Understandably, it can be disappointing when a customer isn’t as in love with your products as you are. But like it or not, returns are an inevitable part of owning a business. Although your heart may always sink when a customer approaches the till with one of your bags in hand, a return policy makes the process easier—for yourself, your team, and most importantly, your customers.
So, what is a return policy, exactly? In simple terms, a return policy is your roadmap for accepting customer returns, including important factors like which items are eligible and their respective return timelines.
Feeling a bit overwhelmed at the thought of writing your first return policy? We’re on a mission to change that. With our step-by-step guide and free return policy template, you’ll be able to confidently whip up your own return policy, in record time.
What is a return policy?
A return policy is a set of rules laid out by a store that tells customers how they can return or exchange their purchases. In other words, it gives customers the information they need to handle buyer’s remorse—like how long they have to return the item, whether their purchase is eligible for a refund, or if they can swap it for something else.
What is a return policy template?
A return policy template is an editable, easy-to-use form that lets you add in all your company information, and have a ready-to-go policy. Since we’re all about saving you and your small business time and effort, we’ve even included one at the bottom of this article for you.
Why every small business needs a return policy.
With current retail return rates sitting at nearly 15%, having a return policy in 2024 is an absolute must-have. Besides saving your team from the hassle of handling returns individually, a clear return policy offers several advantages for small businesses, like:
Higher retention rates.
While it may come as a surprise, a return policy can help you retain customers. But there’s a catch—the process has to be easy. Nail that and 92% of consumers will buy again. What does “easy” entail? Nearly 80% of consumers want free returns, so if you can afford to cover return shipping costs, that’s a great place to start.
Higher lifetime value.
A customer-friendly return process can also enhance your business’s ability to increase customer lifetime value. One study found that when shoppers receive gift cards or instant credit, 61% will spend more than the original value of their purchase. So although it may be disappointing to hear a customer wants to return their purchase, there’s more at stake than a single transaction. Your return policy is about nurturing those long-term relationships that will keep you in business for years to come.
Better word of mouth.
We all know customers often share their frustrations about bad experiences, but here’s the bright side: they’re equally eager to spread the word about positive experiences. Not only do these positive reviews and recommendations boost your reputation—which is particularly important online—but they also attract new customers who appreciate hassle-free shopping.
Protects your company.
Unlike online giants like Amazon, your small business likely can’t afford to absorb the costs of customers who take advantage of your return policy. Including clear boundaries in your return policy safeguards your business against misuse, helps manage resources effectively, and prevents losses from unfair returns or scams.
Gives every employee a set of steps and policy to follow.
While your return policy is critical for customer satisfaction, it’s also a critical component of employee training. A clearly outlined return policy gives your team the information they need to handle customer returns independently—helping you eliminate at least one time-consuming task from your overflowing to-do list.
Bottom line? Your return policy isn’t just a formality—it’s a tool for building loyalty, protecting your business, and creating positive experiences that keep customers coming back for more.
How to write a return policy (with free return policy template).
Now that you know why your business needs a return policy, you’re probably wondering what you need to include in yours. Here’s a step-by-step guide with practical examples to save time and help you craft an effective return policy on your first try.
An overview of the policy.
Start with a brief introduction that outlines what your return policy is all about, so your customers know what to expect right off the bat.
Example: “At [Your Business Name], we stand behind our products and want you to be delighted with your purchase. If you are not completely satisfied, this return policy outlines everything you need to know about returning or exchanging our products.”
The timeline for returns.
Customers need to know how long they have to initiate a return, whether it’s 30 days, 60 days, or 6 months. Regardless of your chosen timeline, clarity is key, so, you may want to include this information in more than one area of your policy.
Example: “Please initiate returns within 30 days of purchase to qualify for a refund or exchange.”
Condition of items being returned.
Be as clear as possible about the conditions for returning items. This might include being unused, undamaged, and in their original packaging.
Example: “Returned items must be unused, unwashed, and include all original tags and packaging.”
The steps to return items.
Next, outline the steps your customers need to follow to return an item. Be sure to highlight any differences between returning online and in-store purchases—while you don’t need a separate online or in-store return policy, you may want different sections (see our return policy template for more details).
Example: “In-store purchases can be returned to the store with the original receipt. To return online orders, please contact our customer service team at [contact information]. Fill out the return form included with your order and ship the item back to us.”
Can all items be exchanged?
Your return policy should also specify which products are eligible for exchanges rather than refunds. This transparency builds trust and helps retain sales by offering a straightforward solution for product replacements.
Example: “We offer exchanges for items of equal value within 30 days of purchase. Customers are responsible for return shipping costs.”
