How to write a return policy? A step-by-step guide

Return policy: two words that can make or break a customer's experience. 

And with the NRF’s 2023 Consumer Returns in the Retail Industry report revealing $145 million in returns for every billion in sales, it's a reality you can’t ignore. For eCommerce? Even more intense: 17.6% of purchases head back – a $247 billion tidal wave.

But don't let these numbers scare you – they're a clue. You should see returns as a chance to turn hesitant clickers into repeat customers. Especially for small businesses, a generous, clear return policy isn't just excellent service; it's how you prove you care more and earn the privilege of the next sale.

This guide equips you to craft a winning eCommerce return policy. You'll learn why it's essential, how to write one, and find examples and a template to get you started.

What is a return policy?

A return policy is a set of rules a business establishes to manage how customers return or exchange unwanted goods or services. It details the conditions for returns, such as the eligible time frame, accepted items, the process, and associated costs.

Zappos, for example, built its reputation on exceptional customer service, including a 365-day return window with free shipping on returns and exchanges. Their return policy minimizes purchase risk and encourages shoppers to try shoes without hesitation.

Why your eCommerce business needs a return policy

According to Happy Returns’s report, Returns Happen 2023, 81% of shoppers check the return policies before they buy, and 55% will abandon their cart if those policies aren’t convenient.

Here's why a robust return policy is non-negotiable for your eCommerce business:

• Reduce cart abandonment: It combats purchase anxiety, a major contributor to cart abandonment
• Build customer confidence and loyalty: It signals that you stand behind your products and prioritize satisfaction
• Increase customer lifetime value: Satisfied clients are more likely to become repeat buyers and recommend your brand to others
• Gain a competitive advantage: It can be a crucial differentiator, especially for small businesses competing with more established brands

A clear return policy is a smart move, but smart businesses also know their financing options. Learn more about the advantages and disadvantages of different eCommerce financing options.

How to write a return policy?

Crafting a customer-centric return policy demands clarity, empathy, and a deep understanding of your target audience. Follow these steps to create one that instills confidence and streamlines your operations.

1. Define your return window

The return window is when a customer can return a purchased item for a refund, exchange, or store credit. This period begins from the delivery date and can vary significantly.

Factors to consider when setting your return window:

Product Type 

The nature of the product plays a role in determining an appropriate return window. Perishable goods like food items or flowers necessitate a much shorter window, often just a few days, to account for their limited shelf life. 

On the other hand, durable goods like electronics or furniture allow extended time frames, usually 30 to 90 days, as their quality and functionality are less time-sensitive.

Industry standards

Researching your competitors and understanding the prevalent return windows within your industry can help you manage customer expectations and remain competitive. 

For instance, a 14-day return window might be standard for clothing retailers, while a 30-day one is more common for electronics.

Shipping times

Factoring in shipping times is vital for businesses operating online and handling international orders. 

Customers need sufficient time to receive their purchases and assess their suitability. Offering extended return windows for products with longer delivery times demonstrates fairness and transparency.

Seasonality

Adjusting the return window to accommodate the season makes sense for products with seasonal relevance. For example, seasonal inventory like winter coats might have a longer window stretching into early spring, while swimwear could have an extended one through summer.

Brand positioning

Your return policy can also reflect your brand positioning and customer service philosophy. A more tolerant window, like 60 or 90 days, can be a powerful differentiator, signaling confidence in your products and a commitment to customer satisfaction.

Once you've determined an appropriate return time frame, state it in your policy using straightforward language. For instance:

• "You may return most new, unopened products within 30 days of delivery for a full refund"
• "We offer a 14-day exchange and refund period on all clothing items, starting from the date you received your order"

2. Specify eligible items and conditions

Defining which items are eligible and their expected condition upon return prevents misunderstandings and ensures fairness for both parties.

Define returnable items

State the product categories or items eligible to avoid ambiguity. Consider the following examples:

• Broad Categories: "We accept returns on all clothing, shoes, and accessories."
• Specific items: "You can return eligible smartphones, laptops, and tablets within 14 days of purchase"
• Conditional returns: "We offer returns on sale items for store credit only."

