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Set Return Policies That Work for You and the Customer

Hassle a customer when he or she tries to return a purchase, and you'll likely lose a customer for good. On the other hand, there are situations where you may cut off a customer's returns privileges

entirely.

Establishing return policies for a retail establishment can be difficult. Your goal is to be fair and friendly, without letting customers take advantage or commit return fraud. Therefore, you need to strike a balance: setting a clear policy that allows for some flexibility.

To begin, put yourself in the mindset of your customers. They want to feel that they can return a purchase without having to jump over hurdles or feel intimidated. As soon as the process becomes cumbersome or complicated, you risk losing that customer.

Concerns to address when creating a return policy include:

  • Whether to give cash back or store credit
  • The time allowed for returns
  • How to handle broken or damaged merchandise
    Note: It helps to determine the condition in which merchandise must be received; consider assessing a 5 to 25 percent restocking fee for opened items, unless they're defective or such a fee is prohibited by law.
  • Which items, if any, cannot be returned or can only be exchanged for the same item
    Note: This is often done for computers, televisions, cameras and other high-end, popular items.
  • Whether to accept items without a store receipt
    Note: This can depend largely on your industry and merchandise. Gift receipts should be provided for all purchases.
How to Operate a Clean Manufacturing Operation
Interview with Jim Markel of Red Oxx, a Montana-based seller of travel adventure gear.