What items can’t be returned?
Depending on your product line, you may have some items that are not eligible for returns or refunds, like personalized items. While your team should communicate this at the time of purchase, it’s also important to include these details in your return policy.
Example: “Unfortunately, we cannot accept returns on personalized items or items that have been used or damaged after purchase.”
Is there a restocking fee or a return shipping charge?
Let customers know if there are any costs associated with returns, like restocking fees or return shipping charges.
Example: “A restocking fee of 10% may apply to returns of non-defective items. Customers are responsible for return shipping costs unless the return is due to an error on our part.”
Required documents.
Specify the documents your customers need to include with their return, like their original receipt or order number. If you have a different process for returns made without this information, like store credit rather than a refund, include that information in this section too.
Example: “Please include a copy of your receipt or packing slip with your returned items. Returns without proof of purchase may be subject to store credit.”
Missing or damaged items
Nobody is perfect—and occasionally, your team might make a mistake. Whether it’s forgetting to pack an item or shipping a damaged one, your return policy should clearly address these situations.
Example: “If you receive a damaged or defective item, contact us right away. We’ll replace the item or give you a full refund, including return shipping costs. Please report any missing items from your order within [X days/weeks] of delivery, and we’ll quickly resolve the issue.”
Who to contact with questions
Even with an iron-clad return policy, some of your customers will have questions. Make it easy for them to find the contact information they need, whether it’s your customer service team or a dedicated returns department.
Example: “Need help with a return? Contact our friendly customer service team at [Contact Information]. We’re here to assist you Monday through Friday, 9am to 5pm.”
Dispute resolution
Lastly, include a brief section explaining how disputes regarding returns will be handled.
Example: “We aim to resolve any return disputes quickly and fairly. Please reach out to our customer service team for assistance.”
Where to put your return policy.
Want to know what’s, arguably, even more important than what you include in your refund policy? Where you put it. Because if your customers can’t find it, it’s pretty much useless. To make sure your efforts aren’t in vain, display your return policy in these key areas.
Your website
What do most of us do when we don’t know the answer to something? We Google it. To ensure your customers (and search engines) can find the information they’re looking for, create a dedicated return and refund policy page on your website. Include the link in your website’s footer and your FAQ section, so that your customers can easily find it from any webpage.
Receipts
A summarized version of your return policy should also be printed on customer receipts. That way, your customers literally have the information right at their fingertips, should they need to return or exchange their purchase.
Physical signs in store
Sure, in-store signage may seem a bit old school, but there’s a reason retailers still use it. Displaying clear and visible signs near your store’s entrances, checkout counters, and customer service areas increases the likelihood that your customers will read them before checking out. Why is that important? Because knowing they can easily return an item, gives customers the confidence they need to make a purchase.
Customer emails
It’s also a best practice to include a brief mention or a link to your return policy in order confirmation emails and shipping notifications. This reinforces your policy and ensures customers can easily review it as needed.
Checkout carts on your website
With 84% of buyers reading return policies before making an online purchase, your website’s checkout cart is another key area where you should display your policy. Allowing customers to review the policy before finalizing their purchase promotes transparency and gives them the confidence they need to complete the transaction.
Download our free return policy template.
Feeling overwhelmed at the thought of crafting your return policy from scratch? We got you. Our free return policy template provides a clear framework for outlining your return and exchange procedures, without the hassle of starting from scratch. Helping you:
- Save time: Our return policy template comes in a ready-to-use, customizable format. This allows you to modify it based on your business’s needs while sidestepping the time-consuming process of writing it yourself.
- Reduce customer disputes: A well-defined return policy helps prevent misunderstandings and disputes. Our template clearly outlines processes for returns, exchanges, timelines, and conditions—keeping your customers informed and minimizing potential conflicts.
- Spend less: A robust return policy can, surprisingly, save you money in the long run. Yes, really. While it may sound counterintuitive, having a return policy streamlines operations, reduces administrative overhead related to handling returns, and mitigates losses associated with unclear policies.
- Enhance customer satisfaction: When customers know what to expect from your return process, they feel more confident making purchases. This leads to higher satisfaction levels, encourages repeat business, and promotes positive referrals.
With an endless list of tasks on your to-do list, researching and writing a return policy is probably the last thing you have time (or want) to do. Save yourself the hassle by downloading our free return policy template today.
Download your free return policy template here: Return policy free template
Do it all, without having to do it all.
Need to knock a few more tedious, but uber-important business tasks, like scheduling, payroll, or compliance off your to-do list? Do it all, in half the time with Homebase.