Outline non-returnable items

Clarity prevents headaches. Be upfront about products that are never coming back:

• Personalized goods: Items specifically customized for the customer, such as engraved jewelry or monogrammed bags, are generally non-returnable
• Perishable items: Due to their limited shelf life, perishable goods like food, flowers, or plants are non-returnable
• Intimate apparel: For hygiene reasons, undergarments, swimwear, and other intimate apparel are excluded from return policies
• Health and hygiene products: Products like cosmetics, earrings, or medical devices are non-returnable for health and safety reasons
• Software and digital downloads: Due to the nature of digital products, software and digital downloads are non-returnable once downloaded or accessed

Specify acceptable item condition

Defining the condition in which you expect returned items manages customer expectations and reduces disputes. Use descriptive language to provide clarity:

• New and unused: "Items must be in new and unused condition, with all original tags and packaging intact"
• Resalable condition: "Please ensure items are in their original packaging and a resalable condition"
• Defective products: "If you received a damaged or defective item, please contact us immediately for assistance"

Handling special cases

Addressing exceptional circumstances within your eCommerce return policy provides comprehensive guidance:

• Final sale items: Label final sale items and state their non-returnable status
• Gift returns: Outline a separate process for gifts, potentially offering store credit or exchanges
• Extended return window: As part of your Black Friday and Cyber Monday (BFCM) planning and sales strategy, add an extended window for purchases made during the BFCM period

3. Outline the return process

Nobody buys something hoping to return it. But a painless process is a promise whispered to your customer: "We're here for you, even if things don't work out."

Initiating a return

Make starting a return obvious and effortless. Include a prominent link on your website, an email address (returns@[yourstorename].com), and a phone number with human hours. 

If you use Shopify, for example, its new customer self-serve returns feature means processes are easier than ever. But if you have an online portal or use specific eCommerce tools, offer customer-friendly instructions on how to access and use them.

Remember to specify the information clients need to have when initiating a return, such as:

• Order number
• Item(s) being returned
• Reason for return

Return authorization

Specify whether an RMA (Return Merchandise Authorization) number is required for all returns. If so, explain how customers can obtain one. This could involve:

• Automatic generation: Your online portal could automatically generate an RMA number during the process
• Customer support: Customers could request an RMA number through email or phone communication with your team
• RMA placement: Instruct your clients on where to mark the RMA number on the package to ensure proper identification

Packaging and shipping

Encourage customers to return items in their original packaging whenever possible to minimize damage during transit. You must also give instructions for securely packaging the item, using appropriate padding materials to prevent damage.

Advise clients to use a trackable shipping method and retain their tracking number for peace of mind. Consider offering prepaid shipping labels for added convenience.

Return address

Provide the complete and accurate address where customers should ship their packages. If you have a dedicated return center, specify this address to avoid confusion.

💡 Additional notes:

• Return shipping label: Write whether you have a prepaid return shipping label or if customers are responsible for the costs
• The time frame: Set a reasonable time frame for clients to ship the item after initiating the process

4. Offer multiple return options

Your return policy isn't just a legal document; it's a chance to show how much you value your customers. Instead of backing them into a corner with a single solution, empower them with choices.

Refunds

For many customers, a full refund to their original payment method is the preferred resolution when returning an item. 

To ensure clarity and manage expectations, state the conditions for receiving a refund. These conditions typically include returning the item within the specified time frame and ensuring it's in the acceptable condition outlined in your policy. 

Explain how the refund is processed, specifying whether it's credited back to the original credit card, debit card, or another payment method used for the purchase.

Exchanges

Exchanges are convenient options for customers who want a different size, color, or style variation of the same product. Start by specifying which items are eligible for exchange and outline the process. 

For instance, advise customers to confirm product availability before starting an exchange request to avoid disappointment. Tell them how they can request the exchange through your online portal, email, or phone.

