What is a Return Policy?

A return policy is a set of rules a retailer establishes to manage how customers return and exchange unwanted merchandise they purchased. These policies outline which items can be returned and for what reasons, as well as the timeframe within which returns are accepted.

From Apple's strict 14-day return policy to IKEA's generous 365-day return grace period, nearly every major retailer offers return and refund policies to its customers—and your business should too.

Why Should You Have a Return Policy?

A fair return and exchange policy builds trust between a business and its customers. In fact, providing a clear and consistent way for customers to return a purchased item can increase conversion rates and repeat purchases.

Giving customers a full refund on their orders can result in a loss of profitability, and finding out that someone didn't like your product can be frustrating for business owners who believe passionately in the benefits of their products and services.

For these reasons, it can be tempting to avoid creating a return policy. A comprehensive refund and leaving the escalating problem unaddressed. However, as you'll see, this would be a mistake.

Pitfalls of a Poor Return Policy

Over time, customer complaints about your return policy can begin to spread on social media, appearing as ratings or comments under your ads, or even in Google searches for your business. This is where a poorly implemented return policy begins to negatively impact your overall reputation as a business.

If negative sentiment about your return and refund policies begins to spread online, you'll likely experience a decline in both lead conversion and overall customer satisfaction.

Manually processing each return and dealing with customers on a case-by-case basis can also be costly to your business operations and stressful for your customer service staff. If the time and expense involved in processing returns is not monitored and optimized, it can prevent your business from scaling.