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No Hassle Return Policy and Why It Is So Effective
No matter what you sell, when customers are debating whether to purchase from your business, one of the questions they ask is "What is your return policy?" If they do not hear or read the words "full refund" you can most probably kiss the sale goodbye. Your customer has to feel confident in your company, if there is any doubt they will back off. The customer is thinking, "Why should I take the gamble that the product won't work or it is not good for what I need it for?" The customer isn't in the gambling business, they simply want to feel secure in their purchase. They only want a no hassle best return policy, they don't feel that this is asking too much.
Tell them there is a restocking fee and watch them run. Or tell them there is only a store credit and watch bells go off in their head saying, "Oh my if I return the item I'm forced to buy here again, what if I don't want anything here?" Worst of all, tell them there are no returns and watch them drop your product like a hot potato.
Many merchants feel that customers take advantage of a liberal return policy. They are correct, to a degree. Some customers do take advantage, however it's a much lower number than you think. In my 22 years of experience the number of dishonest returns is about 5% of all returns. Dishonest returns are classified as the customer using your product and then no longer needing it, so they decide to get a full refund. In other words you loaned them a brand new product, did the effort of making the sale and then accepting the return, only to be stuck with a now used product. Of course if the product is well used there is no need to refund the customer. There needs to be a clause in your return policy stating this. However where it is a fine line on how much the product was used the benefit goes to the customer. This is the disadvantage of your no hassle return policy.
There is no doubt you will lose money on dishonest returns, but at approximately 5% of returns you need to calculate the increase in sales generated by your no hassle return policy. This is a number that is hard to quantify, however be assured it is substantial. Your no hassle return policy will increase your bottom line as customers feel confident and this makes them willing to purchase more from you, so your dollars per customer will increase.
The no hassle return policy is a win for your business and a win for your customer. Put yourself ahead of your competitors with customer friendly policies that increase your sales in the long run.