Store credit

Offering store credit as a return option can be mutually beneficial. For customers, it provides immediate credit that they can use toward future purchases. For businesses, it improves customer retention and increases lifetime value. 

When presenting store credit as an option, highlight its benefits, such as immediate availability upon return processing and potential bonus incentives. State the validity period of the store credit, ensuring it aligns with your business practices and gives customers enough time to redeem it.

💡 Factors to consider when offering return options:

• Product type: The nature of the product may influence the available return options
• Business model: Your business model and its impact on inventory management practices play a role in determining suitable return options
• Customer preferences: Consider the preferences of your target audience and options that align with their needs

5. Be Transparent about costs

Let's talk about the elephant in the room: return shipping costs. Transparency is key. Don't hide behind vague language or surprise your customers with unexpected charges.

Free return 

In a world obsessed with "Prime" and instant gratification, free returns are no longer a luxury; they're an expectation – they can be the deciding factor for a hesitant buyer. Absorbing this cost also demonstrates confidence in your products and a commitment to customer satisfaction.

Shared costs

Sharing the cost of return shipping can be a fair compromise. A flat-rate fee or using a shipping calculator provides transparency and fairness. Customers appreciate predictability, and your bottom line will thank you.

Customer-paid returns

This option isn't going to win you any popularity contests. But sometimes, it's necessary. For low-cost items or when customers change their mind, requiring them to cover return shipping might be justifiable.

💡 Pro tip: State whether the original shipping costs are refundable, especially if the return is due to a defect or an error on your part.

6. Address international returns

Going global? Then, your return terms need a passport. International returns come with their own set of rules and complexities. Ignore them, and you'll lose more than just a sale – you'll lose trust.

So, how to write an eCommerce return policy for international orders? Consider these key factors:

Shipping costs

International shipping is a labyrinth of customs fees, currency fluctuations, and logistical hurdles. Absorb some costs, offering subsidized returns, or partnering with carriers to provide prepaid labels. Remember, a seamless experience transcends borders.

Customs duties and taxes

Navigating customs is like learning a new language – filled with tariffs and regulations. 

Empower your customers with clear information about potential duties and taxes. Direct them to resources and sample forms, and emphasize the importance of accurate declarations.

Do you need help deciphering duty fees? Learn how to calculate customs duty and simplify the process for your customers.

Return process

A one-size-fits-all approach to returns won't do for international customers. 

Craft a dedicated process that addresses their unique needs. Provide your contact information, a designated international return address, and recommendations for reliable shipping methods.

💡 Going global demands more than translation:

• For significant international markets, explore local return centers or partnerships with fulfillment providers
• Communicate your policy on currency conversions for refunds, eliminating any financial ambiguity
• Focus on responsive communication that transcends time zones and language barriers

Return policy examples and template

Need inspiration for crafting a stellar return policy? We've assembled a couple of examples and a general template to guide you. But remember, yours should reflect your unique brand and cater to your specific customer base.

Before diving in, we encourage you to explore real-world return terms from businesses within your industry and niche. Seek inspiration from established players and rising stars alike.

Return policy example 1: Everlane

Everlane's return policy is a masterclass in clarity and customer-centricity. They make the process easy, transparent, and hassle-free, fostering trust and encouraging purchases. Here's how they nail it:

• Crystal clear conditions: Unworn, original condition, tags intact – Everlane sets clear expectations upfront.
• Choice is empowering: In-store, Happy Returns, or mail-in – Everlane offers flexibility to suit customer preferences
• Transparency builds trust: A $7 fee for mail-in returns, clearly communicated and deducted from the refund

Return policy example 2: Warby Parker

Warby Parker goes above and beyond with their return policy, making it easy and risk-free for customers to find their perfect pair of glasses. Here's how they stand out:

• Free returns = customer delight: Warby Parker removes financial barriers, encouraging returns and building loyalty
• Multiple touchpoints, consistent message: Website, phone, email – clients can access information seamlessly
• Beyond the basics: A 6-month, no-scratch guarantee demonstrates commitment and builds confidence

Simple return policy template

[Your Store Name] Return Policy

Your satisfaction matters! If you’re unhappy with your order for any reason, you can return it for a refund, exchange, or store credit within [Number] days of delivery.

