Shoppers today are more likely to take something back than they ever have been before. Thanks to the handy tool we call the internet, customers can make a purchase from you without ever even touching the product. This is very convenient for them, but not so nice on your business wallet when it comes to returns. It doesn’t just take money to put that unwanted birthday gift back in your inventory, it takes time as well. To avoid all of the costs of returned merchandise, merchants are enforcing stricter return policies. Strict return policy mistakes can also cost your business money. Here’s some guidelines to keep your customers in check, but still comfortable enough to continue shopping where they love.
“Within 30 Days”
Let’s say your customer buys new Christmas lights December 10th, but hasn’t had time to return them due to being on vacation. By the time they come back January 15th, that string of lights is out of season, and you won’t be able to sell them at full price. Not only have you lost money on the initial sale, but now you’re paying for return fees, and have worn product.
This is a struggle many businesses are having, and therefore opt for a ten day return policy. The Washington Post states this is one of the worst return policy mistakes your business can make. They hold that the longer a customer has to return something, the less likely they are to do it. Also, the shorter the window, the less likely they are to buy it in the first place. We suggest holding true to that 30 day minimum, but only giving the customer “in store credit” when they come to return. This way, you surely have the initial purchase of the string lights, but the customer has room to exchange them if they wish.
Imagine one of your stores fails to abide by your company-wide return policy. This store will be picked over others to shop at because of their convenience to customers. Eventually your other locations will suffer, while the lax store is still paying more in return fees. It’s a loose-loose return policy mistake.
Businesses struggle with this because if they don’t make exceptions for those irate customers, they might just turn to chargeback fraud. If customers made the purchase on a credit card and are unable to get their money back in the store, they will call up their card company and dispute the purchase. Sadly, you’re still paying for the return in this scenario because the bank pays back the customer, then comes to you for the total of the bill. A whopping 35% of all fraudulent purchases fall under chargeback fraud according to Chargeback.com. So, how do you lower your chargeback fraud percentage?
Identify Your Company’s Return Policy Mistakes
We recommend avoiding chargeback fraud by ensuring wonderful customer service and having customers sign the return policy on a receipt. Unclear policies and bad customer service are the next two reasons customers turn to chargeback fraud, and both of these can be completely avoided. After every purchase, identify your 30 day, in-store-credit return policy. Have the purchaser sign it, and thank them for their business.
We believe that being fair and transparent are two of the most important qualities a business can have! Hopefully you find that we live up to this after scheduling an appointment for a free price analysis of your current merchant services provider.