My second day in retailing was terrible. The customer who bought a Danish chair (back then we sold furniture) on our first day returned it, resulting in a negative sales figure for day number two. I was devastated.

Since that time I’ve learned that returns are just a part of the retail landscape, and if you accept them as such life will be less stressful.  Customers consider the opportunity to change their mind to be an essential right, and will take their business elsewhere if you adhere to a customer-hostile return policy.

What would be considered a customer-friendly policy? One of the most common  policies is to accept a return within 30 days for a refund with a cash register or gift receipt.  At our store we allow for returns beyond that time, or without a receipt, for credit only.  Others allow only for exchange or credit no matter what the time involved.

It’s important that you make a clear, brief statement of whatever policy you decide on, and to post it near your cash registers.  Make sure your staff knows the policy, and also discuss with them what exceptions you will allow them to make.  If you empower your employees to have some leeway in enforcing your return policy, you may avoid some ugly confrontations at the checkout counter.

Sometimes customers take advantage of a store’s return policy, and demand that you take back used goods such as clothing that has been worn.  Perhaps you can come up with creative solutions to this issue, such as requiring that a certain store tag still be attached for all returns.  You will need to mention this to all customers making clothing purchases.

It is useful to track customers making frequent or large returns in order to discourage dishonest tactics such as returning items that have been stolen rather than purchased. Ask customers making large returns to fill in a form with their name and address, and to show ID.  This simple process will indicate that you are tracking their activities.

Lee Eisenberg, in his new book Shoptimism, quotes a professor at the Texas Tech business schools as saying that the grace with which a store handles returns “can be the difference between turning a profit and losing money,” since “it takes five times as much investment to bring a new customer into the store than it does to deal with an unhappy customer.”  Given that only a fraction of returns are fraudulent, he says “[a retailer] has to think, ‘Do I want to damage this relationship or not?’”

The more comfortable you are with your return policy, the happier you will be when you have to take back merchandise you’d already considered sold. And since you know returns will happen, you might want to keep Bobby McFerrin’s “Don’t worry, be happy” mantra in mind when confronted with one.  After all, if you sold an item once, hopefully you’ll sell it again.

Happy Retailing,

Carol “Orange” Schroeder

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