4 Ways Your Return Policy Could Hurt Your Stores Holiday Sales

When a shopper buys a gift from your store, you have the opportunity to earn not one but two loyal customers — that shopper, and the person who receives the gift. A poor return policy, however, not only can cut into your store’s holiday sales, but also hurt your reputation with prospective customers.

If you think return policies aren’t a big deal to shoppers, think again.

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 4 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.

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.

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.)

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.

Unhappy Shopper Photo via Shutterstock

Source: Small Business Trends