The last thing that any seller wants in their online store is to receive a return and refund request. However, it is inevitable that despite your best efforts to pick the best suppliers for your products and communicate with your clients, they can’t all be satisfied.
For whatever reason, your customer requests a return shipping label; you must know how to handle returns on Shopify, as it can impact the customer service experience for your ecommerce business.
The returns process is complex. I’ve been there, done that. However, I’ve learned a few things from experience about handling many Shopify returns requests while maintaining customer satisfaction.
It is a tricky balance, but I’ll share tips I’ve learned in my online selling journey about managing customer returns efficiently.
Are you ready to ace your Shopify returns and keep your customers happy? Keep reading to find out!
Key Takeaways
- Write a returns and refund policy in your Shopify store to ensure transparency in managing returns and refunds in your business.
- Assess the most common reasons for requesting returns to improve your order fulfillment process and avoid losing more money.
- When writing your returns process rules, you must specify the return window, return shipping costs, and restocking fee.
Why You Need a Refund and Returns Policy in Your Shopify Store
Running an online store on Shopify or elsewhere entails a risk.
That risk is present in any business, whether you have a brick-and-mortar or ecommerce business. And that is a risk involving customer satisfaction, which prompts them to return products to your store.
Returning a product could be due to a quality issue. Maybe your customers were unhappy with the product quality and believe it did not meet their expectations.
Meanwhile, some customers return products because they received the wrong item.
Whatever the reason, you must write a policy for returning items and refunds in your Shopify store. This policy outlines the criteria and considerations when accepting returned products and refunds.
When you create a policy, it provides a black-and-white picture of the conditions surrounding returning items in your store, making it fair for all customers.
What to Consider in The Returns and Exchange Process
Setting up rules for Shopify returns identifies what constitutes a customer’s right to return products to your online store. When this condition applies, customers can file return requests to your Shopify store.
This policy must also indicate the estimated refund for the returned products based on your return rules.
Listing the conditions for the returns will let customers know whether their products qualify for the returns process.
It will also help you control the number of return requests in your store and ensure you can prevent customer returns because they changed their mind or for reasons outside of the criteria.
Your store’s returns policy must include the following: return window, return shipping costs, and restocking fee for the best and most efficient returns experience.
Your returns policy can also indicate what items are exempt from returns, such as final sale items or undergarment products (if you sell clothing and similar items).
Return Window
When you set up the return window for your Shopify store, you will find a preset number of days you can select from the Shopify admin. These numbers range from 14 days to 90 days.
However, depending on your target audience, you can customize the return window for your online store.
The return window starts from the item’s delivery date or when your customer receives the order.
Setting a return window is important because you want to give your customers enough time to inspect the product and evaluate if they want to keep it.
Any item that customers keep for a period longer than the specified time frame for the return window can no longer be accepted even if their reason for requesting a return is valid.
Return Shipping Fees
Your Shopify store’s returns policy must include shipping instructions regarding shipping fees. Again, you can set up the return shipping policy in your Shopify admin dashboard, and there are a few options here.
The first one is to offer free return shipping to your customers. You can also charge a flat return shipping fee, which is charged one-time only. Better yet, you can give your customers the option to buy return shipping labels.
No matter which of the above options you choose for return shipping, it’s important to clearly display the shipping fees on the Shopify returns page.
Restocking Fee
Many Shopify store owners charge customers a restocking fee for returning items. It is an agreement with the store that you will be given a refund for the returned items, but you will be charged this fee accordingly.
The restocking fee is percentage-based, depending on the value of the item the customer ordered.
Exemptions to Shopify Returns and Exchanges
Just as you can set up policies for returns in your Shopify store, it is also important to create exemptions for the products which are not eligible for returns.
A common example is final sale items. If your customer purchases a final sale item, they cannot return it to your store.
You must explicitly state this on the sales page for final sale items so customers are aware before ordering.
