10 Ways Your Return Policy Could Hurt Your Store’s Holiday Sales

4 Return Policy Mistakes That Could Hurt Your Store’s Holiday Sales

Return policy mistakes can significantly impact your store’s success, especially during the holiday season. When a shopper buys a gift from your store, it’s a chance to win over two loyal customers—the purchaser and the gift recipient.

However, a poorly crafted return policy can not only diminish holiday sales but also damage your reputation with potential customers.

According to the National Retail Federation 2017 Retail Holiday Planning Playbook, three-fourths of holiday shoppers check a store’s return policies before making a purchase. They don’t always like what they find: 22 percent of shoppers have decided not to buy something because they weren’t happy with the return policy.

Return Policy Mistakes

It’s tough enough competing with online retailers for customers during the holidays.  Make sure your store’s return policies aren’t turning shoppers off.  Here are 10 return policy mistakes not to make:

1. Your Return Policy is Too Confusing

Is your return policy full of exclusions, fine print and different rules for different types of items or methods of payment? If so, customers are more likely to put the product back on the shelf than to bother trying to understand the policy. Keep it simple. Post your return policy prominently at the point-of-sale, print it on receipts and have every salesclerk explain it to customers when they make a purchase.

How to Implement:

  • Simplify Language: Revise your return policy using straightforward language that is easy to understand. Avoid technical jargon and complex terms.
  • Consistent Messaging: Ensure that your return policy is consistently communicated across all channels – in-store signage, on receipts, online, and by customer service representatives.

4 Ways Your Return Policy Could Hurt

2. The “Return Window” is Too Small

Does the customer have two weeks to return an item, or two years? Making your return window shorter might sound like a smart move to discourage returns. In reality, it not only tends to discourage customers from buying in the first place, but also makes customers who do buy something more likely to return it, says a study reported in The Washington Post.

The study analyzed 21 different studies of retail returns policies and found that the longer the return window, the less likely customers are to ever return the purchase.

Sounds counterintuitive, but just as a limited-time sale gets customers to hurry into your store, a very limited return window can get them to hurry and ask for their money back before it’s too late.

Keep in mind, too, that holiday shoppers are buying gifts to give weeks or months later. Gift recipients need enough time to make up their minds and return the product.

How to Implement:

  • Extend Return Period: Consider extending the return window, especially for holiday purchases, to give customers more time and reduce the pressure of immediate returns.
  • Holiday-Specific Policies: Implement special return policies for holiday shopping, recognizing that gifts are often purchased well in advance.

4 Ways Your Return Policy Could Hurt

3. Returning a Purchase is Inconvenient

Nearly two-thirds (64 percent) of shoppers in the National Retail Federation report say if they have trouble making a return, they would be leery about ever shopping at that store again.

During the busy holiday shopping season, shoppers who need to return something are more likely than ever to dread the task.

Make it as convenient as possible by training all your employees on how to handle returns and, when necessary, opening a separate returns line at the point-of-sale. (The day after Christmas, you may want to open more than one.)

How to Implement:

  • Staff Training: Train all employees thoroughly on the return process to ensure efficient and customer-friendly service.
  • Specialized Return Areas: During high-volume periods, such as post-holidays, consider setting up dedicated areas or counters for returns to streamline the process and reduce customer wait times.

4. You Only Offer Store Credit for a Return

More than half (55 percent) of shoppers will avoid a store with such a policy, according to the National Retail Federation report. While you should always suggest exchanging the product first, you should give customers a refund in their original method of payment.

For gift-giving time, offer customers gift receipts that gift recipients can use to get a refund for the purchase amount.

How to Implement:

  • Flexible Refund Options: Provide customers with refund options that mirror their original payment method, while still offering store credit or exchanges as alternatives.
  • Gift Receipts: Utilize gift receipts that enable gift recipients to receive store credit or exchange items without needing the original payment details.

5. High Restocking Fees

Charging high restocking fees can deter customers from making purchases, especially for gifts. High fees can be seen as punitive and might discourage customers from choosing your store for their holiday shopping.

How to Implement:

  • Evaluate Restocking Fees: Consider lowering or waiving restocking fees during the holiday season.
  • Clear Communication: Ensure customers are aware of any restocking fees at the time of purchase to avoid surprises.

