You’re probably guilty of it yourself: only purchasing from an online store if their refund and return policy is clear and in your favour. And you’re not alone – returns are far more prolific among orders from ecommerce stores than among brick-and-mortar ones, three times more prolific.
In this article, you’ll learn about refund policies as they pertain to your Shopify store. We’ll see why you need one, what to include, and what to remember when crafting one. We’ll also provide a refund policy template to help get you started on one for your store.
What is a Refund Policy?
A refund policy (or return policy) is a document that outlines the terms of refunds or returns for customers who have purchased products from your Shopify store. It’s a clear and exhaustive document containing information about when and under what circumstances customers are eligible for refunds. It is, in fact, a legally binding document in many locations.
Transparency is a key feature of stores with high customer loyalty – you want your customers happy to keep them coming back. Here’s what you’ll typically find in a good return policy:
- A description of products that are eligible for refunds.
- The timeframe in which customers must request a refund and the period within which you will process it.
- Whether or not shipping costs are eligible for reimbursement.
- Any requirements that customers must meet to be eligible for a refund.
- Exclusions from being refunded, such as opened or used products.
- Your contact information so customers can reach out with any refund requests.
Why Do You Need a Refund Policy?
Offering a refund policy gives customers the assurance that your ecommerce business is trustworthy and reliable. Knowing they can return items if unsatisfied, customers are more likely to take a chance on you when considering their purchase options.
It’s safe to say that some of your sales will likely be to customers who would otherwise not have bought had there been no refund policy. Indeed, Narvar reported in 2018 that 17% of shoppers surveyed would not purchase without the option to return the item. So if for no other reason, you should have a refund policy because refunds and returns are what shoppers demand.
Here are a few reasons it’s a good idea to have a Shopify return policy.
- Increased credibility of the business through transparency of your operating principles and rules.
- Improved customer relations because the customer and merchant (you) are armed with the relevant return process details.
- Better protection for the business. Because store policies (including refund and privacy policies) tend to be legally binding documents, they prevent potential legal tussles.
- Increased sales as customers are more willing to buy.
- It gives the perception of having better customer support.
What to Include in a Refund Policy
After our primer on refund policies, it’s clear they need to be comprehensive and customer-friendly. That’ll be key to ensuring a positive customer experience. Several things are important to include in the returns policy.
Reasons for Refund
Your refund policy should include an exhaustive list of why customers might be eligible for refunds. Your policy should list what you deem refundable, such as damaged products or incorrect orders. It should include non-refundable items such as opened packages, custom or personalized items, and downloadable software.
Here’s a list of reasons for refund we recommend to our retailers.
- Accidental order.
- Better price available.
- No reason was given.
- Performance or quality not adequate.
- Incompatible or not useful for the intended purpose.
- The item is damaged, but the box or envelope is undamaged.
- Missed estimated delivery date.
- Missing parts or accessories.
- The item and the box or envelope it came in are both damaged.
- The wrong item was sent.
- Item defective or doesn’t work.
- Arrived in addition to what was ordered.
- No longer needed.
- Unauthorized purchase.
- The description on the website was not accurate.
Which Items are Non-Refundable
Next, include a list of the products available in your store that are not eligible for refunds under any circumstances.
Fashion Shopify retailers should be sure to include that things like underwear are not refundable for hygiene reasons. Some customers will make a fuss about that, stating things like, “how am I supposed to try something on if it’s not refundable?” But at the end of the day, you’re protecting your business and future buyers of the returned product.
Each company will likely have unique requirements for how its customers submit and track refunds. Making the refund process clear is one of those key areas that can help you win praise from your customers. If you can arm a customer with simple, intuitive instructions for submitting their return, that customer won’t have any reason to complain.
By the way – managing refunds can be much easier for both customer and merchant if you use a returns management app. The following steps detail a typical refund procedure from the customer’s perspective:
- Submit the refund request.
- Receive confirmation of the return.
- Ship or drop off the item being returned.
- Receive an email notification of the refund, including information about how long it will take to appear on the customer’s credit card statement.
It wouldn’t be economically viable to run a business if customers could claim refunds on items they bought months or years ago. You’ll want to include details on the periods in which customers can submit refunds.
