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Accounting, Management & Legal
Your Policies Are Only as Good as What's Posted
Helps resolve customer disputes
By: Pamela Hazelton
Comments: 0
Since the holiday shopping season is upon us, now’s the time to double-check store policies. Besides privacy, security and shipping, policies are what decide what happens when there is a problem with an order. So many stores neglect these important requirements, then struggle to make them up when something goes south with an order.
The only hope you have of winning a charge back or dispute (via third-party, such as the Better Business Bureau) when an item arrives damaged, or if the customer changes his mind is to have something posted on the site in advance. There are time stamps on files uploaded to a server, so making up your store’s stand on refunds, returns, and exchanges won’t hold water.
Regardless of how busy you may be right now, you need to take some time to review policies posted on your store, and if there are no statements of requirement, you need to get some in place right now.
How exactly do you do it? First, ask yourself how you want to handle exchanges—will they be accepted? And under what circumstances. What about returns? Will the customer receive a refund or store credit? And will there be any restocking fees?
Who’s responsible for damage during shipment? Do you offer insurance on shipping (if not, you should be) and is the customer required to go through the carrier for any claims, or do you handle that for them?
As a rule of thumb, store policies should be placed 30 days in advance and a notice is normally posted somewhere during the order process. This can be a simple line of text, such as: Questions about this order? Read our policies. You could then provide a link to the policy page.
But, won’t that scare the customer? If done right, it shouldn’t. The bulk of online shoppers expect that there are things in place to prevent them from taking advantage of you. They are familiar with policies posted on sales receipts and customer service desks at brick and mortar stores anyway.
Some of the standards:
Return/Exchange policies usually run anywhere from 10- 45 days (some will honor returns as long as 90 days after purchase, but that’s rare). Some online stores will only honor exchanges of damaged items, but will gain more creditability by allowing returns on an item a customer just doesn’t want.
Restock fees are standard in some industries, and if you impose them, make sure they aren’t ridiculously calculated. On general merchandise, a restock fee should linger around 10%.
Store credit is the most common form of a refund, and while there is bound to be a few customers who just demand the cash back, store credit tends to work will for most. Many online stores issuing store credits put an expiration date of one year, but check your local laws on this. Besides, you already have the money, it only makes good business sense to leave that credit open until they are ready to use it for something they really need or want.
When accepting returns and exchanges, make sure your policy outlines who is responsible for the shipping costs. Commonly the customer covers this (though use your own discretion if you find that the items description was way off the mark).
If you offer any warranties, be explicit in what is offered, for what term, and under what circumstances.
Review the Policies:
By all means, review your policies with your employees. And make sure they know the limits when it comes to pleasing a customer (i.e. giving cash back instead of store credit).
Going Against the Grain:
Common and acceptable policies should not sway shoppers away—the few it might are likely customers you don’t want. But do make sure to analyze similar businesses and your target audience. You don’t want to give the impression you are making money off returns, but rather finding a comfortable medium in which to cover your losses in the case of a customer just changing his mind.
When it comes to products that malfunction, every effort should be made to provide a replacement at no additional cost to the customer.
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Published on Tuesday, November 01, 2005
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