Customers’ orders may have disappointed them for a variety of reasons, including that they received a damaged item, ordered the incorrect size, or that it didn’t live up to their expectations. As an alternative, many consumers will buy numerous variations of the same product—for example, the same pair of jeans in various sizes—to test them out at home. This procedure, known as “bracketing,” has increased in popularity since the pandemic.

These requests can consume a lot of time, effort, and money without a proper system for handling returns, including a clear return policy, with hours spent on emails to customer service and increases in shipping costs for replacement products, particularly after the holidays.

The good news is that there is never a wrong time to solve a problem. Returns can transform from a dreaded task into an opportunity that generates new profits and boosts customer loyalty with a great return policy and the right system in place.

Before we discuss why it’s crucial to get returns right, let’s talk about how to write a return policy for your store and put in place a system to handle requests.

A retailer establishes return policies to control how customers return and exchange unwanted products they’ve purchased. Return policies explain to customers what products they can return and why, as well as the time period during which returns are accepted.

Every major retailer offers return and refund policies to their customers, from Apple’s strict 14-day return policy to IKEA’s generous 365-day turnaround. Your small business should do the same.

Having a fair return and exchange policy fosters customer confidence in a company. In fact, providing a simple, consistent process for customers to return a product they’ve purchased can boost conversion and repeat business.

Giving customers a full refund on their orders may result in a loss of profitability, and business owners who fervently believe in the virtues of their goods and services may find it discouraging to learn that a customer disapproved of their goods.

Due to these factors, it may be tempting to forego developing a thorough return and refund policy and ignore the growing issue. As you’ll see, however, this would be a mistake.

Return and Refund Policy Template

https://termly.io/resources/templates/return-policy-template/

Create your own return and refund policy using our sample return policy templates and examples. Download and customize for free!

How To Write a Return Policy (+ Free Template) (2023)

https://www.shopify.com/blog/return-policy

A return policy is a set of rules a retailer creates to manage how customers return and exchange unwanted merchandise they’ve purchased. Return

Is there a difference between a return policy and refund policy?

A return policy outlines the terms and conditions that govern whether, when, and how long customers can return items for a refund. It details the items that are covered by the policy and the amount of time your customer has to make the return.

A refund policy outlines when and how customers are eligible to be reimbursed for their purchases, without having to wait for a return. For instance, your refund policy should specify whether a customer is eligible for a refund if they received a defective or damaged item or if their order never arrived.

Additionally, you may decide to establish an exchange policy with your clients. The terms of your exchange program specify whether a customer can request store credit, a replacement item, or a new item of equal or lower value instead of a refund.

You decide whether your company needs a single policy outlining all rules for exchanges, refunds, and returns or whether you want to divide them into three distinct documents.

Most online businesses use return, refund, and exchange clauses to make it simple for customers to find the guidelines for each procedure. They also outline these customer services in a single policy.

However, since a specialty or small business return policy, exchange policy, and refund policy may end up being longer than usual, separating them may be your best option.

In either case, you can completely customize our free refund and return policy template to meet your particular business needs.

Check out and share our helpful return policy inforgraphic:

Anyone who sells directly to customers, whether online or in person, must have a return policy, which should include:

• Small businesses
• Ecommerce websites
• Retail stores
• Dropshipping companies
• Software as a Service (SaaS) businesses

Your competitors, no doubt, already offer refunds, returns, and exchanges. This is standard practice, and if you don’t offer a return policy, customers will likely choose one of your rivals who does.

More and more customers are choosing to shop online as the digital market expands. This results in a higher proportion of returns, exchanges, and refunds.

Below, see some recent statistics from the National Retail Federation (NRF) to learn how this impacts businesses like yours.

