One of the best ways to secure your customers' interests is through the return and refund policy. When your return and refunds policy is buyer friendly, buyers will be loyal to you as they will have a sense of security that binds them to you.
Few customers will maintain a relationship with a brand that isn't committed to their satisfaction. The biggest question potential buyers have is what you would do if they do not like what they have bought from you and oftentimes, the response you have to this question will determine if they buy from you or not.
A return policy is how a retailer would respond if a buyer is not satisfied with a product and wants to return it while refund policy is the retailer's response to a money-back request. Observations have shown that when a product has clear and buyer-centric return and refund policy, it will sell better than similar options that have no such policy.
Return and refund policy is a retailer's way of saying, we will only be paid for meeting your need and not merely for existing. It is best for business sellers to have return and refund policies and to ensure that such policies are readily available to actual and potential buyers.
A return and refund policy must be stated in clear and unambiguous terms. As it were, most buyers would never return an item but it is safer for retailers to be prepared for such instances than to not make provisions for return and refund and actually need it.
When to use "no returns" or "no refund" policy
Having a return and refund policy is critical to customer satisfaction for most business sellers. Yet, there are times when this is not only unnecessary, it is unexpected.
No return policy particularly applies to digital products that have no tangible equivalent which can be returned in the first place. While it is possible to return an over-sized coat and request for a refund, it is difficult to do the same for an application on Google Play or similar services. There are therefore instances where a business outfit would have a 'no return' and 'no refund' policy.
The no return and no refund policy also applies majorly to anything that involves subscriptions. Most of such policies are usually conspicuous and clearly stated. In cases where subscriptions are canceled, it is often stated that there would be no refund for previous subscriptions.
It is wrong to have a no return and no refund policy under these circumstances:
- When the policy stands regardless of any situation
- When the policy is enforced on sales item
- Refunds on clothing items that haven't been worn
- Making exchanges, repairs and giving credit notes or vouchers when request for refunding has been made
As it were, no return and no refund policy isn't a way for organizations to escape customer responsibility. Rather, it applies to such situations where customer satisfaction is highly subjective and difficult to measure.
It is also important to know that no return and no refund policy applies to buyers when they simply change their minds about wanting an item and there is no defect whatsoever to the item or service rendered.
Differences between physical and digital refunds
There are many ways by which physical refunds differ from digital refunds but both are in respect to the nature of item purchased.
For example, if a physical product such as a pair of shoes is purchased from a physical retail store, it is a physical good and there can be physical refund if any condition for refund is met. However, if the good is digital like an eBook or electronic game, any refund to be done for such good is digital.
The major difference between a physical refund and digital refund is in their practicability. The process of getting a physical refund is by lodging a complaint and when the complaint is evaluated and proved to be void of fraudulent intent, it is attended to according to consumer protection laws.
For digital refund, it isn't so simple. When you take such service as a subscription package, it becomes difficult to ask for a refund of the service that you already enjoyed. The best that can happen is that you will cancel your subscription. However, some major virtual retail outlets are becoming flexible in attending to refund requests from their customers and there is hope that in the not-so-distant future, the gap between physical and digital refunds will be bridged.
Refunds for subscription services
Subscription services are the most difficult services in which you can submit a request for refunds. For most organizations, when you want to terminate subscription services, you are merely required to request for cancellation. However, there is usually non-refundable agreement attached to their terms and conditions except the laws of your area make allowances for such refunds.
So, the most important things to know when it comes to refunds for subscription services are the laws governing subscription services in the land and the company policy regarding subscription services.
However, if you find yourself in a situation where the law allows for refunds but company policy is against it, then the law overrides company services and you can get refunds for your subscription services.
Best practices for return and refund policies to 2x or 3x your sales
Don't hide it, make it easy to find
You are as visible as your return and refund policies. If you think this way, you will understand why people shouldn't go through hell or high water to find your return policy. Keep such information in the open where people dealing with you can know what exactly they are getting into.