In addition, certain product categories are not valid for returns either. It can include but are not limited to the following:
- Undergarments
- Personal care items
- Perishable goods
- Custom products
How to Set Up Returns in Shopify
Now that you know the considerations when setting up returns and how to manage returns in your store, it’s time to begin the returns management setup process.
Go to the Shopify admin and Choose Settings > Policies.
Go to the Return Rules section and click Manage.
In the Return window section, choose the timeframe for accepting returns in your online store. You can choose from the preset days or add your custom timeframe.
Next, go to Return Shipping Cost. Choose how you want to designate return shipping for your customers. If you choose the option to charge a flat rate, input the flat rate in the designated section.
Adding a Restocking fee is optional. If you want to charge it to your returns, click on Change restocking fee and indicate the percentage you want to charge for returns.
Next, you must specify the collections or products that are not eligible for returns. Go to Final sale item exception > Specific collections (or Specific products). Look for the specific collections or products you want to add, and click Done to save the changes made.
Return to the Policies page and click Turn on under the Return Rules section.
Aside from setting up the returns policies for your store, you should always include a written policy on returns and refunds. Setting up the policies using the step above won’t automatically generate a written policy.
Best Practices for Refunds and Returns Management
Even though your customers are intent on returning products to your store, it’s vital to maintain a positive returns experience to maintain customer satisfaction and return status.
How you handle your returns and refund requests in your store can be critical in maintaining a good reputation and ensuring these customers buy from your store again.
1. Initiate an Exchange Process
Accepting returns is not the ideal scenario for ecommerce business owners. When customers return products to your store, it eats away at your profits.
So, how do you maintain profitability even when managing customer returns? Offer an exchange instead.
The reason for offering exchange is simple: you can keep revenue and maintain profit. When customers return items, you don’t lose the sale; you exchange them for other products in your store.
Instead of giving the customer a refund, you can keep your money (albeit some financial losses due to providing shipping return labels issued on the original order), and you can keep some of that profit in your store.
An exchange has less impact on your finances than customers filing return requests and asking for a refund. It helps maintain a positive cash flow and allows customers to try different products from your store.
2. Offer a Store Credit or Discount
I know what you’re thinking: You’re already losing money on returns and refunds, so why would you give a customer a bigger discount?
Customers who have not sworn off your store will give it another chance. This happens even when customers have been buying from the same store for years; they can have a negative experience with a product, or it might not meet their expectations.
The best solution to maintain customer satisfaction is to offer a store credit or a discount. It incentivizes the customer to keep buying from your store.
It could cost you more now to offer a store credit but the lifetime value of winning over your customers back is priceless.
3. Consider Customer Needs and Preferences
Make it a priority to create customer-friendly returns and refund policies. When writing the policy, consider your customers’ needs and preferences.
It starts by assessing the most returned products and the common reasons behind them, such as incorrect sizing, damaged items, or a change of mind.
Based on these insights, you can adjust your returns and refunds policy accordingly to meet your customer’s needs without losing money.
In the case creating returns for damaged items, you can look into your fulfillment process or shipping to determine if this is how damage occurs. Tracing this process is essential to avoid losing money when more customers receive damaged items.
Another way to satisfy your customers with your returns process is to give repeat customers the option for one free return, especially if the reason for requesting returns and refunds meets the eligibility criteria.
Conclusion
Learning how to manage returns and refunds is challenging and complex. As a store owner, it’s the last thing you want to deal with.
However, it is also an opportunity to win over customers and convince them to give your ecommerce business a second chance.
Given the higher customer acquisition cost, you can take your losses now and find ways to win back your customers with a customer-friendly returns management process.
Reduce Returns by Understanding Why They Happen
Want to avoid frequent Shopify returns? Use the Shopify Sales Tracker to analyze your top-performing products and monitor customer behavior across stores. Spot which products are getting refunded most often, uncover better alternatives, and make data-backed decisions to reduce future return rates.