• US retailers lost $761 billion in sales in 2021 as a result of returns.
• 20.8% of sales from online merchandise were returned
• 10.6% of online returns were fraudulent

The following retail categories had the highest return rates, per the survey:

• Auto parts: 19.4%
• Apparel: 12.2%
• Home improvement: 11.5%
• Housewares: 11.5%
• Department stores: 11.4%
• Footwear: 9.1%
• Sporting goods: 7.6%
• Beauty: 4.3%

No matter what sector of the economy your company operates in, you should anticipate customer requests for product returns, exchanges, or refunds.

Including a thorough return policy with refund and exchange provisions on your website helps safeguard your company against fraudulent returns and fosters consumer confidence in you.

Although you are not required by law to have a return policy, there are laws and rules about a customer’s right to a refund that apply in some circumstances around the world.

If you market to customers in the UK or all of Europe, for instance, refunds are mandated by law if the product is:

Australia, the US, and Canada, on the other hand, do not call for companies to provide returns on any goods.

However, certain US states have laws in place that require you to post a prominent policy if you plan to refuse refunds. The customer is entitled to a refund within specific timeframes and with proof of purchase if you do not post a policy specifying otherwise.

Check out the table below for those state requirements.

If you operate a brick-and-mortar store in the US, keep in mind that state laws are subject to frequent change and that you should research any local consumer protection laws that may have an effect on how your company manages its return policy.

Some regions of the world have laws requiring return policies, which may have an impact on what you can and cannot include in your policy.

For instance, if a purchased item is defective or does not function as promised, you are required by European Union (EU) regulations to repair, replace, lower the price of, or refund the customer.

Even if you only sell your products online, you must still provide customers with a free, minimum 2-year guarantee. In some EU countries, the warranty is even longer.

Additionally, the EU mandates that you provide consumers with a 14-day cooling-off period following a purchase. To put it another way, your customers have the option to return a purchase for a full refund within 14 days for any reason, with the following exceptions:

• Travel and event tickets
• Goods and drinks delivered to a consumer regularly
• Made-to-order or personalized goods
• encrypts audio, video, or computer software, which the buyer decrypts after purchase.
• Purchasing a good from a private individual as opposed to a business
• urgent maintenance and repairs (consumers cannot ask an electrician to make a return after they have made a repair)

Similar to EU regulations, UK employers are also required to provide consumers with a 14-day cooling-off period. In the UK, if a customer accepts an item but later discovers that it is defective, they have the right to request that you fix or replace it.

Your customers have up to 6 years in the UK to file a claim for merchandise they purchased from you.

If you conduct business in the EU or the UK, you are required to abide by these return policy rules.

A well-thought-out return policy is advantageous for your business and the client because:

• Safeguarding your business from potential legal backlash
• Increasing customer satisfaction
• Protecting your business from complaints

Let’s discuss these benefits of the return policy in more detail.

The laws governing store policies in the US are under the control of the Federal Trade Commission (FTC) and various state governments.

If you run a physical store in any of the states listed in the table above, you can avoid using the laws’ standard return procedures by posting your company’s return policy in a prominent place.

Your company would be required to issue refunds if you don’t post your own policy, and if you don’t, customers might take legal action against you if you don’t.

A favorable return policy boosts client satisfaction because it reduces their sense of risk when making a purchase from you.

For instance, if your return policy permits them to receive a full refund if they are dissatisfied with the goods or service, new customers are more likely to make a purchase, increasing your sales.

Additionally, it fosters transparency and trust between your company and customers, increasing customer retention and lowering your risk of receiving fraudulent returns.

A thorough return and refund policy also shields your business from extremely unhappy clients or those who might react angrily.

Referring specifically to your return policy can help you or your customer service team de-escalate, neutralize, and minimize uncomfortable or volatile reactions from a small minority of customers.

Every procedure you intend to implement regarding product exchanges, returns, refunds, and warranties should be outlined in your return and refund policy.

The following provisions are most frequently found in a typical return policy:

If you accept returned items, state this in the policy’s first few clauses for prospective customers.

If you do accept returns, let your customers know how to properly complete one. Clearly state if the item needs to be unopened, in original packaging, with tags, and any other guidelines, like how Patagonia outlines their return policy, pictured below.

