2017-03-29 00:00:00 Sales English Balance your business needs with customer demands and consumer behavior to create the best refund policy for your small business. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/A-Retail-Business-With-Refund-Policy.jpg https://quickbooks.intuit.com/ca/resources/sales/5-considerations-setting-refund-policy/ 5 Considerations When Setting Your Refund Policy

5 Considerations When Setting Your Refund Policy

2 min read

Refunds are a necessary evil for any company engaged in sales. The hard truth is that, sometimes, people just don’t want to keep your products. Use these tips to create a personalized refund policy for your business that keeps customers happy without destroying your bottom line.

Check Out Your Competitors

Take a look at your competitors to see what refund policies are standard in your industry or location. Refund policies aren’t regulated by the government, so checking out similar retailers is the best way to get a feel for your sector. You want to create a uniquely tailored refund policy by putting your own spin on common practices. Customers are used to restrictive policies and restocking fees for high-end electronics, but you probably won’t win any fans by adding a restocking fee to clothing returns at a brick-and-mortar store. You may be able to improve on competitors’ policies with some customer-friendly changes, such as adding an extra week to return items or taking a few dollars off your shipping fees.

Analyse Customer Behavior

Besides analysing your competitors, try to take a look at your typical customers and their spending habits. In addition to your actual products, consider the average purchase price, purchase frequency, and payment method. If you are a clothing retailer whose customers often come back each month, a nonexpiring store credit can be an attractive option. If you own a furniture store where customers make big, one-time purchases, a refund in the payment method used, less a restocking fee, is a better way to match customer needs.

Match Your Policy to Your Personality

Your refund policy can serve as another way to promote your company’s personality. If you run a child-centric company with a playful style, an overly strict refund policy runs counter to this image, and it can feel like a bait-and-switch to your customers. Personalize the wording, length, format, and design of your refund policy to create a consistent, on-brand message.

Keep It Simple

Your refund policy should be easy for both your customers and your employees. Long lists of exceptions, special fees, and other requirements can overwhelm customers and discourage them from doing business with you. Similarly, the more complicated your policy, the more likely an employee will make a mistake. A refund policy doesn’t benefit your business if it isn’t enforced properly. This can be especially damaging for sales if different locations implement different policies. “No refunds without a receipt” and “No refunds after 60 days” are popular policies because they’re easy to remember and set clear boundaries.

Post Your Policy

Once you settle on a policy, you want to make sure it’s posted in visible, easy-to-access locations. A sign behind the register is good; printing the refund policy on the receipt is even better. Can’t upgrade your printer? One alternative is printing your policy on business cards, and then keeping them at the counter or tossing one into every bag. If you do most of your sales online, make sure customers can get to your refund policy page from individual listings or a confirmation screen before paying. A highly visible policy before the sale can save you headaches down the road.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

How to Organize Your Payroll to Deal With Employees and Independent Contractors

To keep your business running smoothly, you may need a mix of…

Read more

Advice, Tips, & Tools for the Self-Employed

If you’ve been working for a while, you might be thinking about…

Read more

Temporary Workers: A Guide for Employers

If your business is subject to seasonal spikes in activity, perhaps in…

Read more