Returns are a headache for vendors and an inconvenience for consumers. However, they do happen, so make your return and exchange processes as simple as possible. Posting a returns policy in a "can't miss it" location on your site helps ensure that customers understand the refund and exchange rules before they make a purchase. It also provides clear instructions for customers to follow when returns are necessary.

Research Return Policies of E-Commerce Leaders
There's nothing like a little competitive intelligence for helping a small Web merchant who's trying to learn about the Internet economy. Begin by reviewing the return policies of e-commerce leaders such as CDnow and to understand the fundamentals of an effective policy. Then, based on what you learn from your research, work through the following questions to build a framework upon which to base your own return policy:

  • Do the companies you researched take back all merchandise?
  • What are the time limits for returning merchandise?
  • Is there a special return form involved?
  • Is a return authorization number required?
  • Is a receipt required?
  • Is there a restocking fee?
  • Do they pay for return shipping, or is it the customer's responsibility?
  • How do they handle the return of gifts?
  • How do they handle exchanges?
  • If they take international orders, do they have specific instructions for different world regions?

Write Your Return Policy
Using the information you gathered in the Web merchant research process, create a returns policy that includes those elements that are appropriate for your business.

An effective return policy:

  • Spells out precisely what conditions -- if any -- customers must meet to return merchandise -- for example, inclusion of sales receipt, condition of item, and time limits
  • Gives clear, logical instructions on how to return merchandise
  • Provides clear, logical instructions on how to return gifts
  • Gives clear details on how to make exchanges and qualify for refunds
  • Provides contact information, including fax and phone numbers and e-mail addresses

Post Your Return Policy Strategically
Once you've created your return policy, post it in strategic places on your site, such as the customer service center, FAQ page, and "checkout" pages. Posting this information on key areas of your site helps ensure that your customers understand the policy before ordering merchandise and how to return or exchange merchandise that is unsatisfactory.

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