Manage Restocking Fees and Refunds
It’s easy to forget about returns when running an online business. It feels like sales is everything, and a good return policy can wait. However, it’s important to establish a good return policy that works for your business, as many customers look for return information when deciding on making purchases. Most importantly, customers want to see how much of a refund they will get if they return the product. A generous refund and returns policy can be a great tool for increasing sales.
A restocking fee is a fee charged by a retailer for accepting a returned product. Retailers charge restocking fees so they don’t lose money on sales. When an opened product is returned, retailers can’t sell it as new, so they charge a restocking fee so as not too lose any money. There are tons of different return policies out there, and as many different restocking fee possibilities. Computer parts online store Newegg offers great deals, but a terrible returns policy. You have to pay return shipping for defective products, and usually can’t return products that aren’t defective. On the opposite end of the spectrum, L.L. Bean lets you return almost anything, anytime.
So how should you manage your refunds and restocking fees? You should definitely try to make a policy that is as lucrative to customers as possible. While you may not be able to afford a policy that allows free returns any time, you can offer a good policy that is clearly stated. You should offer free returns on defective products, without a restocking fee. The customer probably won’t purchase a replacement or similar product from you if you charge them a large restocking fee on a product that doesn’t work. However, for opened products that work properly it isn’t ruthless to charge a small restocking fee just to cover the costs of no longer being able to sell the products as new. Think about what works financially for your business and industry. If a really customer-friendly return policy wouldn’t be too expensive for your business, it could be a great tool. Customers love a store with free returns, and it can lead to more sales. Consider what return policy makes the most financial sense for your business and remember; the better policy you give customers, the more likely they will be buy from your store!
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