4 Elements of a Successful Holiday Return Policy for Online Businesses

Wrapping paper revealing the 411 on a holiday return policy

With the hum of the holidays behind us, the month of January ushers in returns season. Shoppers across the U.S. have rushed back to stores to return the gifts they didn’t want. Since it’s also the start of a new year, this “season” syncs up with online businesses looking at ways they can do things better and bring in more money.

With so many purchases made online this Christmas season, retailers face new challenges with their return policy. Today’s customers expect a convenient shopping experience, extending all the way to the returns process. But how can retailers maintain top-quality customer service while also meeting their bottom line? Here are a few things to consider as you rethink your store’s holiday return policy in 2016.

Returns Breed Return Customers

 Since companies like Nordstrom and L.L. Bean have recently created winning return experiences, consumer expectations have heated up. The returns process has turned into a great opportunity for brands to ensure repeat visits from customers, whether it’s online or at brick-and-mortar locations. Unfortunately, this puts retailers in a difficult position because there will be customers who wrongfully take advantage of flexible return policies. Businesses must weigh the money they’ll lose through return fraud against the money they’ll lose to consumers who refuse to do business with inflexible retailers.

Customers Want Convenience

 Online shopping brings a high level of convenience to shoppers during the months of November and December. However, 64 percent of shoppers still prefer in-store returns to online ones. For retailers that have both online and brick-and-mortar shopping options, this means allowing online purchases to be returned in-store. Most major retailers now allow this, leading customers to expect it from smaller stores, as well.

Customers Want Privacy

 Within reason, businesses have the right to set any return policy they want, as long as it is communicated to the customer at the time of checkout. But, be wary of setting a policy that alienates customers. For example, the Toys“R”Us decision to scan and retain copies of customers’ driver’s licenses demonstrates the privacy concerns many customers have. Before you make a decision to collect and store customer information as part of your return policy, make sure you’re prepared for possible pushback from customers.

Have a Heart

 Instead of the traditional return policy, online businesses are finding creative ways to handle customer returns. Both Zappos and Zulily told customers to pass their unwanted items to those in need rather than shipping them back. The customers were refunded and, in the latter case, news of the company’s generosity went viral.

One alternative for many businesses is to implement seasonal return policies that are more flexible versions than those they maintain the rest of the year. However, it’s important to include information about your seasonal adjustments on your website and in-store signage during the crucial weeks that the special policy is in place. You should also be sure to allow plenty of time after the holiday season for items purchased during the months of November and December to be returned, if needed. Otherwise, you risk angering people who wait too long after the holiday to bring their items back.

Make sure your return policy is in tip-top shape as you kick off 2016, or risk losing money to competitors with more preferable protocols.

For more tips to gain and retain customers, check out our business growth strategies page.

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