How to write a return policy for small business owners

Returns are a necessary part of running an ecommerce business. Most customers won’t read a business’s return policy until they need to, but when they do check it, it should be clear. This helps your customers feel protected – and helps protect your business too.

A clear and well-written return policy will make sure your customers know exactly when and how they need to return goods, and in what condition. This reduces confusion for them and makes sure unwanted products are returned to your business quickly. It also builds trust with customers, who want clarity when it comes to returns and refunds.

Understanding your business needs

The main objectives of this policy are to set expectations for customers, and to ensure that refunds are given under the right circumstances. Without a clear return policy, businesses could find themselves dealing with refund requests months, or even years, after a customer has made a purchase and when the item is no longer resalable. This could have a significant impact on your business’s profits and take valuable time and energy to manage.

Consider the nature of the products your business sells. Some products are easy to return without damage, but others are perishable. Some products, like underwear and swimwear, would be unhygienic to return. Look at existing industry standards and what return policies your competitors offer. For example, many clothing retailers offer 30-day return policies. It may be beneficial to offer similar policies to other businesses in your industry to stay competitive.

Key elements of an effective return policy

A comprehensive small business return policy outlines the rules of a return, exchange, and refund for customers shopping with a business. It will outline how many days they have to return their products, what condition the product should be in, packaging or labels that must be included, how to send the products back, and when they’ll receive their refund. It will also state if, and when, customers won’t receive a refund.

Your business’ customers will appreciate a clear and transparent return process, and it will save time for your returns team too. Many customers will feel more comfortable shopping with your business if these essential elements are outlined clearly, and they know they can easily return an item if it’s damaged, doesn’t fit, or they change their minds.

Writing your return policy

Your business’ return policy should be written in natural and straightforward language so customers can quickly find what they need to know. Additionally, a return policy is a legal document, so it should state legal requirements, which protect both your business and consumer rights.

Your business can elaborate on any questions your customers might have in the website FAQs. This is a great place to answer common questions about returns and put customers’ minds at ease.

Communicating the return policy

Once your small business refund policy is written it should be displayed prominently on your website and be easy for customers to access and read. You could also send a copy along with the products you ship and include it in order confirmation emails.

Your business’ customer support team should be familiar with the terms of the return policy and have a copy to refer to.

Handling returns and refunds

Returning items can be a hassle, so the easier it is to understand your policy, the better. As well as making sure the return policy terms are clear, it’s essential your customer service team can handle returns quickly when they arrive. Slow refunds and complex exchanges can generate poor reviews and unhappy customers.

Keeping track of return-related data for analysis will help your business understand what’s being returned and why, and how you can reduce returns.

Return policy cheat sheet

Every small business return policy is slightly different, and every business has its own logistics processes to consider. These are the essential points to include:

• The products that can be returned and/or exchanged
• Any circumstances where products can’t be returned (including final sale items)
• How long customers have to return products (14 days, 30 days, etc.)
• What condition products need to be in (with tags, in original packaging, etc.)
• How customers can return their goods

IKEA has an informative returns hub and a very generous 365-day return policy that covers how to return unopened products, which products can’t be returned, and what customers need to know about getting their refund¹. The return policy also includes specific information for customers buying mattresses, which have a shorter returns policy.

Apple also has a clear and helpful return policy, but a much shorter return window of 14 days². It gives the customer clear expectations and includes a straightforward guide to returning unwanted or faulty products.

Create your return policy with customers in mind

It’s incredibly important for small businesses to have a customer-centric return policy. This helps shoppers feel reassured and minimizes the chances of them feeling unhappy or short-changed.

A return policy isn't just a legal defense; it's a way to showcase your brand's values. Take advantage of this opportunity to elevate your business by crafting a return policy that resonates with your audience, encourages repeat purchases, and sets you apart in the world of customer service.