Your return policy should contain details about your refund procedures. Inform clients whether they receive full, partial, or no refunds for the products they wish to return.

You should also mention if you offer store credit as a refund option. A good example comes from Walmart. They cover all refund information in the ‘How to get your refund’ clause in their return policy, pictured below.

Customers should know whether they can exchange items and, if so, under what circumstances.

For instance, if someone needs clothing in a size other than what they originally ordered, you might offer clothing exchanges.

The screenshot below shows how Patagonia informs customers about exchanges in a manner that is distinct from their return policy.

Ensure that your customer is aware of any restrictions you may have, such as the need for the item to be in its original packaging or have tags attached.

You may have restrictions, exclusions, or provide warranties on your products depending on the goods and services you sell.

Any requirements for procedures like refunding damaged goods or exchanging incorrect items should be specified.

For example, in Casper’s return policy, they stipulate that items can be returned without original packaging, even if they’re already assembled, as seen in the highlighted text pictured below.

If your company operates in several different regions and has different return policies depending on the location of the customer, be sure to mention any geographic restrictions.

Give your customers advance notice if any products you sell, such as swimwear or perishables, are not eligible for returns.

If you provide warranties for any products, be sure to specify the terms and conditions and think about including a warranty disclaimer. Some companies decide to directly incorporate their warranty policy into their e-commerce terms and conditions.

Inform clients of the amount of time they have to ask for and complete a refund, return, or exchange. Like Patagonia does in the image below, you should also mention how long it will take for them to receive their exchanged item or refund.

Like Patagonia did in the preceding example, if COVID-19 affects your shipping times, you should also mention that information in this section of your return policy.

Include a sentence stating who is in charge of paying shipping and handling expenses: the client or the business.

For example, in American Eagle’s return policy, they state that items that do not qualify for free returns result in a $5 charge.

Similarly, include any restocking fees you assess in the policy if you do. In addition to a return policy, many businesses also create a separate shipping policy. With our free shipping policy template, you can do the same.

Returns can be challenging if you sell to a global market. Learn about local laws in the countries where you conduct business, such as the UK, where returns are required by law.

Amazon ships packages all over the world, so it makes sense for them to separate their information about international returns into its own policy, as seen below.

If you work internationally, you should also take shipping costs and times into account. For instance, if shipping times to or from particular regions are prolonged, it might be simpler for both your company and the customer to issue a refund without receiving the item.

If a download link is broken, business owners who sell digital products should set up a procedure for customer support. You should specify whether you permit refunds for digital purchases as well.

Microsoft includes information about eligible returns and exclusions on digital products in their return policy within a small note.

Your return policy should be prominently displayed so that both new and returning customers can easily find it. Posting your return policy in several places is in your best interest.

The footer of an e-commerce website is where return policies are most frequently published, making it easy for customers to access it whenever they are on the page.

For an illustration of a return policy that is directly linked in the help section of the website footer, go to Patagonia.

Before a customer completes the checkout process and completes the purchase, you might want to display your return policy somewhere so they can read the process beforehand.

If someone complains or tries to claim they could not find it, you can also, if necessary, point them to the link. Even though customer reactions like this are uncommon, they do occasionally occur, so it’s best for your business to be ready

In your terms and conditions agreement, take into account adding a link to your return policy as well. It makes sense to include your refund policy in this policy as it is a requirement of your services that users should be aware of if they wish to engage your services.

Any emails you send to customers should have a link to your return policy in the footer, especially if it’s a purchase confirmation or shipment tracking email. This is not only practical for your customers, but it also ensures that they are aware of the return and refund policies your business upholds.

Return and refund guidelines are typically posted near the cash registers, by the entrance and exit, and even in the changing rooms of physical stores.

Keep in mind to research local laws, such as those listed in the table above for the US states, that may dictate where you post a return policy in a physical store.

Making a privacy center on your website is a great way to organize all of your legal agreements and privacy documents.

