How Long Should A Returns Policy Be?

By Julia Ebelthite

Between the Covid lockdowns and the shift to online sales, we’ve seen some huge changes in the world of retail returns.

Waves of companies have been forced to adapt and re-write their return policies – from extra time allowances for trips to the post office during lockdown, to introducing extra services like Asda ToYou to allow shoppers to return as part of their essential shopping trips, or InPost lockers that allow contactless drop-off at remote locations. 

For lots of retailers, it’s given time to take stock – to re-examine the returns policies they use, and move forward with the best possible online proposition that distinguishes them from the crowd, at a time where the eCommerce industry has never been so competitive.

And if you’re one of those businesses, you could be stuck on one of the most fundamental questions of all:

How long should a returns policy be?

It’s not an easy question, and it comes with a delicate balancing act – between minimising the volume of returned items, and keeping as many of your customers as happy as possible.

Let’s get into it:

Is the bare minimum enough?

Under UK law, online retailers have to offer a refund to any customer who cancels their order within 14 days of receiving a product.

Those customers then have another 14 days to get the goods back to you.

That’s the minimum legal requirement that every online retailer has to stick to – so while you might be giving yourself a pat on the back for a job well done by offering a 14 day returns policy, it’s important to assess what this says about your brand. 

It tells people you don’t care about customer convenience. 

Whilst you and I know that a 14 day returns policy is designed to get stock back on the shelves quickly and re-sold before they go out of style, this mindset doesn’t translate to shoppers who won’t be familiar with the complexities of balancing stock levels. 

Here’s the reality:

ReBound’s consumer survey found that 63% of shoppers expect a returns policy to be at least 30 days, with 76% revealing that they expect retailers to offer longer returns policies since the outbreak of COVID-19. 

So if the majority of your customers want a returns window that’s twice as long as what’s required, hitting the legal targets probably won’t cut it.

Short returns are short-sighted

You might think a shorter returns policy is good for your business. And from a retailer’s perspective, it’s easy to see the logic:

You don’t want your stock out there in limbo. You need a quick turnaround – where you can get your goods back to your warehouse as soon as possible to get them ready to go back on sale. (Especially in the fashion industry, where items can quickly go out of season.)

That’s the generous reading of the situation. But there’s a whole other reason why some retailers prefer a shorter returns policy:

They think it reduces their returns.

With a tighter returns window, shoppers are more likely to miss the returns deadline. They’ll try out the product, discover it’s not right, and then start the process of claiming a refund – only to find out that they’re already too late, and they’re stuck with the product forever.

In terms of cash, it’s a short-term win for the retailer. But it doesn’t feel like an honest victory – and it doesn’t lead to a happy customer. Plus, ReBound’s consumer survey found that 21% of shoppers would send an item back in hope of a refund anyway – so there’s still some work to do from your warehouse team to reject the item and send it back to the customer.

Today’s shoppers are sharper than ever

From our own data at ReBound, we know that 67% of customers check a returns policy before they complete a purchase.

That means they care about your returns policy and they seek it out as part of their buying decision – before they spend a single penny on your business. They’re weighing up the risks of missing your short returns window, and the potential to need to pay for the return, and they’re weighing up the hassle of your over-complicated returns process.

So if you’re one of the retailers who thinks that a shorter returns policy is helping you reduce your returns, you’re absolutely right:

Because a shorter returns policy is reducing your sales, too.

When your customers see a returns policy that’s restrictive or complex, they already know three things about your brand:

  1.     You’re not convinced that your customers will love your products
  2.     You’re not interested in keeping them happy after the sale
  3.     You’re going to make it as hard as possible for them to get a refund.

And when that’s the impression that comes across – at the crucial final point of making a decision on a purchase – your short returns policy could be ruining more sales than it’s preserving.

So if short returns aren’t all they’re cracked up to be, how does a longer returns policy compare?

Longer returns aren’t as long as you think

We already know that your customers want more than the legal minimum of 14 days.

We know that shoppers are checking your returns policy before they buy – and that a restrictive returns window could be putting them off.

So why are so many retailers still resistant to giving their customers more time?

It’s natural for retailers to assume that shoppers will take full advantage of the window they’re given. And if your customers are taking months to return your products, that’s a huge amount of stock that’s lost in limbo – or potentially becoming unsaleable.

But when we look at the facts, it’s just not true:

From our own data at ReBound, we’ve seen that a large extension on your returns window leads to just a small increase in the time it takes to get your products back.

Here’s how it works out in practice:

  •       With a 30-day returns window, it takes an average of 12 days to get the goods back.
  •       With a 60-day returns window, it takes an average of just 16 days.

So with a returns window increase of 100%, the average retailer sees just a 33% increase in the actual time it takes to receive their returns.

And if we take it to the extreme?

When retailers offer a returns window of 365 days – giving their customers an entire year to return their products – those retailers are getting 95% of their goods back within the first 30 days.

Why are shoppers so quick to return?

When you’re a retailer worried about stock, it’s easy to forget your customers’ perspectives.

You don’t want your stock in limbo, sitting in someone’s cupboard for weeks on end while they twiddle their thumbs.

But in the same way, your customers don’t want their money locked up in your bank accounts.

Our data shows that 60% of customers expect their money back within 3 days of sending back their returns.

That shows a real urgency for their refunds. They want their money just as much as you want your products – and that means that you and your customers have exactly the same goal:

When it comes to returns, everyone involved wants a quick resolution.

If you’re not making things easy for your customers, you’re only making things harder for yourself in the long run. And when it comes to returns, it’s crucial to remember one thing: 

The customer is always right. 

Why? An unhappy customer is a noisy customer. Whether that’s calls into your contact centre, or flooding your social channels with angry tweets – there’s a cost to unhappy customers, they don’t just drift away into the distance. So whilst you might be locking in sale with no returns as your customer misses the return window, when you add in the fact that contact centre calls can cost a couple a quid a pop and social media reviews are in the public eye disparaging your brand and discouraging sales – how much are you really making? This is especially true when you consider that this customer may never buy from you again, ReBOUND research shows that 80% of customers will never buy again after a good returns experience. So customer loyalty and lifetime value takes a real longterm hit for a short term gain.

So how long should a returns policy be?

There’s a lot to unpack here – and there’s no golden rule that fits every company or customer. It’s the age old saying that there is no “one-size fits all”. 

But there are some helpful guidelines that we’ve learned along the way. Here’s what you need to keep in mind:

  •       Every returns policy needs to be at least 14 days.
  •       Most people expect a policy of at least 30 days – and they’re checking before they buy.
  •       With a 30-day policy, the average return takes only 12 days.
  •       Longer returns windows can lead to longer returns – but only slightly!

And if you’re still confused? We’ve got you.

We’ve been helping retailers from all kinds of industries to stay on top of their returns strategy – helping them to reduce their returns, keep their customers satisfied, and even write their returns policy for them!

So if you’re looking for an expert returns partner on your journey towards happy customers and great returns experience, get in touch.

Sign up for our newsletter