Eligibility:

• Items must be returned in new, unused condition with all original tags and packaging
• Certain items, such as [list of non-returnable items], are not eligible for return

Return process:

1. Contact our customer support team at [email address] or [phone number] to initiate your return
2. Pack the item in its original packaging
3. Ship the item to the address our customer support team provides

Return shipping costs:

• [Specify who pays for return shipping costs]

Refunds:

• Upon receiving and inspecting your return, we’ll process your refund within [number] business days. We'll credit the refund to your original payment method unless otherwise specified. Please allow additional time for your bank or credit card company to process the refund

Exchanges:

• We’re happy to facilitate exchanges for a different size or color of the same item, subject to availability. Please get in touch with our customer support team to inquire about available options and initiate an exchange

Store credit:

• As an alternative to a refund, you can receive store credit for the total purchase price of the returned item(s). Store credit can be used toward future purchases on our website and doesn’t expire

Damaged or defective items:

• If you receive a damaged or defective item, please get in touch with us immediately so we can rectify the situation promptly. We may request photos of the damaged item to expedite the resolution process

International returns:

• For international returns, please get in touch with our customer support team for specific instructions and to discuss any applicable shipping costs, customs duties, or taxes

Contact us:

• If you have any questions or require assistance with the return process, our dedicated customer support team is here to help. You can reach us at [email address] or [phone number]

This return policy is subject to change without notice. Please refer to our website for the most up-to-date information.

Return policy best practices

You've crafted a return policy that's clear, concise, and customer-friendly. Now, let's make it matter.

1. Don't play hide-and-seek

Your return policy shouldn't be a buried treasure. Make it easy to find. Footer, FAQ page, product pages, checkout – if a customer even thinks about looking for it, it's right there.

By the way, make sure your products are also easy to find. Check out our eCommerce SEO guide for beginners: everything you need to know about tools and strategies to rank higher on Google.

2. Speak human, not legalese

Jargon is for lawyers, not customers. Ditch the technical terms and write your policy in plain, simple English. Think short sentences, bullet points, and clear headings. Make it scannable, digestible, and enjoyable to read.

3. Sell the benefit, not the rule

Focus on what your customers gain from your policy, not what they're restricted by. Instead of "No returns after 30 days," try "Enjoy peace of mind with our 30-day return window." See the difference?

Apply persuasive messaging to your email marketing, too. Get inspired by these 5 email templates to drive eCommerce business growth.

4. Be remarkably generous

Go above and beyond the industry standard. A longer return window and free return shipping aren’t expenses but investments in customer loyalty. Make your competitors look stingy by comparison.

5. Automate the return process

Technology is your friend. Use return management software, prepaid shipping labels, or anything that removes friction from the process. Make returns so easy they're practically satisfying. Okay, maybe not satisfying, but definitely not a headache.

Beyond the return: stoking the fires of growth

While returns might seem like a logistical hurdle, they can be a golden opportunity to build customer trust and loyalty. A clear, fair return policy is no longer a "nice-to-have" but a must-have for any successful eCommerce business.

But what happens when the "problem" isn't those returns but a beautiful surge of demand? When your inbox overflows with praise, not requests? That's when you need to shift gears, think bigger, and fuel the momentum.

Enter revenue-based financing:

• Growth capital, your way: Access funds to scale on your terms. No equity sacrificed, no personal guarantees demanded
• Fuel for the fire: Seize the opportunity. Expand your inventory, conquer new markets, watch your vision take flight
• Flexibility for the agile: Repayment flexes with your revenue. A slow month? No problem. A surge in sales? Everyone celebrates

Ready to turn that surge into unstoppable growth? Stenn is the next-gen capital platform built for businesses like yours. Apply in minutes, get funded fast – let's make it happen.