What is a Return/Refund Policy
A Return and Refund Policy is the agreement where you inform customers about your policies regarding returns and refunds.
It usually includes the following pieces of information:
- How many days they have to return a product
- How will they receive the refund (credit or replacement)
- If you offer refunds for digital products or in-app purchases
- Who pays for shipping to return the product
- And so on
FAQ: Return Policy for Ecommerce Stores
Here is a list of frequently asked questions that you may find useful.
While there isn’t a law requiring ecommerce stores to have a Return Policy, you may need one if you wish to enforce your terms and parameters of returns and refunds.
For example, in the state of New York, if a retailer does not provide a Return & Refund Policy, the retailer will be required to accept returns and give refunds for all merchandise returned within 30 days of purchase. If you wish to limit this in any way, you will need to create and post a Return Policy with your own custom terms.
Another reason for having a Return Policy even if not required by law is that most consumers prefer to shop at retailers with a clearly-posted Return Policy. This is especially important when shopping online, as more issues are likely when purchasing something without being able to see it in person first.
If you don’t have a Return Policy, you may be at the mercy of state laws regulating return and refund timeframes. You may also lose potential customers who are concerned about not being able to return a product if they need or want to.
There are two main benefits to having a Return Policy.
First, you will be able to control your return terms. If you don’t post a Return Policy, some laws require you to provide a minimum timeframe to accept all returns.
Secondly, you will gain the confidence of potential customers and convert more sales. Shoppers are far more likely to do business with companies that have and post a Return Policy.
Your Return Policy should include the following information:
- How many days customers have to initiate a return
- How they should initiate a return
- Conditions of returns (must be unworn, in original packaging, etc.)
- Restrictions on returnable items (no returns on software or undergarments, etc.)
- What form you provide a refund in (original form of payment, store credit only, etc.)
- What party pays return shipping costs
- If you have any restocking or other fees you deduct from refunds
You should display your Return Policy as a link in your website footer along with your other important legal agreements and policies.
You should also add a short paragraph to your Terms and Conditions agreement where you summarize your Return Policy and link to the full policy.
You may want to add a link to your Return Policy at the final checkout screen so users have another chance to review your policy before finalizing the purchase.
You do not need to get agreement to your Return Policy to enforce it. Simply posting it will be enough to make your policy enforceable.
However, if you want to go above and beyond to make sure your bases are covered, you can add an unticked checkbox to the final checkout screen of your ecommerce store that users will have to check to show they “Agree to your Return Policy.”
Also, by including your Refund Policy in your Terms and Conditions agreement and getting agreement from customers to be bound by your terms, you’re by default getting agreement to your Refund Policy since it’s part of the Terms and Conditions.
Why use a Return/Refund Policy
Most e-commerce stores should have a Return or Refund Policy. This includes retail stores as well.
Customers must be informed about their rights to refunds. This “policy” is the page where businesses inform customers about their policy on return and refunds.
The Policy is part of the 3 legal agreements your e-commerce business should have:
- The “Return and Refund Policy”. Use this agreement to inform users about your policy on returns and refunds.
If you collect any kind of personal data from your users (e.g. email addresses, first and last names), you’re required by law to have this agreement.
- The “Terms and Conditions” agreement.This is optional but recommended. Use this agreement to set the rules and guidelines for users when they register an account with you.
You could add the Return and Refund Policy in your Terms and Conditions rather than having a separate agreement on returns.
What to include in Return/Refund Policy
Your Return Policy or Refund Policy should include at least the following sections:
- The numbers of days a customer can notify you for wanting to return an item after they received it
- What kind of refund you will give to the customer after the item is returned: another similar product, a store credit, etc.
- Who will pay for the return shipping
If you sell digital products, the Policy should include the following sections:
- If you offer refunds on digital purchases
- If you offer refunds in limited cases, e.g. download link wasn’t working