Links to other useful documents that users should always be able to access, like your return policy, can be included in your privacy center. Even though it isn’t technically a privacy document, you still want your customers to always be able to access it.

Tips To Make the Most of Your Return and Refund Policy

A return policy is a crucial document that can help you keep customers and increase consumer trust in your company.

Use these simple suggestions to make your business’ return policy stand out from the competition.

You want your return policy to be simple to read, and you can do that by using our guide on how to write a return policy.

So that your customers can understand your company’s policies, avoid using lengthy paragraphs and unnecessary legalese. Additionally, it makes it simpler for you to refer to the return policy in the future.

Download our free Return and Refund Policy Template at any time. Our legal team created it to be simple and straightforward.

Legally, you can implement a no-refund policy or one very similar to all sales are final.

However, many companies with these strict policies lose clients to rivals who offer more lenient return policies. Online retailers are significantly impacted by “no refund” clauses because customers purchase products without seeing them, increasing the risk of the transaction.

Customers might also criticize your policies online or act irrationally when contacting your customer service department.

Instead, you might provide at least store credit, which might help you keep and placate a few of those clients.

Customers are encouraged to complete the purchase by a money-back guarantee, especially if you sell digital goods or operate an online store.

Offering a no-questions-asked, full refund policy could help you stand out from the competition.

Additionally, it increases customer confidence in you and lowers any risk first-time customers may feel when making a purchase from you.

No matter what, do not copy another business’s return policy. This is not only plagiarism, but you won’t be familiar with all aspects of the policy.

Making a thorough policy for your company using a refund policy template is simple and many of them are free.

Although you shouldn’t copy another company’s return policy, it can be useful to see how they handle particular conditions and clauses to get ideas when creating your own.

Let’s go over a few examples from larger retailers together.

On this page, we’ve already made several references to American Eagle’s lenient return policy. With a receipt, they provide a full refund at any time, and for items without one, they offer store credit.

The majority of the document is formatted in an easy-to-read, frequently-asked questions style by the company to assist customers in finding pertinent answers to any questions they may have regarding this unlimited return policy.

Customers can quickly find a phone number, email address, or live chat option for additional support because American Eagle also includes contact information in the header of their return policy.

There might be certain products or services your company sells that are excluded from returns or exchanges. A great example return policy showcasing exclusions on returns comes from Target.

The big-box retailer provides a separate link in the return policy, as shown below, to inform customers about excluded items.

Customers will find the blue link convenient as it is clear to see.

Now we’ll look at the Article return policy for an example of how a furniture company handles exchanges for items without their original packaging.

Similar to Article, if you sell large, delicate, or specialty items, you might need to impose different fees for returns or exchanges without the original packaging.

After reviewing a few return policy examples, you can now create your own by downloading the return policy template we’ve provided below.

Got more questions? We have answers. The most common inquiries we receive regarding return and refund policies are listed below.

No, return and refund policies aren’t legally required. However, you are required to provide returns and refunds for faulty, incorrect, or damaged goods in the UK and most of Europe.

If you don’t post a return policy stating otherwise, you are required to give customers a full refund for returned goods in some US states.

Return policies are not required in any US state. However, you are expected to give the customer a full refund on returned items if you don’t prominently post a policy stating that you intend to refuse returns in the following states:

• California
• Connecticut
• Florida
• Hawaii
• Maryland
• Massachusetts
• Minnesota
• New Jersey
• New York
• Ohio
• Rhode Island
• Utah
• Virginia

Although it is not required, having a return policy is a good business practice. Customers may react negatively or think less favorably of your business if you decide not to post one, and you risk becoming a victim of return fraud.

Additionally, you won’t have a location to point customers to if they have queries or issues regarding returns, refunds, or exchanges.

Click the button below to download the policy in Microsoft Word format, or expand the box below to view our standard return policy template in its entirety, which you can then copy and paste onto your own website for FREE.

