small business return policy

Small Business Return Policy: 8 Indispensable Tips

1. Be clear about receipts. To put it simply, a receipt is proof of purchase. It also contains information about the...
2. Require identification. Similar to the receipt, requiring customers to show identification allows you to verify the...
3. Differentiate “Return” from “Exchange”. Ideally, the return policy must...

Full Answer

How long should small business keep sales receipts?

You should keep receipts for as long as a taxing authority like the IRS or your state’s department of revenue can audit you.

What stores have the best return policy?

These 8 Stores Have the Best Return Policies

• Athleta. The athletic wear brand offers free returns and exchanges by mail and in stores at any time for items purchased online.
• Bed Bath and Beyond. Purchases made at Bed Bath and Beyond can be returned at any time in store. ...
• Kohl's. ...
• Lands’ End. ...
• L.L. ...
• Neiman Marcus. ...
• Nordstrom. ...
• Zappos. ...

How to calculate small business profit return?

How to Calculate ROI For a Small Business. Return on investment (ROI) is a financial concept that measures the profitability of an investment. There are several methods to determine ROI, but the most common is to divide net profit by total assets. For instance, if your net profit is $50,000, and your total assets are $200,000, your ROI would be ...

What are the rules for a small business?

• Certain employers, generally those with 50 or more full-time and full-time equivalent employees
• Health insurance companies
• Self-insuring employers of any size

How do you write a return policy for a small business?

How do I make a return policy?Create a return policy that builds trust with customers.Be clear and concise when writing your return policy.Don't demand things from your customers.Make your return policy easy to find and access on your website.Make sure your teams know your return and refund policy.More items...•

Can a business have a no refund policy?

United States. While there are no federal refund laws in the US, many state laws don't legally require refunds, instead allowing businesses to set their own refund policy. In some states, not conspicuously displaying a no refund policy means customers are entitled to refunds.

How do I write a return policy?

How to write a return policyThe number of days or deadline to return the product.The type of refund they will receive (store credit, exchange, full refund).The information they need to bring in-store or send online for the refund (receipts, credit card, etc).Conditions the product must be in to be valid for return.More items...•

What is the normal return policy?

It's important to let your customers know how long they have to return a product. Generally speaking, 15-30 days is standard, although some businesses opt for 90 days. Either way, you won't be doing yourself any favors by accepting returns beyond that time.

What to do if a seller refuses to refund?

If you qualify for a return but the seller won't give you your money back, you have some options:Write a complaint letter: we have advice to help you do that and a sample letter.Consider getting help from a consumer organization like Call for Action, Consumer Action , or the Better Business Bureau.More items...•

What to do if a merchant refuses to refund?

If asking the merchant for a refund didn't work, request a chargeback with your credit card issuer. Many card issuers let you dispute transactions by phone, mail or online. You may also be able to submit a dispute directly through your card issuer's mobile app.

What is 30 day return policy?

"A 30-day return policy" means that if you return the goods to the store within 30 days, the store will give you your money back. If you bring the goods back after 30 days, then it is too late.

How do you politely say no refunds?

No matter what means of communication you pick, you should be firm and polite. Use active language in your communication. Instead of saying “Your case has been investigated” and “The refund can't be provided”, go for “I have carefully looked into your situation” and “We can't issue a refund according to our policy”.

How do you handle customer returns?

3 Tips to Make the Most of Your Returns in Retail and Convert More SalesKeep Your Losses As Low As Possible. Minimize your losses with return stipulations. ... Record of All Returns, Exchanges, Refunds in Retail. ... Make Sure You're Always Providing Excellent Customer Service.

Is it illegal to not accept returns?

While many retailers have decided this makes for the best business practice, they aren't legally required to accept returns. Rather, retailers are required to accept returns only if the sold good is defective or if they otherwise break the sales contract.

What is a good refund rate?

A refund rate is calculated by the number of items refunded divided by the number of items purchased. A good range is somewhere between 7% and 15%.

What is the return policy of a company?

Return policies are the rules retail merchants establish to manage the process by which customers return or exchange unwanted or defective merchandise that they have purchased previously. Return policies are an extension of the customer service retailers provide; they tend to be fairly liberal as a consequence.

Is no return no exchange policy legal?

What if the source business establishment posted a “No Return, No Exchange Policy”? By all means, you can have your defective purchases returned, or money refunded. A No Return, No Exchange Policy is expressly prohibited under the law.

Can a shop refuse to give a refund?

For products bought in a shop, you do not have a legal right to a refund because you change your mind. If you bought the goods online, in most cases, you have 14 days to change your mind and get a full refund. Read more about shopping and shopping online.

Is a no refund policy legal UK?

You must offer a full refund if an item is faulty, not as described or does not do what it's supposed to.

How do you deny a refund to a customer?

Start With A Sincere Apology'We are extremely sorry and regret to inform you that we have to decline your request for a refund for your purchase of product X''This is to inform you we cannot refund your money for your purchase of X'

Where do I put a return policy on my website?

