by some chance haven’t, you gotta admit that the mere fact that you can return something, makes it easier for you to take the plunge and buy it!

As an online seller yourself, it’s absolutely necessary to offer a very attractive ecommerce return policy if you want to compete in this cutthroat industry. 


What is an ecommerce return policy?

Every customer wants it. Every store needs it. 

Easy ecommerce returns.

An ecommerce return policy describes the terms by which a customer can return an item purchased through an online store. Nowadays it’s not a matter of should you offer a return policy for your products, but rather what terms you’ll offer in your policy. Will customers get free shipping on their returns? How long do they have to return an item?

Dropshippers have to consider all these things when picking a product supplier, as a bad return policy from the supplier could break a business. But here’s the rub. Once you’ve decided on your terms of returns, you need to write it all down and present it clearly to customers on your site. Shopify makes this easy for users with its free return policy generator, which spits out a clear and concise return and refund policy for your store. 


Ecommerce return statistics

Having the right ecommerce return policy in place will do wonders for your sales and customer retention. The numbers speak for themselves.

  • Ecommerce return rate: At least 30% of products bought online are returned vs 8.89% from traditional retailers (Invespcro)
  • 92% of consumers will repurchase from a store if the store has a simple product return process. (Invespcro)
  • 79% of consumers expect free return shipping (Invespcro)
  • The cost of return deliveries in the US was predicted to come to $550 billion in 2020 (Statista)
  • 30% of the purchase price is the cost of the average return (Total Retail)


Infographic by Invesp Consulting

Why do you need an e-commerce return policy?

In one word – Amazon. The ecommerce king has set the bar high, really high, for customer service, shipping and ecommerce returns. They go so far in some cases to even issue refunds before they receive the unwanted item.  But it’s not just Amazon that has an exceptional ecommerce return policy – typically the fastest-growing and most popular online stores and ecommerce marketplace have the best return policies in place. 

Consequently, customers have come to expect nothing less than amazing,  and a good return policy will attract new customers to your store and help you retain customers.


A good ecommerce return policy can strengthen your brand 

When shopping online, people need a tangible reassurance, something to fall back on to ease their post-cognitive dissonance and alleviate any anxiety about buying online. A strong return policy can achieve all that and more. If a shopper knows that they can simply send the ordered item back at no or minimal cost to them, they’re less likely to hesitate and more likely to buy from you, especially if they’ve never bought from you before. An ecommerce return policy that’s not only attractive but is also implemented efficiently and reliably, can also strengthen your brand and heighten customer trust.


Strategies for creating the best ecommerce return policy

Creating the best ecommerce return policy does not have to be difficult or complicated. As long as you constantly track how your return policy affects your profitability to make sure the terms are optimal, it can be as simple as following these easy strategies:

  • Keep it simple – make sure your ecommerce return policy is easy to understand and written in simple language
  • Make it easy to find – no point writing the best ecommerce return policy if customers have to scour your site to find it
  • Try making a video ( or infographic) –  what better way to present your return policy for ecommerce website than with a video or other media showing exactly what to expect
  • Manage expectations – if customers are expecting one thing, but something else happens when they want to return an item, they will be severely disappointed and probably not come back. List everything that will happen during the return policy so that expectations and reality are in sync
  • Offer Free Return Shipping – if you can, offer free return shipping to your customers. Before jumping in the deep end and offering free return shipping, calculate your expenses and profits and make sure you have room for these costs without burning a hole in your pocket. If you start off with free return shipping but it’s not financially smart for your store, it will be difficult to go back and un-offer this benefit

BeProfit profit calculator dashboard automatically pulls all your return costs so you can easily assess the impact of your return policy on your profitability.


2 Amazing eCommerce return policy examples

Most of the best return policies have these things in common: long return window, returns without a receipt, full refunds.

  1. Ikea – the retail giant has a 365-day, full-refund return window for new and unopened merchandise. For opened goods, you can return within 180 days to receive a full refund as long as you have a receipt. Even without a receipt, you could end up getting a refund if they manage to find proof of purchase in their system. The worst-case scenario, which isn’t all that bad, is that you could get a credit based on the lowest price of the item if there’s absolutely no proof of purchase. 
  2. American Eagle – Items can be returned for free for an unlimited time to this apparel leader, as long as you present your receipt, even items without tags! (except for hygienic items of course) Without a receipt, you could still exchange the item or get store credit to the current price of the item.


Key takeaways

If you want your ecommerce store to succeed, you need to get your return policy right, for you and your customers. It’s a delicate balance – on the one hand, you want to offer the most attractive policy you can with all the bells and whistles like free returns, unlimited time window and so on, but this can’t be at the expense of your profits. Finding that return policy sweet spot can be a challenge, but following these tips and staying on top of your return costs can help you create a win-win ecommerce return policy.

Calculate profit with BeProfit - Profit Tracker

Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.