Provide information about how long customers have to return items after purchase, such as 30 days. You can also list other time frames and conditions, such as a 15-day refund window for opened packages or downloads.
Type of Refund Offered
Customers will be keen to know their options for receiving their refunds. In other words, will you offer cash refunds? Credit vouchers? Store credit? A combination?
This is not always a simple decision for business owners. Different payment methods may have different refund rules. You’ll need to figure out the best way to provide refunds cost-effectively while ensuring your customers have flexibility and choice.
Another consideration here is how quickly customers will receive their refunds. Are you able to offer real-time or near-real-time refunds? That will certainly keep your customers happy.
What to Keep in Mind When Writing a Shopify Refund Policy
Writing is not everyone’s cup of tea. Heck, we even paid someone to write this article! There are some common best practices to follow when writing your Shopify refund policy (which apply to most business writing you’ll need to do, too). You’ll need to keep it clear and concise, make the writing accessible for readers, and address questions you’re sure will come up.
Keep it Clear and Simple
We’re definitely getting lazier – the internet and social media have reduced our attention spans! As a result, humans don’t like to read vast swathes of text to find what they need.
Here are a few tips for writing in a clear, simple, and concise manner:
- Stick to short sentences and paragraphs.
- Use bullet points and numbered lists instead of long blocks of text.
- Avoid industry jargon as much as possible – particularly acronyms.
- Use active verbs that don’t require a dictionary explanation (e.g., “submit”, and “request” instead of “make an application for”).
- Include a summary at the beginning.
Make it Easily Accessible
Accessibility here refers to two things: the ease with which your content can be understood and the ease with which the actual document can be found.
Here are a few tips for keeping your refund policy accessible:
- Try to use language and sentence structures that are not overly complex or verbose.
- Avoid using words that have multiple meanings.
- Break up long sentences into shorter ones where possible.
- Provide a link to your refund policy in obvious places: in the footer of your checkout pages, the general site footer, the about section, and the customer’s order confirmation email. Shopify admin has an easy process for adding new pages and inserting them into menus.
Preempt Any Questions
Don’t wait for customers to approach you with queries. You’re the store owner, so you should already have the data about your customers’ questions! Dig into messages on your social media pages and emails and note customers’ common questions. Then, address those in the refund policy.
This will save your team time and quickly give customers the necessary answers. It’ll also make you look more organized and professional.
Refund Policy Template
Here’s a template to get started with your refund policy.
Refund Policy for [store name]
This document explains our refund policy for products purchased on [store name]. By purchasing a product from us, you agree to the terms of this policy. Please read it carefully.
We offer returns within [time frame] of purchase. All returns must be accompanied by a valid receipt.
We offer full refunds for returned products in original condition, unopened and unused within the specified time frame. Refunds will be credited back to the original payment method used for the purchase. Sometimes, we may issue a store credit or a gift card instead of a refund.
We do not offer exchanges. Customers must return the original product and place a new order if desired.
Damaged / Faulty Goods
If you receive damaged or faulty goods, please contact us at the email address provided within seven days of purchase. We’ll offer a replacement free of charge or provide a full refund.
Please contact us at [email address] to initiate a return. We’ll respond ASAP with instructions for returning your product.
–– or ––
- Head to [web address for returns portal].
- Log a return request using your email and order number.
- We’ll respond ASAP with instructions for returning the product.
Please contact us for any questions about the refund policy at [email address]. This refund policy was last updated on [date]. We reserve the right to review and update this policy from time to time.
Thank you for shopping with us; we appreciate your business.
Managing Refunds Is Easy With Rich Commerce
Implementing refunds for your Shopify store should be clearer now than before you read this post. We looked at what a refund policy is and why you need one. Then we discussed what you should absolutely include in yours. Then, we considered a few tips for writing your refund policy and even provided a template for your business.
As I said, this whole process could be entirely stress-free if you use a returns management platform like Rich Returns. Rich Returns helps you automate the refund process, saving you hours of manual labor and decreasing customer wait times.
You can even configure automated customer service emails, letting them know when their refunds have been processed. A return management system will even help you manage your return labels. Here’s why we think you should implement a returns management tool like Rich Returns.