Offering refunds is a great business strategy, as it gives more options to the customers buying a certain product knowing that there's a safety net, being able to get their money back. Unfortunately, there are plenty of those who want to abuse this system, which leads to many problems for the business owners. This is primarily why strict and well written refund policies serve to protect the business from financial losses and customer abuse.

Let's go through 5 different completely eligible ways to politely decline refunds to customers.

1. Define clauses in the refund policy

Creating an incredibly detailed refund policy is the number one priority for any type of business, whether you run an online eCommerce website, brick a mortar store, or offer any type of services for sale.

It needs to include all the scenarios related to the refund process. Defining all of the rules in this document is going to keep your business safe from refund abuse, which tends to occur more often especially when the number of customers increases.

For example, it's a good idea is to define the refund period before anything else. If you make it last up to 7 days or 14 days, you can easily decline those who are trying to refund an item that has passed that deadline, completely legally and without hurting your business image.

A well written refund policy will keep you protected from many possible scenarios customers may attempt to abuse. As time goes by, feel free to analyze how and why people are returning items and update your refund policy accordingly if necessary to keep your business safe from possible abuse.

2. Final sale or non-refundable items

Final sale products

If you want to sell a particular type of merchandise without dealing with any kind of refunds, it is best to mark the items as a final sale.

When you take this step, people purchasing the goods automatically agree to your terms, knowing that they cannot get a refund on this particular merchandise.

This is usually performed when businesses are doing a clearance sale for past season or out of style items. Of course, you can pick any other items to mark as final sale items depending on your business.

The best way to approach this task is to see where your refund losses are the highest. Put that merchandise on final sale and avoid selling it in the future, as it does more harm than good to your business.

Customer expectations are high, therefore, always try to acquire merchandise that is less likely to be refunded as it will make your business much better.

3. Damaged goods

Broken or damaged products

This should be clearly stated in your refund policy. Any damaged item is automatically non-refundable. Not including this in your refund policy can cause high costs for your business in the long run.

For example, if you specify in the refund policy that items can be returned within 7 days, without including details that damaged goods are not going to be accepted, a customer is eligible to ask for a refund.

Therefore, it is crucial that your refund policy also includes details on damaged merchandise. It will allow you to politely decline refunds to customers and prevent any possible abuse your business might face.

4. Perishable goods

Perishable goods

Every single type of merchandise that is perishable must have an expiration date. Besides including the above mentioned clauses in your return policy, it is necessary to also include information about warranties or expiration dates.

This means that the refund policy should include the fact that, once the warranty or another specified expiration date has passed, you are no longer eligible to refund an item.

Usually, including this in your refund policy is necessary for merchandise such as food, or any other type of items that have a shorter expiration date. If your policy states that a person can return an item 2 weeks after the purchase, yet in the meantime the product expires, you still have to refund the item, thus creating a loss for your business.

However, if you include a clause that once the product expires, you do not accept refunds, these types of situations will never occur, and if they do, you will be completely eligible to refuse the refund request.

5. Discontinued merchandise

Discontinued merchandise

Many business owners tend to forget that, at some point in time, they are likely to sell discontinued merchandise. If this scenario is not included in the refund policy, businesses can lose profits.

If a discontinued item is returned due to damage, it may put the business in a pretty bad position as it is impossible to contact the manufacturer and have the item replaced.

To prevent these scenarios from occurring, it is necessary to add a clause that makes discontinued items non-refundable. Including this clause will keep you safe if some of your merchandise becomes discontinued by the manufacturer. You will be eligible to decline the refund requests.

An alternative approach is to always mark these items as final sale, but that usually includes lowering the price. So, a better option is to simply include a clause in your refund policy and keep your business protected from financial losses.

Offering refunds is a very good business practice as companies that accept returns from their customers are likely to sell more merchandise. The logic to this is simple – customers feel safer buying knowing they can return the product and as a result you get more sales.

Therefore, from the moment you start your business consider offering some type of refunds and don't stick with a standoffish "no refunds ever" policy.

The return and refund policy does not only serve to protect your business, it should also provide benefits for your customer. Keep the refund policy rules reasonable to ensure a higher number of sales.

It is more important to create a return and refund policy that gives you control over the whole process. Make sure to include all of the above mentioned scenarios in the policy, as it is going to keep you safe from any type of abuse, while also ensuring positive sales profits.