Returns are an inevitable part of any eCommerce store’s activity, but a well-designed Shopify return policy can help you minimize their effects on the bottom line and keep customers happy.
We’ve gathered the best tips for creating a returns policy that aligns with your business goals, contributes to positive customer experiences, and keeps you compliant with legal requirements.
In this article, you will learn what a returns policy is, the importance of a customer-centric return policy, the key elements you should include, and tips for writing an effective return policy.
What is a Returns Policy?
A returns policy helps you establish the rules and conditions under which your customers can return or exchange products they have purchased from your online store. Your Shopify returns policy helps create an effective return process for unwanted or defective items.
As long as you comply with the legal requirements, you are free to design your eCommerce returns policy that fits your business model, ensures positive customer experiences, and
reduces the company’s hassle and costs. Some key elements of a return policy are return instructions and requirements, reasons for returns, exceptions, types of returns, and time frames.
While technological development continues to improve the online shopping experience, eCommerce stores have higher return rates than brick-and-mortar stores, as customers can only evaluate the ordered items after they open the package.
For this reason, the return policy is a critical decision factor for online shoppers. In fact, research shows that 75% of customers consider easy returns essential in their purchase decision, and 86% of respondents say free returns increase their brand loyalty.
Why Do You Need a Return Policy?
Before finding how to make a return policy on Shopify, every store owner should understand the importance of building a return policy that fits their business and finding the balance between keeping customers happy and revenue high despite inevitable returns.
An unclear or poor eCommerce return policy can lead to piling customer complaints for the customer support team. Customers’ hassle and dissatisfaction transform into negative word-of-mouth that spreads online. All of these lead to a decrease in purchases made by new and existing customers, harming the business’s bottom line in the long term.
With a customer-centric approach in mind, Shopify merchants can create transparent and flexible returns policies to help them differentiate from competitors with similar offers, and show potential and existing customers they are trustworthy. As a result, they generate higher repeat purchase rates, and maintain longer, happier relationships.
Here are some of the main reasons your Shopify store needs and will benefit from a well-designed return policy:
Build customer trust
New and repeat customers trust eCommerce businesses that are straightforward about their return policy, with an easy and user-friendly returns process that meets their expectations.
Potential customers are generally hesitant about purchasing from a new brand, so if they can’t quickly return and refund policies, they will simply go to another store. Existing customers that find the store policies too complicated or are unhappy about the return experience are more likely to avoid purchasing from you again.
To build customer trust and ensure customer satisfaction, people should quickly find the return policy on your website, in the footer, and key sections such as product pages or other web pages where customers could search for return information.
Having a clear and easy-to-understand Shopify returns policy shows that you care about your customers and are ready to handle the process professionally and responsibly. When customers know that you ensure easy returns if one or more items don’t meet their expectations, they are more likely to purchase from your store.
A short-term profit loss on a purchase return can be a small price for the long-term benefits of a positive customer experience, which results in better retention rates and sustainable revenue growth. To improve your return process, learn what your customers expect and highlight the benefits, such as free returns or pre-printed return shipping labels.
Set clear expectations
A detailed return policy helps you set clear expectations from the start and keeps the customers informed about how the return process works. Your customers can make an informed decision about their purchases by knowing what items qualify for returns, the exceptions to the general returns rules, or how much it takes to process a return.
Clear guidelines and store policies are a proactive approach to solving problems. They help you avoid confusion and disappointment that customers might experience, and create a positive post-purchase experience when returning products.
Prevent fraudulent returns
A comprehensive return policy can help your eCommerce store discourage online shoppers from fraudulently attempting to return items to obtain a refund. Help your team identify suspect online shopping behavior, reject fraudulent returns, and process only legitimate returns.
To discourage abuse and misuse of your return policy, set clear conditions under which you accept a return, specify the required documentation, and the fees you might apply. Return management Shopify apps usually include functionalities that automatically detect suspicious return requests and are great for improving the entire process.
Save valuable resources
A visible Shopify returns policy on your site saves valuable resources for your team and helps avoid customer frustration caused by long customer service response time.
Make a list of FAQs about returns and add the answers to your return policy to reduce the volume of unnecessary tickets and customer support overload and gain more time to address urgent issues.
A customer-centric return policy helps reduce expenses associated with returns and refunds, encourage exchange options or store credit instead of a full refund, and keep customer satisfaction high while managing returns.
What to Include in a Return Policy
When writing a comprehensive and generous return policy, you should balance customer expectations and the company’s need to implement an effective strategy for managing returns.
Let’s look at the must-have elements that allow you to create a Shopify returns policy that is suitable for your eCommerce store, compliant with the legal requirements, and convenient for your customers.
Reasons for Returns
While you want to create a generous return policy that keeps customer satisfaction levels high and increases brand loyalty, you also want to encourage proper use of your return and refund policy to keep return ratios under control and prevent fraud.
To find out how to add a return policy on Shopify that helps you balance keeping customers happy and maintaining profitability, you need to understand why your customers are returning products and identify the root cause.
Here’s a list of reasons for returns that eCommerce stores generally accept:
- The product is damaged or nonfunctional;
- The original packaging is damaged;
- The product is missing parts or accessories;
- The product’s performance or quality is below expectations;
- The product doesn’t match the description on the website;
- The customer bought or received the wrong item;
- The delivery date was delayed;
- The purchase was unauthorized or fraudulent;
- The merchant sent the package to the incorrect shipping address.
