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After the holiday shopping rush, it’s time for the next chapter: the season of holiday returns. The goals for a good return policy are to “minimize your cost of processes and optimize the customer service value,” said James Stock, co-director the Monica Wooden Center for Supply Chain Management & Sustainability at the University of South Florida’s Muma College of Business. Here are Stock’s top tips for navigating this period.
A lot of small businesses don’t specifically state their return processes, and that’s a recipe for headaches down the line. “Clearly outline the time frame, conditions and processes for your return policy,” Stock said. And post them clearly in your store, on your website and even on receipts. The more upfront you are, the fewer difficulties you face later.
In non-holiday times, many maintain a 15- or 30-day return policy. This might not sync well with the winter gift-buying time line. “Think about Black Friday sales,” Stock said. “If items purchased during this time are meant for Christmas, that’s over a month away. A 30-day return policy is not going to help very much.” For optimal customer service, he suggested extending the policy to 60 days during the holiday season, a considerate touch that elevates the entire shopping experience and demonstrates a dedication to customer happiness.
Customers often get frustrated when dealing with returns, especially if they have to wait in long lines or face a barrage of questions about why they’re returning something. Stock explained: “Customers want an easy, friendly way to get a refund quickly.” A smooth and enjoyable experience significantly increases the chances customers will come back, Stock said. “I get coupons from places like Jiffy Lube and other places all the time. I throw them all away. I’ve got this great mechanic who does stuff at a reasonable price and I get it back at a reasonable time, so why should I be going from place to place to get a few dollars in savings at some other shop? He added: “The value of a lifetime customer is immeasurable.”
Stock leans toward refunds rather than store credit whenever possible to improve customer satisfaction. Refunds offer instant gratification and can shape significantly how customers view your business, encouraging them to return, he said. Yet, he acknowledges the practical side of offering store credit instead of refunds, particularly when preserving available cash is vital. “You can’t be overly generous to the point where it ends up hurting you,” he said. “You have to make money to stay in business.”
The success of a return policy depends heavily on your employees. If they aren’t familiar with the policies, delays at the counter can leave everyone frustrated. Subpar training also can cause financial losses, as employees might approve unauthorized returns unknowingly, creating opportunities for internal or external theft and financial harm to the business. That’s why it’s best to be prepared well in advance of the seasonal rush, Stock said.
Tackle returns fast, Stock said. You don’t want items hanging around — not selling or moving. Here are a few common ways to handle returned items:
“You’ve got to know what your customers want,” Stock said. Analyze customer feedback, understand the returned items and pinpoint the reasons behind those returns. This data holds immense value for making informed decisions in the future. Ultimately, the most effective strategy to minimize returns is to offer exactly what your customers are seeking from the start.
By Rebecca Meiser
Contributor, Commerce + Communities Today and Small Business Center
ICSC champions small and emerging businesses in getting from business plan to brick-and-mortar.
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