How to write an eCommerce exchange policy that customers will love
This post originally appeared on ShipBob’s blog.
When it comes to retaining revenue, exchanges are one of the most powerful tools in a retailer’s arsenal. Unfortunately, the opportunity often dissipates because of long and complicated eCommerce exchange policies that push shoppers into requesting refunds instead.
A robust exchange policy helps steer the ship back on course, incentivizing shoppers to exchange an item for what they really want, while retailers get to keep the sale. Let’s take a deeper look at the importance of eCommerce exchanges policies, and review best practices for writing a successful policy of your own.
What is an eCommerce exchange policy?
Often combined with a retailer’s return policy, an eCommerce exchange policy outlines the rules and requirements for making an exchange or return. The policy is where shoppers go to gather information about the exchange window, accepted return conditions, and whether or not there’s a cost associated with an exchange.
Why you (and your customers) need a well thought-out eCommerce exchange policy
Did you know that 67% of shoppers review a retailer’s exchange and return policy prior to making a purchase? The easier the page is to digest, the more likely they will be to spend money.
Exchanges are a central part of the customer experience.
Exchange policies play an important role in the customer journey before the sale even takes place. A good policy gives shoppers confidence to purchase items because they don’t have to fear a bad experience if things don’t work out.
From a post-purchase perspective, clear exchange policies serve as a tool to encourage customers to easily swap out their purchase for something else, instead of asking for their money back. The customer’s experience in both scenarios plays a huge part in shaping their perception of your business.
A great exchange policy makes your life easier
Taking the time to create an explicit exchange policy now will save you trouble in the future. With a clear policy that leaves no room for interpretation, your shoppers know exactly what to expect, reducing the need for angry customer service calls down the line.
With 87% of consumers unlikely to shop with a retailer again after dealing with a painful exchange or return, a great exchange policy is the first step in ensuring a positive post-purchase experience. In fact, 95% of consumers shop from a brand again after a good exchange and return experience.
Build customer loyalty and word of mouth
A good exchange policy doesn’t just prevent a bad customer experience, but actively makes the experience better. Shoppers who feel they’ll be taken care of if their purchases don’t work out are far more likely to buy more in the future.
The joy of effortless exchanges also inspires shoppers to spread the good news to family and friends, or in the form of positive online reviews. It’s a snowball effect that stems from a great policy.
eCommerce exchange policy best practices
In order to increase exchange rates, reduce refunds, and take advantage of the benefits that a great exchange policy provides, there are several best practices to keep in mind. Following are tips for writing an exchange and return policy that sets you up for success.
Give your customers some time
Creating longer windows for shoppers to exchange or return may seem counterintuitive, but it’s a strategy that’s been proven to actually decrease return rates. Allowing longer than the traditional 30-day period creates less urgency for the shopper, removing returns from their top of mind and potentially causing them to forget to return altogether.
Longer exchange and return windows also benefit from the endowment effect, a behavioral theory that suggests consumers form an attachment to something the longer they own it – ultimately making them less likely to want to part with it.
Cover the cost
Entice shoppers to exchange instead of return by covering the cost of exchange shipping. Not only will you save money in the end, but you’ll give shoppers confidence to make a purchase from the beginning. A policy that shows it won’t cost them extra if they change their mind makes customers comfortable taking a chance on a product. No one wants to pay more for something they already don’t want in the first place.
Customize your policy to your audience
Exchange policies aren’t one-size-fits-all, so you shouldn’t just use a template to create one and then hope for the best. Instead, make sure you’re addressing the expectations and needs of your specific customer base.
For example, if you don’t have a brick-and-mortar store for in-person exchanges, consider partnering with other retail locations that host item drop-offs for direct-to-consumer retailers. Shoppers will appreciate you giving them options for whatever exchange method is most convenient, and they’ll spread the word to their friends.
Make sure you’re in full compliance
It’s vital to make sure you’re aware of all laws regarding eCommerce exchanges and returns. While state laws vary, most require you to disclose your policies before a customer makes a purchase.
For example, California retailers are required to post their refund policies clearly, unless they provide a cash refund, exchange, or store credit within one week of the original purchase. If they fail to do this, they’re required to accept full refunds within 30 days of the sale.
Allow your policy to evolve
After creating your exchange policy, don’t forget that it’s not set in stone. Adjust your policy as needed, to better serve your business and your customers. During COVID-19, for example, many retailers extended their exchange windows to accommodate for longer shipping times, and the temporary inability to exchange items in-store. A policy that is updated to help customers during unique or difficult times goes a long way to increase loyalty.
Follow-up with customers
Consider checking in with your shoppers after an exchange to make sure they’re happy with their new product. Not only does this show that you care, but it allows you to stay top of mind and reminds them of the pleasant experience you provided.
Make sure your customer service reps know the policy
A surefire way to upset a shopper is by having a customer service representative contradict what your policy says. Shoppers will be frustrated enough that they have to call customer service in the first place, so a discrepancy between what they hear on the phone and what they read on your site will only add unnecessary fuel to the fire.
Clearly stipulate what merits an exchange and what does not
To avoid conflict and confusion, your policy must be extremely clear about what customers can and cannot exchange. Ambiguous guidelines lead to shoppers thinking they have a right to exchange something that your company doesn’t allow. Language like “damaged” and “unworn” should be included in your exchange policy to paint a clear picture about the condition an item must be in for it to qualify for an exchange.
Exchange policy examples: How 3 top businesses manage exchanges
With the aforementioned best practices in mind, let’s take a look at some examples of retailers who are succeeding with a successful exchange policy.
Glyph
With a beautiful design and clean drop-down menu, Glyph’s exchange policy is an example of a retailer doing it right. Glyph keeps things clear and concise in a Q & A format that answers what the policy is and how to return an item, in one comprehensive sentence each.
Ombraz
Sunglasses-retailer Ombraz makes exchanges easy for its shoppers by listing the directions in three easy steps. The company also avoids confusion by clearly describing the condition an item must be in to be eligible for an exchange. Additionally, it provides instructions for shoppers who want to make an exchange after the policy’s 30-day exchange window has passed, helping the retailer avoid refunds by accommodating exchanges as much as possible.
Cuts Clothing
Realizing that shoppers review exchange and return policies prior to making purchases, Cuts Clothing designed a policy page that takes the guesswork out of exchanges. The men’s t-shirt retailer makes its return methods concise, outlines a simple step-by-step process, and gives one clear call-to-action.
Conclusion
Exchanges are an opportunity to retain revenue, and it all starts with your policy. With a clear, concise policy that is customized to your audience and takes the hassle out of exchanges, you can successfully reduce refunds and keep more sales.
Want to learn more about how to increase your exchange rate? Read our blog, “Say bye to returns: Four simple strategies to raise your exchange rates online.”
Caitlin Roberson
VP of Marketing
Caitlin Roberson is the Vice President of Marketing at Happy Returns. Previously, she served as Director of Enterprise Marketing at Lyft and Partner at top-tier venture capital firm Andreessen Horowitz. Before that, she started and sold a content marketing agency.
