How to Create a Return and Refund Policy for E-Commerce?

Time to read: 5 minutes

A return and refund policy is crucial for e-commerce stores. If it’s simple and effective, customers are much more likely to remain loyal and prefer your store over the competition. On the other hand, if it’s too complicated, incomprehensible for an average user, and inconvenient, it might discourage potential customers. In this article, we look at the art of writing a good returns policy. We invite you to read on!

How to Write a Returns Policy for Your E-Commerce Store? 4 Steps

Let’s get into the process of writing a return and refund policy for your e-commerce store—a template on how to proceed with this process. What are the steps you need to take?

1. Determine the Return Period

You should start with the basics—the length of the return period. In the US, there is no federal law regarding the limit, but you might find legal regulations in other countries. For instance, if you sell your products in the EU, you are obliged to enable product returns for at least 14 days after the purchase.

Naturally, you might also opt for longer return periods. Providing clients with more time may positively affect their experience and trust in your brand. It is a common practice to offer 30-days-long (after delivery) return periods—this is what you’ll find in the returns policies of the industry giants, such as Amazon.

2. Returns Costs

While most consumers expect returns to be free, this is not an obligation for e-commerce stores. Managing returns can be a heavy burden on operational costs, especially if you sell products that are more likely to be returned, e.g., clothing. Thus, you should decide who should pay for each return—you or the client?

You can also cut down the costs of returns by optimizing logistics. For instance, you may work with a fulfillment company that provides pick-up/drop-off points—the courier collects the goods while delivering other items. Thus, we believe that the best solution is to optimize your returns management and offer free returns, though the choice is up to you and might depend on the circumstances.

3. Make an Exception List

While allowing for returns is important, this should not be a standard for all products. Those that are customized uniquely to a given customer’s needs, are hygiene-sensitive, or may have short shelf-life are usually exempt from e-commerce returns policies. You need to define which products in your offer match such criteria and list them in your documentation.

4. Plan the Refunds

Your return policy should also define the type of refunds you plan to offer. Some stores opt for bank transfers, others for discount codes, and some for shop credit. Here, you should consider several factors:

user experience—how convenient and easy to use will your option be,
efficiency—how easily can you implement and carry out the returns with your method,
industry preferences—which method might be preferred and/or better in your particular industry.

For instance, bank transfers might be great from your customers’ POV if you sell clothes—they will likely purchase several sizes of the same piece of clothing, try them out, and return those that do not fit. On the other hand, store credit builds loyalty and might still be great here—customers will just need to change their habits from purchasing several sizes at once to doing so gradually.

Making a Perfect E-Commerce Returns Policy: Our Tips

Having discussed the steps you need to take, let’s look at this a bit more closely. What are the general good practices when it comes to return and refund policies? Should you watch out for anything in particular? Here are our top tips.

Make it simple and uncomplicated—your customers want to understand the returns policy; if it’s too complicated, they might feel discouraged and choose a different store.
Put a prepaid return label in the box—this will make it much easier for customers to return products, enhancing their experience.
Track your returns data—you can use this information to estimate returns volumes and adjust your logistics accordingly.
Include a template with all the steps in your returns policy—with a short step-by-step list, it will be easier for your customers to understand what they have to do and what to expect.

The Takeaway

A good return and refund policy may be the make or break of your business. But you don’t have to worry about it now since you know how to create it. Remember to check out Bytestand FreshCredit and follow the best practices we provide, and you’ll soon turn your returns policy into a competitive advantage!

You might also read: How to Manage Product Returns More Efficiently with Bytestand FreshCredit?

About the author

ByteStand

is powed by savvy Amazon industry vets who have been passionate about eCommerce for a decade each. We’ve worked with over 2,600+ brands, generating hundreds of millions of orders shipped through Amazon FBA/MCF program using the ByteStand app.