6. Online vs. In-Store Return Discrepancies

Having different return policies for online and in-store purchases can create confusion and frustration. Customers expect consistency, and discrepancies can lead to negative experiences and lost sales.

How to Implement:

  • Harmonize Policies: Align online and in-store return policies as closely as possible.
  • Inform Customers: Clearly communicate any differences at the point of sale and on your website.

7. Lack of Transparency in Return Policies

If your return policy is hidden or not easily accessible, customers may feel uncertain and choose not to purchase. Transparency builds trust, especially during the critical holiday shopping season.

How to Implement:

  • Accessibility: Ensure your return policy is easily accessible both in-store and online.
  • Simplicity: Avoid complex legal jargon; use clear, straightforward language.

8. No Provision for Gift Returns

During the holidays, many purchases are gifts. If your policy does not accommodate gift returns or exchanges without receipts, it could deter gift buyers.

How to Implement:

  • Gift Receipts: Offer gift receipts that allow recipients to make exchanges or returns without revealing the price.
  • Special Holiday Policy: Consider a more flexible return policy for items purchased as gifts.

9. Inflexible Return Methods

If you only allow returns in-store or through a complicated online process, you risk alienating customers who prefer different return methods.

How to Implement:

  • Multiple Return Options: Provide various return methods, including in-store, mail, and online returns.
  • Convenient Process: Streamline the return process to be as hassle-free as possible.

10. Impact of Negative Word-of-Mouth

Poor experiences with return policies can lead to negative word-of-mouth, significantly impacting your store’s reputation and customer trust.

Strategies for Positive Return Experiences

  • Training Staff: Ensure staff are well-trained to handle returns efficiently and empathetically.
  • Customer Feedback: Use customer feedback to continually improve the return process.

By implementing these strategies, your store can create a more positive and customer-friendly return experience, especially during the critical holiday shopping season. This approach not only enhances customer satisfaction but also encourages repeat business and builds a loyal customer base.

4 Ways Your Return Policy Could Hurt

The Importance of Flexibility in Returns

A customer-friendly return policy can be a game-changer for your store’s success, especially during the holiday season. While it’s tempting to focus solely on sales, a well-structured and flexible return policy can lead to long-term customer loyalty and positive word-of-mouth. Here’s why it matters:

  • Building Trust: A lenient and straightforward return policy shows that you trust your customers and prioritize their satisfaction over immediate profits. When shoppers know they can easily return or exchange a product if it doesn’t meet their expectations, they’re more likely to feel confident about their purchases.
  • Gift-Giving Confidence: During the holidays, people often buy gifts for their loved ones. A gift recipient might want to exchange an item for something they truly want or need. A customer-friendly return policy eliminates stress and uncertainty for both gift buyers and recipients, enhancing the overall shopping experience.
  • Reducing Buyer’s Remorse: Buyers sometimes make impulse purchases during the holiday rush and later regret their decisions. A return policy that allows for hassle-free returns can ease buyer’s remorse and encourage customers to shop without the fear of being stuck with an unwanted item.
  • Long-Term Engagement: A positive return experience can turn a hesitant first-time shopper into a loyal customer. By treating returns as opportunities to create positive interactions, you can establish a reputation for excellent customer service, which leads to repeat business.
  • Competitive Advantage: In an era of online shopping dominance, physical stores can stand out by offering a return policy that’s as convenient as their digital counterparts. This can draw more customers to your store and help you compete effectively.
Building TrustA lenient and straightforward return policy demonstrates trust in customers, prioritizing their satisfaction over immediate profits. It fosters confidence in making purchases.
Gift-Giving ConfidenceDuring holidays, a customer-friendly return policy alleviates stress for both gift buyers and recipients. It allows recipients to exchange items for what they truly want.
Reducing Buyer's RemorseA return policy that facilitates hassle-free returns minimizes buyer's remorse, encouraging customers to shop without fearing they'll be stuck with unwanted items.
Long-Term EngagementPositive return experiences transform tentative first-time shoppers into loyal customers. Treating returns positively establishes a reputation for excellent customer service.
Competitive AdvantageOffering a convenient return policy distinguishes physical stores from online retailers, attracting more customers and allowing effective competition in the digital age.

