2018-08-08 01:13:10HR and Management: Client RelationshipsEnglishhttps://quickbooks.intuit.com/in/resources/in_qrc/uploads/2018/08/business-owner-scans-returned-item.jpghttps://quickbooks.intuit.com/in/resources/hr-and-management-client-relationships/https-quickbooks-intuit-com-india-r-client-relationships-small-business-return-policy/Small Business Return Policy: All You Need To Know

Small Business Return Policy: All You Need To Know

3 min read

At some point, you may be faced with a customer who wants to return a product. Customers seek to return items for many reasons. Hence, establishing a clear return policy makes your business appear professional and builds customer trust. A good return policy can also give you a leg up over competitors, who may be harder to deal with for dissatisfied customers. Here are some things you need to know about your small business return policy.

Why Are Return Policies Necessary?

Regardless of best intentions, sometimes a product fails to meet customer expectations. You may have lots of satisfied customers, but some won’t be happy. Reasons for returns range from poor fit to wrong color. In some cases, the product has flaws that make it unusable. While no business likes to issue refunds, customers expect to be treated fairly in these situations. Nothing angers a customer more than a business refusing to take back merchandise the customer sees as unacceptable.

Unfortunately, some Indian businesses have gone as far as printing “no returns or refunds” language on the back of sales receipts. This practice is prohibited by the Department of Consumer Affairs. Because of this, a customer has a good chance of being awarded a refund after filing a state consumer complaint. This can all be avoided with a sound return policy.

What Does Your Small Business Return Policy Need?

There are five components to consider when creating a return policy. Each component helps explain to customers the steps they should take to either exchange a product or get their money back.

Return days. After making a purchase, the customer has X number of days to return the merchandise. This may be 10, 15, 30, 60, or 90 days. You have the option of accepting returned merchandise “as is” or only in good condition. Consider what the customer thinks is fair when making your decisions.

Refund type. Customers are told what kind of refund to expect. Options include:

– full money back,

– money back minus a restocking fee,

– store credit, product replacement, and

– exchanging the product for another one of similar value.

How to return. Customers learn where they can return products. It may be a showroom or other location. Including details such as an address and customer service phone number is helpful.

Return shipping and handling. Are you going to cover shipping and handling fees for mailed items. Or will the customer do that?

Length of time. In this section, customers are informed about how long they can expect to wait for a refund. Take, for example, cases where customers pay by credit card or remotely. You must consider what the average wait is to receive a bank transfer or reversed credit card transaction.

You can enhance this bare-bones information with details specific to your industry and business. Return policies are not a “one size fits all” deal. This type of policy should be tailored to suit your needs.

Things to Do

  • Make your policy easy to read by using common layman’s language
  • Use a light tone of voice
  • Post your policy everywhere a customer is likely to see it
  • Let staff know about the policy
  • Inform customers of any changes to the policy

Things to Avoid

  • Using stern tone and words such as “must” and “required”
  • Hiding any fees customers are expected to pay
  • Arguing with customers over policy details
  • Failing to admit mistakes when they happen

Taking the time to create a return policy is well worth the effort. Return policies establish clear guidelines. These give customers relief when they feel a product doesn’t live up to their standards. With a policy in place, customers are less likely to seek outside solutions to a solvable problem.

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.

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