7 Key Reasons for Having a Good Return and Refund Policy

It is not a surprise that the customer returns are not your favorite part during the running of your e-commerce store or any shop. However, they are part of the retail sales. Regardless of this, the United States federal government has passed no law needing return and refund policy. It doesn’t mean that you shouldn’t prioritize it.

There are many reasons for you to have and display a refund policy for your respective customers. This article will look into those reasons and highlight their importance.

Top 7 Reasons to Have a Good Return and Refund Policy

1. Create Customer’s Trust

Nowadays, when customers access your website or application, they expect to look for a considerable return policy that lays out all of your store’s terms. If people do not see an effective return or refund procedure in a shop, they tend not to shop there.

The refund policy creates a feeling of security for the customers. If the procedures are displayed at your shop, they will get inclined to your business. If the customer cannot find your respective policies, they will no longer trust your store. As they will be fearful about not being able to return a purchased item, they will start making purchases in other shops.

If you want to build your customer’s trust, display your return and refund policy on your respective websites. Customers will appreciate your direct approach regarding your shop’s products. A shop’s website owner displays the policies on the website footer. This is an effective marketing strategy to meet the customer’s expectations and build their trust.

2. Improve on Your Sales and Attract Customers

improve store sales

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You may not have realized that a refund policy will do wonders for your marketing strategies, but showing this policy will maximize your sales as a high percentage of customers look for them.

According to the Narvar Consumer Survey, 49% of the customers look for the policies before buying anything in a particular shop or store. If a customer understands the shop’s return or refund procedures, he is likely to purchase from there.

The refund policy ensures to the customers that either the purchased product will be good enough or they will return the product to get their money back. If a seller is providing the option of returning the product amidst non-satisfaction shows that the quality of products is ideal.

Hence, your return and refund policy is an ideal marketing asset that shows the trust that you have in your products. It shows the trust that your customers have in your business.

There is a minority of business owners that do not welcome the idea of these policies. They do not realize that it will harm their business. Therefore, they should embrace these policies and use them to attract new customers to their business.

Display your return procedures and look for any benefit that you can gain from them. For example, bring ease within your process to encourage more customers to buy from your shop. The Narvar Consumer Survey also highlighted that 95% of the customers will return to the shop if satisfied with the shop’s returning procedure.

3. Handle the Customer’s Expectations

build customer relationship

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It is essential to prioritize your customer’s expectations from the start to avoid any misunderstandings or miscommunication. Customers can identify all the details before making a purchase from a shop, such as the duration for returns and the option of stocking fees.

For example, if you own a gaming store, your return and refund policy can say that the products must be in original packaging, and wires cannot be returned for hygiene reasons. This will answer all the customer’s queries regarding the product. There won’t be any arguments about the customer being willing to return the wires for replacement.

The gaming console sellers around the world have stated that wires cannot be returned, as part of the shop’s policies. This information enables them to manage expectations and clear any misunderstandings with the customers. Many other console sellers have highlighted the items that can be returned, which creates guidelines for their customers.

Overall, you should be pragmatic and certain regarding your shop’s policies, which will enable the customers to remain satisfied.

4. Save Time for Yourself and Your Customers

If you are not displaying your shop’s refund policy on the website, customers either will walk away or will start contacting you frequently. Because of the lack of information, they will ask all the questions regarding purchases, exchanges, and refund procedures.

This incompetence will cost your business crucial time, as the customers will be on the phone and asking the same questions repeatedly. It will irritate your customers as they have to wait for your response rather than finding the information at the shop or the website. When the time comes for you to respond, they may have done their purchasing from another shop.

To cover this negligence, show your policies appropriately on your website. This strategy will enable the answering of all the customer’s questions without being in contact with you.

5. Follow All the Other Rules

Although there are no federal laws associated with the refund policies, there are a few state laws that ensure the requirement of these policies in businesses. For example, if your shop does not have any required policy, you must have a privacy policy.

important privacy policy

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According to Florida state law, there should be a clear sign of ‘no refund’ if a shop is not providing any refunding facilities. If there is any business that doesn’t correspond to this requirement, a notice by the state law will be issued to refund within a week to any customer that returns an unused product with the correct receipt.

The Florida state law suggests that the refund policy is in place. If there is no such policy, there should be a displayed sign on the shop, which warns the customers that there are no returns available.

You should look into the policies of other countries if you are looking to sell products outside your country. For example, if you wish to sell your products in the United Kingdom, you must know the Consumer Protection from Unfair Trading Regulations. This strategy tells the retailers to display their policies on their platforms. They do not welcome the idea of sellers not offering refunds and only offering exchanges.

6. Professionalism

a professional business


It is all about how great a professional you are when you conduct your business. If you display your refund policy alongside the privacy policy and terms of conditions agreement, it will give positive signs to your customers.

This professionalism will help your business across all fronts. It will help the small businesses who are new to this world and are trying to build customer loyalty. People are more likely to purchase from those shops that have all the policies displayed on their websites. They will see that shop like the one that contains professional retailers.

7. Try to Stop Fraudulent Returns

fraudulent refund policy

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If you do not have the refund policy at your disposal but allow returns, it will be difficult for you to minimize the fraudulent returns. To stop these returns, you can issue a statement, suggesting that you visualize the returns properly.

The aim is not to create disharmony with the trusted customers or the ones who want to buy products. Simply, it is a step against those customers who are always looking to return the item.

For example, a customer can buy a shirt for a function, wear the shirt for that function, and then will try to return the worn shirt to the shop that he had bought it from. It is ideal if you have a tracking history of these customers so you can get rid of such unprofessional behavior in the future.

There are many suggestions from e-commerce stores around the world. Some stores have started the ‘No Quibble Return Policy’, which enables the retailers to monitor items that are returned within 30 days. This development will enable the customers not to abuse the system.

Even though there is no need to be articulate about your approach, it will give a warning to the targeted customers you should not be messed with.


Conclusively, if you look into the great refund policies around the world, they attract customers towards their shop for buying purposes. The customers fully trust those respective brands. Those policies can also be part of an effective marketing strategy to increase customers and maximize sales.

A refund policy like this will ensure that there are no misunderstandings between both parties, and both of them know their roles. If you are new to the world of refund or return policies, you must place your trust in an appropriate order management system like Strikingly.