Return guarantees sound like something you would not want to have in your ecommerce business. After all, you do not want customers to return something they have bought. It sounds counterproductive. But without it your business will suffer because of decreased customer confidence. Return guarantees not only safeguard your business, they protect your customers.

Defining Your Policy

A return guarantee is a policy that allows customers to return or replace damaged or defective items within a set period of time. In general, most companies have a 30-60 day return policy that starts on the date of purchase or in the case of ecommerce sites, the date of delivery. The Federal Trade Commission also requires that registered businesses have a form of money back or return policy, and sets strict regulations or stipulations a business should follow.

The ability to return defective products or get money back is a safety net customers appreciate. Given the number of fraudulent websites online, this sense of safety allows your customer to purchase without fear. For anyone who has ever purchased a defective item from any manufacturer, this can go a long way towards avoiding frustration.

The loophole is that some customers abuse policies like this, but you can avoid that with a clear-cut well-written policy that stipulates how and when purchases can be returned or replaced. This depends on how your ecommerce business is set up. There are many ways to define return policies -- but make sure your customer understands them or you may end up dealing with a lot of angry phone calls.

Creating a great return policy means calling in a lawyer and crafting great copy that can easily be seen on your ecommerce website. But the time and trouble should be worth it, especially if majority of business is in physical products that are shipped and received.

Why It Matters

You might feel that nobody wins when goods are returned. Customers are dissatisfied; your business suffers losses, so why should you have a policy in the first place?

A return guarantee is usually put in place to ensure customer happiness, create an opportunity for revisits and more orders in the future and to protect your ecommerce business. It can also help your business minimize losses, by stipulating the conditions of the return.

Reasons for Return

There are several reasons why customers return items.

First, the item may not meet the customer's expectations. In the case of clothing retailers, it can be a size issue. A return/exchange program can be the solution to this mishap, as well as clear cut sizing copy to help your customers select the right size shoe or article of clothing.

Second, the item may be damaged. Imagine a situation where you stick your customer with a damaged item and have no way to remedy this solution. In this case a return/replacement policy is the best solution. You can also write your policy so that customers can simply refuse the shipment if the item received is damaged.

Third, the item may be the wrong item -- the wrong color, the wrong shape or the wrong product entirely. In many cases return guarantees do not cover honest mistakes, but a policy in place can make the difference between a happy customer and a frustrated one.

Finally, other factors can come into play, such as fraud. Although most ecommerce sites are protected by strict SSL protocols and use a variety of protection software, sometimes illegal transactions do happen.

Make sure your return policy is easy to read and easily visible. In fact, you can make sure your customer agrees to it before the purchase by including it as part of your shopping cart steps.

Customer Happiness

It can also mean the difference between getting an item back in good condition or customers returning items on a whim, which can help cut down on your expenses. For example, your return policy clearly states that you will not pay for return shipping unless the item is damaged or the customer refuses delivery. This is why crafting your policy should be done carefully.

Your return policy matters, if your customers matter. A return policy means that you are aware that things can go wrong and you are willing to fix them. This gives you a set of clear guidelines to help you handle customers. It creates the right sort of expectations. In an ecommerce business this can mean the difference between success and failure, between customer retention and great reviews.

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