Guide to Crafting a Exchange/Return Policy (+Free Template)
Here’s everything you need to know to write your e-commerce exchange policy.
Table of content Why Exchanges are often better than returns? What Should You Include in Your Policy? What Do Exchange Policies Look Like? Template 1 Template 2 Examples of Brands With Effective Policies
Retailers are feeling the strain from "bracketing," where customers are opting for at-home try-on instead of using fitting rooms and buying multiple sizes online with the intention of returning a bulk of them.
The lack of a proper system for handling returns, including an unambiguous return policy, can consume substantial amounts of time, energy, and money. This includes prolonged periods of customer service emails and a significant increase in the cost of shipping replacement products, particularly following holiday periods.
Having a concise and clear exchange policy is vital for any e-commerce business. After all, a well-written exchange policy can help you reduce the number of returns you encounter and boost customer satisfaction. To learn more about why an e-commerce exchange policy is essential and how you can write one yourself, continue reading below.
Why Exchanges are often better than returns?
Retaining customer loyalty: When customers are allowed to exchange a product, the brand values their satisfaction and is willing to work with them to resolve any issues. This can help retain customer loyalty and increase brand credibility.
Minimizes financial loss: Returns often result in a complete loss of revenue for the brand, as the customer is entitled to a full refund of the original purchase price. With an exchange, the brand can still retain some of the customer's business, as they may choose to purchase a different product.
Reduces waste: Returns often result in surplus stock that the brand must dispose of or sell at a discount, leading to financial loss and increased waste. Exchanges can help reduce this waste as the product being returned may still be able to be sold to another customer.
Improves product life cycle management: By tracking the exchange patterns, brands can gather valuable data on customer preferences, product issues, and market trends. This information can be used to improve the design and quality of future products, leading to improved product life cycle management.
Reduced Customer Support Requests. An exchange policy can also cut the number of customer support requests you receive. This is because a good exchange policy already provides clear answers to common questions and concerns.
Increased Sales. By building trust and improving the customer experience, your exchange policy can help boost sales and increase revenue for your business. Customers are more likely to buy from stores when they feel confident they'll go through a smooth exchange process if they need to return or exchange.
What Should You Include in Your Policy?
1. Scope
One of the first things to mention when you write your exchange policy is the scope of the policy. In other words, you will want to define which products are eligible for exchange. Conversely, you may find it more convenient to list which products are excluded from exchanges. For example, if you’re a clothing brand, for hygienic purposes, items for innerwear (underwear, swimwear), socks, baby products, shoes, and other accessories are usually not allowed to return or exchange.
2. Exchange Process
The next thing you should include in your exchange policy is the exchange process itself. Specify the steps customers need to take in order to start the exchange process.
Free People Return and Exchange Process
3. Timeframe
Another critical element of a good e-commerce exchange policy is the timeframe for exchanges. This may involve you stating a specific number of days after receipt of the product, within which customers can initiate an exchange.
The North Face offers 60 days return/exchange period
4. Return Shipping Policy
Another section you'll want to include in your exchange policy is the return shipping policy. This section will outline the cost and responsibility of return shipping. Specifically, it should consist of who pays for return shipping and who's responsible for the safe return of the product.
For example, you may specify that you offer free return shipping for exchanges or provide a prepaid shipping label to make the process easier for your customers.
5. Information About Refunds
The last component of any excellent e-commerce exchange policy is information about refunds. You’ll want to describe the process for obtaining a refund if an exchange isn’t possible. You’ll also want to lay out the timeframe within which refunds will be issued.
For example, you may urge customers to email customer service or use a specific online form to initiate a refund.
By including some or all – you can mix and match sections as needed – of these components in your e-commerce exchange policy, you can develop a clear and comprehensive policy that benefits your business and your customers.
What Do Exchange Policies Look Like?
If you're still having difficulty writing your exchange policy, consider starting with the templates below. Note that these templates are meant to serve as guides and may not have all the exchange policy components we listed above.
It’s up to you to customize these templates and remove or add information as you see fit.
Template 1
Welcome to [Your Company Name]'s Exchange Policy!
We want to ensure you're completely satisfied with your purchase, so we offer an exchange on [list products eligible for exchange]. Here's how it works:
1. Ensure you purchased the product no longer than [time frame, e.g., seven days] ago.
2. Please fill out the exchange sheet on our website or email us at [customer support email] to start the process.
3. Ship the product back to our warehouse at [address]. Return shipping is the responsibility of the customer.