Thank you for your purchase. We hope you are happy with your purchase. However, you can return your purchase to us for [a full refund], [store credit], or [an exchange] if you’re not entirely satisfied with it for any reason. Please see below for more information on our return policy. Please see below for more information on our return policy. This template was created using Termlys Return Policy Generator.

RETURNS

All returns must be postmarked within [#] days of the

Thank you for your purchase. We hope you are happy with your purchase. However, you can return your purchase to us for [a full refund], [store credit], or [an exchange] if you’re not entirely satisfied with it for any reason. Please see below for more information on our return policy. Please see below for more information on our return policy. This template was created using Termly’s Return Policy Generator.

RETURNS

All returns must be postmarked within [#] days of the purchase date. All products being returned must be brand-new, unused, and complete with all tags and packaging.

RETURN PROCESS

Please contact customer service by email at [Email Address] to request a Return Merchandise Authorization (RMA) number before returning an item. Once you have a RMA number, mail your return to the following address with the item securely enclosed in its original packaging and [include your proof of purchase, the provided return form, or other].

Attn: Returns

[Return shipping charges will be paid or reimbursed by us. Please be aware that you are responsible for paying the shipping costs for any returns. We urge you to mail your return using a trackable delivery method. Alternatively, you can use the prepaid shipping label that was included with your order. Return shipping charges will be paid or reimbursed by us. Please be aware that you are responsible for paying the shipping costs for any returns. We urge you to mail your return using a trackable delivery method. The prepaid shipping label that was included with your package may also be used. If you utilize the prepaid shipping label, shipping costs of $[Dollar Amount] will be deducted from your refund. ].

REFUNDS

We will process your [return] or [exchange] once we’ve received your return and examined the condition of your item. Please allow at least [#] days from the receipt of your item to process your [return] or [exchange]. Depending on your credit card company, refunds may not appear on your statement for 1-2 billing cycles. When your return has been handled, we’ll send you an email to let you know.

EXCEPTIONS

The following items cannot be [returned] or [exchanged]:

Please get in touch with us using the information provided below to arrange a refund or exchange for any defective or damaged products.

Please Note

• All returns costing more than $[Dollar Amount] will incur a $[Dollar Amount] restocking fee.
• Sale items are FINAL SALE and cannot be returned.
• [Other]

QUESTIONS

If you have any inquiries about our return policy, please get in touch with us at:

If you sell goods to consumers, your company should establish a return policy that addresses exchanges and refunds. A well-written return policy can help you manage expectations with customers, shield your business from legal trouble, and answer a lot of customer service questions.

You don’t have to start this policy from scratch. To easily create a return policy that you can quickly embed on your website or app, download our free return policy template.

Masha is a Certified Data Protection Officer and an Information Security and Data Privacy Specialist. For the past six years, she has served as a data protection officer, assisting small and medium-sized businesses with achieving legal compliance. She has also mentored many international business accelerators regarding privacy compliance. She specializes. More about the author.

Build Your Return PolicyCreate a customized return policy template in minutes!

Disclaimer: Termly Inc. is not a law firm or an attorney, and it does not offer legal services, including advice and representation. All content on the website, including text, graphics, links, and other files, is provided solely for informational and self-help purposes and is not meant to be a substitute for counsel from attorneys. The Terms of Use govern use of this website.

FAQ

How do I write a return policy?

1. The number of days or deadline to return the product.
2. What kind of refund they’ll get (full refund, store credit, exchange)
3. The information (receipts, credit cards, etc.) that they must bring in person or send online in order to receive a refund
4. Conditions that must be met for a product to be eligible for return

What is a good return policy for a small business?

It’s critical to inform your clients of the deadlines for returns. In general, 15 to 30 days are typical, though some businesses choose 90 days. In either case, accepting returns after that time won’t benefit you in any way.

What is a standard refund policy?

Typically, online shops give customers a 15- to 30-day window to return items and request refunds. Some businesses extend that period up to 90 days. Whatever time frame you decide on, it’s crucial to make sure that you actually have one.

How To Add Your Refund Policy To Shopify (+4 More Important Pages)