Why a Customer Friendly Return Policy Is a Must-Have

by Thom Tracy

2 min read

Returns are a thorn in the side for any retail business. Not only does a return take a sale off the books, but unfortunately, customers who take advantage of retailers do exist. They exploit liberal return policies by bringing back items after they’ve used them, effectively renting the items for free.

As a result, it is tempting to put in place a more restrictive retail return policy that protects your small business and your merchandise. In the long run, a more customer-friendly policy benefits you more. Being generous with returns engenders customer trust, encourages repeat business, and makes customers feel more at ease with higher-ticket purchases.

Building Customer Trust

It can take some time to build a customer’s trust when they’re new to your business. Even with up-front pricing and excellent customer service, it is natural for a customer to be reticent at first, particularly if your business sells big-ticket items. What if the item doesn’t work like the customer expects it to, or they aren’t satisfied with the level of service you offer after the sale? These are the kinds of questions that swirl in a new customer’s mind.

A customer-friendly return policy mitigates some of their apprehension by reducing the risk of doing business with you. If they know they can bring an item back for a full refund with no questions asked, they have less reason not to pull the trigger. In a sense, a new customer trusts you more with a lenient return policy, as you’ve left yourself less room to take their money without meeting their needs.

Encourage Repeat Purchases

Repeat purchases are the lifeblood of a successful retail operation. Otherwise, you’re constantly having to scrounge for new customers. However, to get repeat business, you have to convince customers to buy from you for the first time. Only then do you get the chance to wow them with a fantastic buying experience and stellar customer service.

When a new customer takes a chance on you because your return policy lessens or eliminates their risk, you get the chance to forge a relationship that leads to repeat business as well as potential referral business when they tell their friends and associates about you.

Facilitate Big-Ticket Buying

A customer-friendly return policy is vital if you’re a new business that sells big ticket items. Convincing customers to move their business from an established competitor to your company is fraught with difficulty. Even if they aren’t crazy about their current provider, at least they’ve been through the process with that company before and are familiar with how it works. By switching to your business, they’re thrown into the unknown — something that most people naturally fear.

This is yet another situation where a lenient return policy sweetens the pot for your customers and entices them to take a chance. What do they have to lose? If they aren’t satisfied, they can return what they bought and take their business back to your competitor.

References & Resources

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