Tracking and analyzing reasons in your Shopify admin or returns portal helps you optimize returns management, adjust the eCommerce return policy, and identify potential improvements for business operations.
What Type of Items Cannot Be Returned
To prevent misunderstandings and disagreements, you should explicitly mention the reasons why a return is rejected and that you inspect each returned item to see if it qualifies for a refund.
Here are some examples of items that cannot be returned:
- Final sale items;
- Customized or personalized items;
- Perishable products;
- Limited-edition items;
- The item that is returned damaged due to the customer’s action;
- Items with visible signs of use;
- Items without proof of purchase;
- Items without tags, manufacturer’s tags, or original packaging.
You can avoid unpleasant situations caused by refusing a return if you detail each reason why you refuse a return. When you inform the customer of the refusal to make a return, it is recommended to refer to the return and refund policy.
Return Instructions & Requirements
Explain the steps your customers must follow to initiate and complete a return request. Include the required documentation, time limits for customer returns, and any specific conditions under which you accept an item for return.
Here are some examples of requirements you might include:
- The customer must provide a valid purchase receipt;
- The item must be returned with the original packaging;
- The item must have the original tags;
- The customer must provide an authorization number;
- The customer must specify the return shipping address;
- The customer must send photos that show the product’s condition;
Help your customers understand what is expected of them by writing clear return instructions and requirements that ensures a smooth returns process and a positive post-purchase experience.
Time Frame for Returns
Before going to checkout and completing a purchase, customers want to know how long they have to return a product. The time frame should be included in the store’s return policy and communicated to customers pre and post-purchase, including it in the order confirmation email.
Provide customers with a clear and reasonable timeframe for returns to encourage purchases and ensure an efficient return process. Standard timeframes applied by eCommerce stores typically range from 14 to 30 days from the delivery date. Some stores offer longer timeframes for certain items, or around the holiday seasons.
Type of Return Offered
When customers request a return, they typically expect a full refund. This is particularly true for those unsatisfied with the product they received and simply want their money back. In this case, you sent the refund to the original payment method, such as a debit or credit card.
However, other customers may be open to alternatives like exchanges, store credit, or gift cards. These options help you minimize the financial impact of returns on profits and speed up the return process while maintaining customer satisfaction. Include exchanges, store credit, or gift cards in your return policy to keep customers aware of these convenient alternatives.
To make the returns process easy and convenient, you can enable a self-service returns portal that allows customers to choose their preferred refund method. The self-service portal feature can be added to your store using one of the top Shopify apps for returns management.
If you are just starting and don’t have much experience creating return policies, you could use a return policy template or a policy generator. Both tools can be a good starting point, but you will want to adjust the policy, align it with your business goals and customer expectations, and comply with legal requirements.
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What To Consider When Creating Your Own Return Policy for Your Shopify Store
Your return policy is one of the decisive criteria online shoppers use when considering buying from an eCommerce business. Here are some tips that help you create a comprehensive return policy that highlights the customer benefits and helps people easily find the information they need.
Keep It Simple
When writing a return policy, it’s important to use simple language and avoid technical terms to ensure that customers can easily understand and follow the process. A well-structured text helps your customers quickly find the information they’re looking for. Include a simple description of the steps they need to take to complete a return request.
Make It Easy To Find
Displaying a link to the return policy on as many key web pages as possible shows that you are a transparent, trustworthy online store. Placing a link to the return policy in the website’s footer means that your customers can access it wherever they are on your website. Including a link in the shopping cart or checkout page helps your customer make an informed decision. Displaying a link to the return policy on product pages is useful when customers have questions about the returnability of a specific item.
Outline What They Can Expect
A clear return policy contributes to building relationships on a healthy foundation. Set clear expectations by outlining what items qualify for returns, exceptions to the policy, and the time frame for processing returns. Include all the details a customer needs to maintain positive experiences, trust, and loyalty.
Consider Offering Free Returns
Return requests aren’t pleasant for the customer or your teams, but offering free returns can improve customer satisfaction with the overall shopping experience. While you might perceive free returns as costly, you should also consider the long-term benefits, such as increased sales and retention rates.
Your Shopify returns policy plays an essential role in providing a positive shopping experience for your customers. A well-crafted return policy will minimize the financial impact of returns on profits, increase customer satisfaction, and build strong relationships with your customers.
If you want a more comprehensive guide to Shopify returns and exchanges, check out the video below.
Automating Your Shopify Returns Policy
You can have a generous return policy and yet limit the financial impact of returns. Once you understand your customers’ expectations and find convenient alternatives for managing returns, you can write the best version of your Shopify returns policy and manage the process more effectively.
If you are wondering how to set up a return policy on Shopify that helps you implement the best practices presented in this article, you should try a dedicated returns management app that seamlessly integrates with your store.
A Shopify returns app is a tool that helps you bring your return policy to life and automate the return process. You can gain more control over returns requests by unlocking advanced features like a self-service portal, customizable emails, automated returns approvals, prepaid return labels, or automated refunds. Using a Shopify return app makes the returns process more convenient for your customers and reduces the costs associated with returns.