Having a clear and concise return policy is essential for small and medium-sized enterprises (SMEs) to prevent customer confusion and frustration and to avoid losses from faulty or unsellable items. Research shows that over a quarter of small business owners find handling faulty returns challenging, highlighting the importance of a robust return policy.
Put in place clear return policies
Having a clear and concise return policy will help to prevent confusion and frustration for customers and ensure you aren’t losing money on faulty or unsellable items. Over a quarter (26.5%) of small business owners surveyed said items being sent back faulty is one of the biggest challenges they face, so it’s really important to have a good policy in place to avoid this.
Offer extended return periods
Setting a time limit for refunds is important, so you don’t get hit by an unexpected return several months down the line. However, it could also help to make sure the return period isn’t too short, as this may encourage customers to hold onto unwanted gifts and items without feeling pressured to return them quickly.
Be proactive about customer support
The holiday season is hectic, and customers may forget important details like return deadlines. Proactively reaching out to customers with reminder emails about the return period is a simple yet effective strategy.
Offer flexible refund or exchange options
After the festive period, people may change their minds or receive unwanted gifts. Offering flexible exchange options or company credit encourages customers to make additional purchases, potentially turning a return into another sale.
Use a business credit card to manage finances
There is a significant financial impact when it comes to customer returns, and 26.9% of small businesses across the UK say this has been an issue for them this year.
On how to minimise the impact of returns, Hugh Acland, Commercial Director at Capital On Tap, says, “Sorting returns is a laborious process, and smaller companies often won’t have enough resources to manage them without it impacting other areas of the business. Automating or outsourcing some of your processes can help reduce the time spent on returns and should free up some of your capacity to get back to the more important tasks at hand.
“While it can be hard to manage the financial impact of returns, using a business credit card can help give you a bit more flexibility over your finances. They can be a useful tool for bridging any cash flow gaps as you process refunds, and they can also give you greater visibility over spending across your whole business.
“It’s also essential that any business have a clear return policy. You need to communicate this with customers and confirm the quality and condition you expect returned items to be in to ensure you aren’t losing money on faulty or unsellable items.”