In addition to physically posting your return policy inside your brick-and-mortar store, it’s important for it to appear on your small business’ we...

What should I avoid in my return policy?

Your return policy should be easy for the average customer to understand. Avoid industry jargon and complex language that might cause your customer...

Should I offer store credit in my return policy?

It’s a great idea to offer store credit in your return policy for a variety of reasons. By offering store credit, you have more flexibility to rece...

Who pays the shipping costs to return a product?

Who pays the shipping costs to return a product? The answer is the discretion of the store, but most companies only pay for shipping costs to retur...

How long can you return Costco items?

If you’re a Costco customer, you can return most items you’ve purchased, so long as it’s within a 90-day period. It’s a generous policy. But sometimes it backfires.

How long does Amazon have to return items?

A sampling of return policies from major retailers proves this: Amazon, for example, has a 30-day period where customers can return their items, no questions asked. Amazon merchants, however, are free to determine their own return policies. Home Depot, Walmart, and Target all give 90 days.

What are the advantages of running a small business?

One of the biggest advantages of running a small business is that you don’t have to be so hard and fast with the rules as the big-box retailers do. You’re not subject to public scrutiny and Wall Street. You have the benefit of being able to tell your customers that “reasonable returns are accepted” and leave it there.

What happens when an actual return occurs?

When an actual return occurs, it’s charged against the already-established reserve. By keeping a consistent reserve, you avoid potentially significant fluctuations that may occur if for one reporting period there are higher (or lower) returns than usual.

Is a return a loss?

Unfortunately, it’s not just eating the cost of the product. A return requires extra time spent by your employees to handle the transaction, and sometimes it costs you an unhappy customer. A return is a loss, all around.

Return Policy Benefits for Business

A return policy benefits both the small business and its customers. From the business owner’s perspective, the return policy helps to set expectations. Writing a clear small business return policy also lends legitimacy. Further, clearly outlining the return processes helps customers to resolve issues on their own.

Return Policy Benefits for Customers

A customer-friendly return policy not only drives sales but also sees customers spending more time on your website. When return procedures are customer-centric, the consumer enjoys an easier experience and greater peace of mind that they’ll get what they want.

What Needs To Be In a Return Policy

You’ll easily find a small business return policy template available online. But you’ll want to customize that template to your particular business and its unique customers.

How To Make Your Return Policy Available

Whether your small business is wholesale or not, you’ll need a concise and clear return policy that consumers can easily find. Once you have decided on what you’ll write in your return policy, post it prominently.

What is a Return and Refund Policy?

What is a return and refund policy? A return and refund policy outlines the conditions under which customers can return or exchange items they have purchased. If you are looking at how to create a return policy, here are some of the basics it should include.

Why Your Business Needs a Return Policy

Why does your business need a return policy? A return policy can save business owners, their employees and their customers (both traditional clientele and online shoppers) plenty of headaches by defining when and how items can be returned or exchanged. A return policy benefits a small business in the following ways:

What to Include in a Return Policy

What should a small business include in its return policy? The precise formula will vary by store, and whether or not the merchant has eCommerce stores or a brick-and-mortar location. When creating a return policy, be sure to answer the following questions:

Return Policy Examples from Big Brands

An effective return policy will inform customers what to expect if they need to exchange merchandise or if the stores offer refunds. The following big brands’ return and refund policies set adequate expectations, which increases customer loyalty. Take a look at these return policy examples from big brands:

Store Return Policy Examples

While every online business and big brand has its own return policy, it’s important for stores to also have their own policies, which can be posted in the store and on its website. The following are examples of return policies for brick-and-mortar stores, posted to the retailers’ websites:

Small Business Return Policy Examples

Small businesses, too, create and post return policies to inspire trust within potential customers and loyalty from existing clientele. The following small businesses have posted effective return policies to their websites:

Store Credit Return Policy Example

Some businesses are known for their outstanding return policies, a feat which inspires customer loyalty and attracts shoppers who know the store will stand by its products. Retailers can add additional flexibility to their return policies by offering store credit.

What is the lifecycle of a return policy?

There is a lifecycle between your returns and refunds policy and the reviews and ratings of your business . Having a great return policy incentivizes people to leave good reviews, and good reviews incentivize more business.

How long does a business have to notify customers of their return policy in Virginia?

Virginia. A business must notify customers of its unique return policy in written display unless the merchant provides a cash or credit refund within 20 days of purchase. All Others. No right for customers to cancel contracts or purchase agreements.

Why is a refund and return policy beneficial?

of customers report they will continue to purchase from a business that provided a painless return experience . This is one of the many reasons having great refund and return policy is advantageous for all businesses. 1. Improve customer acquisition.

How long does it take to get a refund in California?

California. Retailers are required to clearly disclose refund policy if not full cash refund, exchange, or store credit within seven days of purchase . Failure to disclose will be forced to refund within 30 days of purchase. Connecticut.

