What are Return and Refund Policies?

A Return & Refund Policy is a policy that dictates under what conditions customers can return products they've purchased from your ecommerce store and whether you'll reimburse them or not. It will also let your customers know the time frame within which your company can accept returns.

Why are Return and Refund Policies Important?

Return and Refund Policies for ecommerce stores have been proven to increase the number of people who end up making a purchase once they're on your website.

People are often hesitant to buy online, which can lead to low conversion rates and sales. Having this policy helps alleviate some of that hesitation since they know they can return the product and get a refund if their expectations aren't met while making a not-in-person purchase.

In addition, having a Return and Refund Policy in place can help reduce your expenses when it comes to return deliveries. For instance, consider the fact that in the United States alone, Statista's most up-to-date statistics show that return deliveries cost businesses $550 Billion between 2016 and 2020.

That's a 75.2% increase over five years ago.

Of course, customers may be unhappy with their order for many reasons. It might arrive damaged, it was the wrong size or it didn't meet all their expectations. They may request a refund or a replacement.

These requests can be overwhelming without a system to handle them. Think of all the time necessary to handle customer service emails and the money your company may have to spend to replace the returned product. Now think about those expenses just after Black Friday or Christmas!

Thankfully, the solution is relatively simple. You can make returns and exchanges less of a problem by writing and posting a solid Return and Refund Policy for your website. Moreover, you can help increase customer loyalty and potentially generate new revenue by doing so.