According to a 2019 survey, 73% of customers patronized a business again because of their policy on returns and refunds.

Returns and refunds are a part and parcel of doing business. There are so many reasons a customer could be seeking a refund or return. These reasons may include wrong product delivery, subpar product quality, dissatisfaction with delivered products and much more.

Your business may not be guilty of these above-stated reasons, but to protect your business from customers who may want to take advantage of refunds, businesses must clearly craft what their refund/return policies cover.

In this post, you will understand what exactly needs to be covered in a business’s refund/return policy and how to write it.

A return/refund policy is very important, especially for online businesses. Online businesses need to build trust with customers and a return & refund policy can help you do that.

Curious about the benefits of having a refund and return policy? You can read all about that HERE.

What should be in a refund/return policy?

To write a good refund/return policy, there are some basics that must be clearly spelt out.

Here are 5 things that must be in your refund policy.

1. What kind of item can be returned? 

If you offer broad coverage of anything that can be returned, you might run your business into the ground. You must communicate clearly what kind of items can be returned. Specify if it’s only damaged or wrongly delivered products that can be returned.

For damaged products, adding an extra layer of security by stating that customers must provide images/videos of the damaged product before any steps are made to return/exchange is crucial. This will prevent scams of any kind and put you and your customer on the same page concerning what is returnable or not.

Another important thing to note is to state clearly if products purchased at a discount/sale are eligible to be returned or exchanged.

2. How long does the customer have before filing for a return/exchange?

This is an important point to highlight. Giving a specific timeline such as a 1-3 days window in which a customer can return a product will prevent situations of returning already used products.

This will save your business from issues like “I bought this from you last week and I suddenly don’t like it anymore, so I want an exchange.”

For example, Apple has a return policy of 14 days. A customer cannot file a complaint if they exceed the number of days given in the policy.

Apple is a tech product so their extended timeline for returns is understandable. For smaller businesses, managing a shorter timeframe is cost & management friendlier.

3. Who covers delivery costs? 

When an item is being exchanged/returned, your policy must clearly state who will cover the delivery cost. Most small businesses cannot absorb this cost yet, so customers who demand exchanges have to pay for delivery but at subsidized charges.

Stating clearly who pays for extra delivery on item exchange/pick up will help you write a straightforward policy.

4. How are refunds carried out?

If damaged products are returned and the customer is not interested in an exchange, you must decide how refunds work and how long it may take.

Some big stores like Nordstrom in the US offer store credit which is a system in which customers can buy something else in the store up to the amount that would have been refunded. It’s almost like creating a customer account in which they can use the amount to be refunded instead shop for other store products. If you decide to include the option of store credit, do ensure that the customer still has the option of just getting their cash back

Setting up store credit may be technical or difficult for smaller businesses, so refunding cash is an easier option. In cases of cash refunds, you want to ensure that refunds are made within 1-3 days.

5. Proof of payment

For proof of payment to be adopted in a business’s refund/return policy, then you must issue receipts to customers as a pre-requisite for returns/refunds.

Before customers’ cases of returns/refunds can be approved, then they have to present proof of payment for their case to be eligible.

How to write a refund/ return policy

• It must be presented in simple and concise English.

A refund/return policy must be written in simple English that a customer can understand. Avoid jargon or ambiguous words when writing a refund policy for your business.  

• Present it as an image or short document that is easily accessible.

If your customers are going to read your return policy or find it on your page, then you have to make it easy to find. Either by pinning posts on the return policy to your profile or sharing it before a purchase is made, make sure that it is accessible.

If your business has a website or storefront, it can be written in the header/footer of the website or at checkout.

This is a simple guide to creating refund/returns policies for your business.

Read more about refund & return policies HERE.