What is a return and refund?

Whether you are a brick-and-mortar or eCommerce business, returns will cause you to incur costs associated with shipping and restocking or recycling the returned items.

Do retailers have to post refund policy?

Retailers are legally required to post its refund policy . Failure to disclose will be forced to refund within 30 days of purchase. Ohio. A merchant isn’t required to have any specific refund policy but it must publicize its policy. A customer is entitled to a refund if the policy is not posted.

Do you have to disclose your return policy in Massachusetts?

Sellers must post return policy on the wall, on merchandise, or on the receipt. Massachusetts. Refund, return, or cancellation policies must be disclosed to the buyer before the transaction is complete. If left undisclosed, the retailer will be forced to accept a return for a full refund within a reasonable period.

What does "refund policy" mean?

Refund policy — If you do allow refunds, indicate the conditions and time limitations of the refund process, how customers can get their refunds, and what type (s) of refund (s) you offer, including: Lastly, state how long it will take for a customer to receive their money back or a replacement product.

What is exchange policy?

Exchange policies are simply a specific form of refund policy. As mentioned earlier, refunds can include replacement goods or goods of similar value. If you offer one or both of these options, you should have a dedicated exchange section or exchange policy to detail your guidelines for trading in products.

Do ecommerce companies have to factor shipping costs into returns?

Ecommerce return policies can be especially tricky to navigate. Not only do ecommerce entrepreneurs need to factor shipping costs into their returns and refunds, but studies show that online consumers place a particular value on the online shopping returns experience.

What is a return policy?

Return policies are the rules a retailer creates to manage how customers return and exchange unwanted merchandise they purchased. A return policy tells customers what items can be returned and for what reasons, and the timeframe over which returns are accepted.

Why do we need a return and exchange policy?

Just like having a formal return and exchange policy will help eliminate some of the hours spent on customer service, using the right services for processing returns and exchanges will save you both time and money on the shipping and fulfillment and operations sides.

What is the difference between returns and exchanges?

When a customer returns a product for a refund, the business usually loses money on the customer acquisition and return shipping costs, plus it needs to refund the customer any profit made on the original order.

How to encourage exchanges over returns?

A common way to encourage exchanges over returns is by only offering to cover the cost of return shipping if the customer chooses to exchange the product. When presented with the three options above, the choice to get a store credit or new product may be more appealing to those who have not fully sworn off your brand.

What does it mean to return something in ecommerce?

In ecommerce, the customer usually decides independently if they want a return (which signifies a refund ) or an exchange (usually for a gift card or a replacement product of equal value).

What is upsell in ecommerce?

Upsell or cross-sell on exchange requests. One ecommerce returns best practice is to upsell or cross-sell on exchange requests. Although exchanges are usually more profitable than returns, their profitability can be narrow depending on the product and its margins.

What is returnly app?

Returnly is one of the larger self-service returns providers for ecommerce stores. The app provides online stores with their own customizable “Returns Center,” which customers can sign into using their order number or email address to access their past purchases and select items they wish to return.

What is a good place to include a return policy?

Receipts and shipping invoices are also a good place to include your return policy. If a customer has your product in-hand when deciding to initiate a return, they'll likely reference the record of their transaction for more information and next steps.

How long does it take to return a product after purchase?

Most companies mention a cap on how many days after purchase a customer can make a return. This could be 7, 14, 30, 60, 90, or even 120 days. Consider the type of product before setting your cap. If you sell one type of product, placing one cap will likely suffice.

How long does it take to get a refund from Amazon?

It states buyers will receive a full refund for most items returned within 30 days (if those items are fulfilled by Amazon). For products fulfilled by third-party sellers, the return policy may only vary slightly. Etsy sellers, on the other hand, are allowed to set their own Etsy shop return policy.

How to stop returns before they happen?

To stop returns before they happen, opt for multiple high-resolution photos of your item, videos showing how the products work, sizing charts (if applicable), etc. to minimize the chances of receiving returns. Check out more product page marketing tips.

Is profit loss inevitable?

While some profit loss will be inevitable, there are ways retail small business owners can ensure the return process is seamless for both them and their customers. Continuing reading for some things to keep in mind as a small, product-based business.

Do you need a receipt for a return?

Another thing to consider for your return policy is whether or not a receipt will be necessary when a customer is making a return. You may want to accept other forms of proof of purchase, like a phone number or email address if they were provided at the time of purchase.

Is profit loss inevitable when accepting returns?

Some profit loss is inevitable when accepting retail returns but these tips can help you keep it under control. Plus, offering a fair return policy is essential to good customer service and continued sales. Check out more business and labeling tips.

Creating A Return Policy

• Knowing how to write a return policy is an important part of being a small business owner. You need to know what information to include so the return process is easier for you, your employees, and your customers. Establishing a clear return policy can also help protect your business from …

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