Marketplace Series: Handling Returns

One of the fundamental rules of retail is that returns are an inevitable cost of doing business.

Returns will forever be the bane of retailers who offer them. The gargantuan efforts invested by both retailers and brands can often fall short when a customer ultimately decides to return a purchase.

This said, returns have been a commonplace expectation for customers purchasing online. This means that having a thorough returns and refunds policy is mandatory as part of offering a seamless customer experience.

General Advice

As an online retailer you are ultimately responsible for ensuring that the end-customer has a good purchasing experience from end-to-end. The customer will come to you for reasons both good and bad, and how you handle the bad cases (such as returns) heavily informs their experience overall.

However, this does not mean that you need to be responsible for the actual logistics of facilitating processes such as returns. Depending on the industry and product category, return rates can run as high as 50%! Handling these operations yourself will grow burdensome.

Convictional generally recommends that sellers are responsible for organizing the returns logistics. This may impact your margins (a few percentage points) but it is worthwhile to do so.

Another important aspect of managing returns is setting a threshold for the number of orders that a certain product or seller can have overall. Frequently returned products are indicative that customers are not satisfied with their purchases, which could be cause to remove a SKU or seller from your catalogue.

Sample Legal Terms

Below are sample legal terms that can be used as a template for your own contracts:

[Brand Name] agrees to accept all returns and exchanges requested by customers of [Retailer Name] based on return policy outlined on [Brand Name]’s website or other online documentation. [Brand Name] agrees not to list any products that are non refundable or final sale items, unless otherwise approved by [Retailer Name].

Sample Returns Policy

Below is a sample shipping policy bullets that can be used to build out your own policies:

• Not happy with your purchase? Email us at customer service within XX days of purchase for a store credit or, in the case of a faulty, defective or incorrect item(s), a full refund.
• [Brand Name] accepts returns on purchases that are damaged, defective or incorrect (i.e., if you receive an item that is not in perfect condition).
• In the event that your order arrives damaged, defective or incorrect, email a return request to [Brand Name] Customer Service. Please include a picture displaying the damaged product to be returned.
• To return a product, please email e-mail [Brand Name] Customer Service at customer service requesting the return. Please include the order number number in the subject line and both the item received and the reason for the return in the body of the email.
• If the vendor approves the return request, we will issue a return authorization number and a packing label for you to use in order to ship back the returned product.
• In order for the imperfect item to be eligible for a return, the customer must notify [Brand Name]  within XX days of receiving the order. Damaged items must be returned within XX days from receipt of delivery of merchandise. Please return items in their original packaging.
• If the recipient would like to return a gift, he/she must notify [Brand Name] Customer Service by email at customer service within XX days of receiving the order, indicating the order number in the subject line of the email. For these items, [Brand Name] offers store credit with free return charge.
• Damaged or defective items must be returned within XX days from receipt of delivery of merchandise. Please return items in their original packaging.

Implementation

A thorough returns policy is all but mandatory when building out your marketplace. Formalizing your return policies with sellers and customers brings an increased level of credibility and trust across all parties.

Similarly to shipping policy, having a returns policy is only useful to the extent it is measured and upheld. Embedding your baseline expectations as part of your Seller SLAs helps ensure that the products more frequently satisfy customer needs.