As the level of marketplace competition continues to rise, merchants are facing more demands to keep their customers satisfied. Now more than ever, consumers are looking at a seller’s return and refund policy as an aspect of their product evaluation.
Sellers who don’t generate or maintain a comprehensive return policy that attracts and satisfies consumers are ceding an important competitive advantage to their marketplace challengers.
So why ARE return policies so critical for your business? In short:
- Customers expect access to a clear and detailed refunds and returns policy
- They give the business authority as a customer-focused establishment
- Big companies have set the stage for return policies playing into brand image
- They build consumer loyalty
Keep reading to learn more:
1. Consumers Want Return and Refund Policies
For more than half the shopping population (66 percent according to a survey by UPS), a happy shopping experience includes reviewing a clear and concise return and refund policy prior to purchase.
Furthermore, almost 90 percent of all surveyed shoppers review return and refund policies at some point during or after the sale. Not to mention, a full 15 percent abandon the purchase altogether if they can’t find or don’t understand the merchant’s return and refund policy statement.
Based on the behaviors indicated in these statistics, consumers consider the return and refund policy an integral aspect of their purchasing decision.
2. Boost Your Business’s Reputation
It’s not only consumers who benefit from a comprehensive return policy. Merchants, too, want a well-written return policy for two crucial reasons:
- It responds to the demands of both their existing and potential customers.
- It helps those consumers make the decision to buy.
A well-written return and refund statement establishes the credibility of the merchant as a consumer-focused participant in an intensely competitive market. When given a choice, consumers most often elect to buy from credible, respectful vendors.
Online Vendors Benefit the Most
For merchants selling online, a clear and comprehensive returns statement is even more critical. Online shoppers can’t touch the products before purchase and are taking a gamble that the value that they see on their computer screen will match with the level of quality they’re seeking.
Knowing they can easily return the item if it doesn’t match their expectations can be a huge factor in their selection of merchants from whom to buy. Online sales are projected to continue to grow, and merchants who intend to compete in that space should ensure their return and refund policies are clearly displayed for potential customers to see.
3. Top Companies Use Return Policies to Build Their Brand
In response to these realities, top-tier merchants have embraced the possibility of product returns and use them as an advantage in their marketing efforts.
These companies emphasize the ease and clarity of the returns and refunds early in the shopping experience and as clearly and transparently as possible. By doing so, these companies underscore:
- Consumer confidence in their brand
- The high value they place on their customer’s satisfaction
Each factor plays a critical role in the company’s overall success, and smaller merchants can learn from their practices.
The Almighty Amazon
All by itself, Amazon was responsible for $147 billion of 2016’s online sales, which accounted for 27.4 percent of the total retail market’s annual growth.
Not only is it an online giant in its own right, but its many affiliate programs and third-party vendor services dictate the need for policies that affect both buyers and sellers.
The company’s comprehensive return policies helped to deliver its impressive online sales: consumers know before they buy that items shipped from Amazon.com – the store’s proprietary site – are returnable within 30 days of receipt of the shipment (in most cases). These details are explicit in the company’s return policy and advertised throughout the website.
Companies that ship through Amazon are also expected to be consumer-focused with their return policies. If YOU sell goods through Amazon.com, pay close attention to how your returns and refunds will be affected by their practices and expectations.
As of October 2, 2017, Amazon overrode the return policies third-party sellers and now mandates that all such merchants automatically accept all product returns.
To ease the process, customers need only to follow a three-step process:
- Go to the Amazon returns page
- Find the seller’s information
- Print out the pre-paid return label
Sellers who market their wares on Amazon’s site must have a return address on file and agree to make a full refund for the returned goods within two days after receiving them.
Walmart and Best Buy – Branding through Returns Policies
- Walmart reserves its right to limit or decline returns with or without a receipt. Further, the company will assist a disgruntled consumer if its third-party, marketplace (Walmart.com) seller balks at accepting returned goods.
- Within 15 days of receipt of a returned, “non-activated” product, Best Buy will replace or repair, or accept the return of goods that do not satisfy its customers.
These details are probably not new to you. Best Buy and Walmart are examples of companies which have mastered the art of incorporating their return and refund policies into their brand image.
Even though their policies are arguably stricter than many other retailers, their success in clearly outlining and displaying the details of their policies put customer minds at ease and play a big role in their marketing.
While Amazon, Walmart, and Best Buy have uniquely different perspectives on how returns will be managed, their policy statements clearly inform both their customers and third-party vendors about those facts, lending to their marketplace success.
4. Honoring Customer Preference Builds Brand Loyalty
Successful vendors prominently display the full statement of all their return and refund policies and ensure that those are written as clearly as possible to fully inform any consumer about how they can manage the return and refund process.
The effort to improve the customer’s experience in all aspects of their engagement – including the process by which they return unwanted goods – results in improved customer satisfaction.
In response, consumers reward these merchants by repeatedly shopping at their stores, both in their community and online.
Plus, considering that it costs five times as much to create a new customer as it does to retain an existing one, companies reduce the cumulative cost of returns and increase their customer retention numbers by providing a clear and convenient return policy for their customers.
Given the intense competition in today’s global marketplace, merchants of any size enterprise can attract and retain customers by clearly crafting and displaying their return and refund policies and processes.
If you need help putting a comprehensive policy together or polishing up your existing one, browse our library of returns and refunds policy templates, or get professional assistance from start to finish using our refund and return policy generator.