It may sound like you are putting the odds against you but when you consider the downs of shadiness; you will know that nothing kills a business faster than ambiguity and obscurity. Show your customers your loyalty to them by letting them know how you plan to have their back should things go south.
Don't copy and paste from a different site
Plagiarizing is expressly forbidden if you want to create return and refund policy that will work. Many retailers copy and paste return and refund policies from other websites because they believe people hardly read them but the thing about such act is that when someone who needs it does, your shame will be out for the world to see.
You need to connect with your customers deeply and personally and there is no more honorable way to do that than to clearly lay out your plans for them when you do not meet their expectations.
Use easy to understand language
Many businesses have their return and refund policies out there in the open but the policies are almost useless as they do not communicate at all. Why should you speak in the kind of language that could never have earned you a customer when it is time to attend to their dissatisfaction? It shows that you only care about making your sales and not about their satisfaction.
Show them that you care by drawing up return and refund policies that speak clearly to them and that they can easily articulate. At the end of the day, it will be of immense benefit to your business.
Set expectations for customers
Nothing works better for a business than securing its current market share while expanding the same market share. The easiest way to gain your customers' loyalty is by appealing to their emotions and you can only do this successfully when you show them you care about their satisfaction. How better can you show them this than by having a care cut layout on steps they should take if they have any complaints about your products and services? Set expectations for them, let them see that you have their interest at heart through your return and refund policy.
Often times, you will not be there to attend to your customers directly, your employees will do that for you. How then do you clearly communicate the regard you have for every one of your clients except through these employees?
The responsibility is on you to educate your staff on the importance of the company's return and refund policy and the attitude they should have towards anyone activating such policy. Your staff are your ambassadors and if they represent you excellently, your customers will be satisfied and your establishment, better off for it.
Be prepared to go an extra mile
Be customer-centric. Even when the customer has made a mistake and you are not liable to make any refund, be nice still to him/her.
However, in such situations where you are responsible for a mistake, bear the responsibility and act fast. Don't drag the matter until the customer is tired of dealing with you, such action will eliminate potential referral links from such a customer and generate negative reports about you. Instead, be willing to go the extra mile for your dissatisfied customers.
10 great return and refund policy examples
BlueHost offers a very simple 30-day money-back guarantee for their digital services. It's very flexible by not charge their clients for more than what they have used or some of the non-refundable items such as domain names.
PlayStation has a very straight forward and short refund policy with just a couple of conditions that are typical for digital service providers.
Items from Athleta can be returned anytime and this includes returning of fairly used items. It also has a give-it-a-workout guarantee for its performance wears and if the standard doesn't quite satisfy you, you can request a refund.
Macy's has a steady plan in place to ensure customer satisfaction. You can easily return products here and return gift items at any time to their store. Even without a receipt, you can still get a credit.
JCPenny retail outlet gives full a refund at any time on any of its items. You can also get this refund without receipts. It also has flexible rule on items like furniture, jewelry and electronics. In a way, customers have the freedom to get a refund whenever they request it.
Norton offers a rather confusing refund policy that doesn't explain much of anything. While they don't confuse their clients with legal terms they don't really offer any clear explanation of how their refund policy works. Instead, clients have to call in to find out more details, not knowing if there are any conditions that need to be met or not.
Google Play doesn't offer refunds for their digital products with just a few exceptions such as making a purchase by mistake, fraud or broken products. In other words, you may consider your purchases final as soon as you make a payment unless of course any of those conditions apply to you.
Bad Bath & Beyond make returns easy by accepting returns in the store and by mail. The coverage also involves return shipping costs. Their return policy has no time limit and purchases within a year can be returned even without any receipt.
Nordstrom has a generous return policy that has made it consistently top the list of best return and refund policies. There is absolutely no time limit on exchanges and purchases and goods without receipts can be returned fairly easily. Return shipping is free and online policy is equally generous.
With Zappos, you have a whole year to return an unused product. If you ever buy the wrong shoes online and it is from Zappos, you have nothing to worry about. They also cover payment for return shipping and prioritize your satisfaction.