For many small businesses, the idea of a generous return policy can seem nerve-wracking when it comes to their bottom line. Whether it’s the idea that unscrupulous customers will take advantage of it via the storied “loan” from a store (buying something, using it, and bringing it back), or the idea that too many returns will wreak havoc on your cash flow reporting, many SMBs traditionally have stuck to more conservative return policies in the past.
Why a clear return policy is a must for ecommerce
But today, that’s slowly changing. With the advent of the internet and ecommerce, a good return policy has become a must-have for many customers who shop online.
And the reasons are obvious: unlike an in-store experience where shoppers get to view, touch, and try on a product, shopping online doesn’t offer access to those decision variables. That means trusting the ecommerce retailer to do right by customers if there’s something off about a shopper’s purchase is imperative to building trust in an online brand.
Take Zappos for example. The online shoe retailer opened in 1999 with a generous return policy and doubled sales every year for at least their first eight years. In year 10 they sold to Amazon for $1.2 billion. And the craziest thing about it? Zappos found out that their most valuable customers where those who returned half their orders.
What brick-and-mortars have learned about returns from the web
But it’s not just online retailers that have seen success with generous return policies. Traditional brick-and-mortar retailers like Nordstrom and LL Bean have grown excellent reputations and loyal customer bases by offering liberal return policies.
Whether in-store, or online, the aforementioned companies have found that a generous return policy does two things:
- A generous return policy creates trust. Trust is a crucial element to any business transaction. Many people experience purchase anxiety—especially on more expensive items. But a generous return policy shows customers that you stand by your products and services, diminishing those fears of buyer’s remorse that many customers experience.
- A generous return policy boosts purchase frequency. Second, a liberal return policy encourages buyers to purchase more things more often. Like the Zappos example above, a good return policy encourages shoppers to spend with you more readily—because they know that if something doesn’t fit or isn’t right, a return is no problem. This kind of great service encourages brand loyalty, and encourages shoppers to return to your store to make another purchase another time because of a smooth return process.
With Clover Online, an easy-to-manage return capability for every small business
While there are certainly costs associated with a generous return policy, many retailers have found these kinds of return policies to be a net positive when it comes to sales and customer loyalty.
But those costs are also exceptionally manageable for SMBs, thanks to today’s integrated, customizable point-of-sale systems.
With Clover Online, for example, managing returns is a cinch. All you have to do is answer a few questions, and your return policy is automatically generated and added to your website. It’s as simple as selecting drop-downs in a short form: Clover Online will do the rest.
Whether you do business online or in-store, or both, if you’re looking to build trust, loyalty, and sales, then adding a stellar return policy is the way for your business to stand head and shoulders above the crowd and create a valuable, loyal customer base that can drive your business for years to come.
With multi-million dollar companies like Zappos, Nordstrom, and LL Bean doing the same, it’s certainly worth considering.
Amir Irani is Director of Product Management at First Data. He manages user experience, product and strategy for Clover Online[image: shop by zoetnet on flickr]
Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.