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Cracking the Code of Ecommerce Returns, Refunds, and Exchanges

2021 09 23 return refunds

[3-minute read]

Ecommerce is a two-way street

The laws of the universe apply to everything in life, even to business. What goes up must go down, what goes out must be able to come back in. Simply put, any product that leaves your online store must be able to be returned to you. There are various reasons why customers would want to return a product. It might not be exactly the size they wanted, regardless of how much trouble you go to on your site to reflect products accurately. Perhaps the product arrived damaged in spite of your impenetrable packaging, or the product turned out not to be exactly the right shade of green. Whatever reason there might be, they want to return the product and get their money back. 

Without a proper system to handle returns, the process can consume a huge amount of time and energy with emails flying back and forth to your customer service department. Your shipping expenses will also suffer from returns if you’re going to replace the product, especially after peak periods like holidays. 

All is not lost. If you have a proper system in place to handle returns, coupled with a solid returns policy, this area of your business can transform into an opportunity to win eternal loyalty from your customers and build trust. 

Pitfalls of poor return policies 

There is a saying in marketing that one happy customer will tell a hundred new ones. One unhappy customer has an uncanny ability to tell a thousand potential customers, especially on social media. If there are a couple of bad reviews associated with your business, they have a way of showing up when people do searches on Google. Disgruntled customers also have a way of spotting your ads and voicing their discontent in the comments. It’s a bit counterintuitive to pay thousands of pounds to get your business out there only to inadvertently amplify that you can’t be trusted and people can’t return products if they’re not happy with them. 

If you don’t have a decent system in place to handle returns it will also start affecting your business operations. If your customer service department must deal with each complaint manually they will also eventually become disgruntled and unmotivated. It can even stop you from scaling your business properly. 

Create a win-win returns policy 

A customer-centric returns policy will help you in your marketing efforts. According to UPS, 68% of shoppers look at a site’s returns policy before they consider buying a product. Many marketers have realised that and now advertise “free”, “easy” and “hassle-free” returns and exchanges. Some fashion sites have even gone as far as offering lay-by services where you keep the products you like and return the ones you don’t. They’ve pivoted and changed their business models to focus on returns and exchanges. 

The positive customer reviews and word-of-mouth exposure you can gain from such a pivot can help you prosper and negotiate difficult trading conditions. 

How to write a winning returns policy 

Your specific returns policy will depend on the kind of products you sell. You should make a clear differentiation between returns and exchanges. When customers send the product back and want a refund, it’s a return. If they want the product but there’s something wrong with it and they want it replaced with another item from your store, it’s an exchange. 

Every return policy should, however, as a minimum, contain the following elements: 

  • Which products clients can return 
  • Which products can be exchanged 
  • Have any “final sale” products clearly outlined. These products are non-returnable and non-exchangeable 
  • State the time frame that your customers have to return products, i.e., 30 days, 60 days, etc. 
  • In what condition the products must be returned (lightly worn, with tags on, in its original packaging, in original condition, unused, etc.)
  • What customers will get for returning the product, i.e., a refund, store credit, a product of equal value, etc.


Below are some examples of common exceptions: 

  • Discounted items are final and cannot be returned or exchanged
  • Returned items must have tags still on and be returned in original product packaging
  • Returned items must have no visible signs of wear or use


To initiate a return or exchange, your steps should be laid out clearly, linking to relevant pages, such as your online customer portal. Here’s an example:

  1. Log in to our online return portal using your email address and order ID.
  2. Choose the products you wish to return or exchange from your order.
  3. Print the prepaid shipping label that you will receive by email.
  4. Send all items back to us using the label provided.


Some additional information you might want to include: 

  • How long it will take to receive your store credit, refund, or replacement product
  • Any shipping fees involved that the client might need to pay 
  • Any return restocking fees that the client might need to pay 
  • How you handle lost or damaged returns
  • A contact number and email address where the client can contact you should they want to follow up or have any questions


There are various return and refund policy generators that can help you. Have a look at WebsitePolicies or TermsFeed. If they don’t meet your requirements, do a Google search, you’ll be spoilt for choice.  

Where to put your returns policy 

It’s one thing having a decent returns policy, it’s pointless if nobody can find it. If you put it in the fine print and hide it somewhere, it will only lead to problems down the line. Make sure your customers see your policy before they buy anything. That’s how you can ensure you’re on the same page and have the same expectations. 

Include your policy in a couple of hard-to-miss places throughout your website to make it easy for your customers to find it. Some key places might be: 

  • The footer on your website 
  • FAQ page 
  • Product page/s
  • Within your shopping cart 
  • At checkout
  • In your website chat


Third-party apps can take the pain out of returns. Here are some examples. Have a look at them and see if they can make a difference to your ecommerce store:

Profitable returns as a strategy 

However you decide to deal with returns, they will cost you. There are ways that you can turn this into an opportunity:

  • Turn returns into exchanges 
  • Sell product warranties
  • Upsell or cross-sell exchange requests


Did you resonate with this article? Feel free to share your thoughts and tag us on InstagramTwitter, Facebook, and LinkedIn.

P.S. Want a payment solution that does what it says it will do? Get Truevo. We can’t wait to connect with you.


It’s important to note that this blog post has been written for informational purposes only. It shouldn’t be construed as legal or tax advice on any subject matter. Don’t make or refrain from making any serious or legal decisions based on the content of this post without seeking professional advice. 

Furthermore, please be aware that Truevo is in no manner connected or affiliated with any of the entities mentioned in this article. Any reference to such is simply by way of an example and does not imply or constitute any form of endorsement by Truevo.

Anneli van Rooyen
Anneli van Rooyen
Marketing Technologist at Truevo Payments
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Disclaimer: This content has been written for informational purposes only. It should not be construed as legal or business advice.

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