In crafting your return policy, consider striking a balance between customer satisfaction and business sustainability. While it’s essential to protect your store against abuse, focusing on customer needs and convenience can be a strategic advantage that sets your store apart.

Remember, in the long run, the loyalty you gain from satisfied customers will likely outweigh any short-term losses from returns.

By implementing customer-centric strategies, you can create a positive shopping experience that encourages repeat business and enhances your store’s reputation.

4 Ways Your Return Policy Could Hurt

Frequently Asked Questions (FAQs)

Why is a poor return policy detrimental to my store’s holiday sales and reputation?

When shoppers buy gifts from your store, both the purchaser and the recipient become potential loyal customers. However, an unfavorable return policy can hinder this loyalty and impact your holiday sales. It can also tarnish your store’s reputation with potential customers who consider return policies important.

How significant are return policies to holiday shoppers?

According to the National Retail Federation’s 2017 Retail Holiday Planning Playbook, three-fourths of holiday shoppers examine a store’s return policies before purchasing. 22 percent of shoppers have decided against buying due to unsatisfactory return policies.

What are some return policy mistakes to avoid during the holiday season?

To prevent turning shoppers away, avoid the following return policy mistakes:

  • Making the policy confusing with exclusions and fine print.
  • Setting an excessively short “return window.”
  • Creating inconvenience for customers returning purchases.
  • Providing only store credit for returns, dissuading customers.

Why is a simple and clear return policy essential?

A complicated return policy, filled with fine print and various rules, can discourage customers from understanding and engaging with it. To enhance customer satisfaction, make the policy straightforward, display it prominently, and ensure sales staff can explain it.

Why should I consider a longer return window despite initial reluctance?

Surprisingly, studies show that a longer return window often leads to fewer returns. While it might seem counterintuitive, a short return window can cause rushed returns. Additionally, for holiday shoppers who buy gifts ahead of time, a longer window provides recipients ample time to make decisions.

How does inconvenience impact returns and store perception?

Approximately 64 percent of shoppers, according to the National Retail Federation, are wary of stores with inconvenient return processes. Especially during the busy holiday season, making returns convenient by training staff and potentially establishing separate return lines can be crucial for retaining customers.

What’s the impact of offering only store credit for returns?

Reports indicate that 55 percent of shoppers would avoid a store with this policy. While suggesting exchanges is reasonable, it’s also important to offer refunds in the original payment method. During the holidays, providing gift receipts allows recipients to receive refunds, ensuring satisfaction.

Why is a flexible return policy important for customer loyalty?

A customer-friendly return policy can have a profound impact on your store’s success, particularly during the holiday season. It fosters trust, instills confidence in gift-giving, reduces buyer’s remorse, and encourages long-term customer engagement. Additionally, it offers a competitive edge against online retailers.

How does a customer-friendly return policy build trust?

By prioritizing customer satisfaction over immediate profits, a lenient and clear return policy demonstrates trust in your customers. Shoppers feel assured they can return or exchange items that don’t meet their expectations, fostering positive sentiments.

How does a flexible return policy benefit gift-giving during the holidays?

Holidays often involve gift-giving, and recipients might want to exchange items for something they truly want. A customer-friendly return policy alleviates stress for both gift buyers and recipients, enhancing the overall holiday shopping experience.

How can a return policy reduce buyer’s remorse?

During holiday rushes, impulse purchases can lead to regret. A return policy that allows easy returns minimizes buyer’s remorse and encourages customers to shop without fearing they’re stuck with unwanted items.

How does a positive return experience contribute to long-term customer engagement?

A pleasant return experience can transform a tentative first-time shopper into a loyal customer. By viewing returns as opportunities for positive interactions, you establish a reputation for excellent customer service, encouraging repeat business.

How can a return policy offer a competitive advantage?

Amidst the dominance of online shopping, a physical store with a convenient return policy stands out. By offering a return experience as seamless as digital counterparts, you can attract more customers and remain competitive.

How can I strike a balance between customer satisfaction and business sustainability in my return policy?

While guarding against potential misuse is important, prioritize customer needs and convenience. This strategic approach sets your store apart and fosters long-term loyalty, outweighing short-term losses from returns.

Unhappy Shopper Photo via Shutterstock

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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.