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September 9th, 2008

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Returned goods represent a major irritation for the retailer. When the purchase amount must be paid back to the customer for returned goods, this runs your cash flow in the wrong direction; when goods are exchanged for replacements, this represents additional costs to you in the areas of inventory handling, accounting, and, if you are an e-merchandiser, the cost of making a second shipment to the customer.

But having to take back goods is as much a fact of retail life as processing credit card purchases, and it must be endured. Looking at it another way, though, a good return policy is important to the customer and can result in repeat business.

Keep in mind that the customer returning goods is already disappointed that the goods purchased were broken, didn’t fit, didn’t work, or just weren’t right for some reason. Getting a replacement item or cash back to that purchaser in an expeditious manner and with a kind word and apology can evaporate the disappointment.

It’s vital for e-merchandisers in particular to have a good return policy because their customers, rather than seeing and handling goods at a mall store, have to rely on photos and descriptions for their purchases. If potential buyers can’t find a return policy clearly stated at the retail site, they are unlikely to put their faith in the retailer’s ethics alone. After all, purchasers only see and handle the product after they have purchased it, so they deserve some time to decide whether it is all the merchandiser said it was in the online description and they need assurances before they pay their money that goods can be returned.

E-sites must therefore ensure that their return policies are fair and appealing, stated concisely, clearly, and placed prominently so that everyone will see it. And if you know you’ve got a good policy, show it more than once; you can even make it part of your promotion. This gives consumers the security of knowing that what they are buying is guaranteed to be exactly how it was described on their computer.

Keep an eye on your return activity. If you’re getting too many returns, there is something wrong with your product or the way you’re marketing it. Take action.

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