Writing an eCommerce Return Policy That Decreases Chargebacks
Believe it or not, your eCommerce return policy can play a crucial role in a customer’s decision to buy from you.
A clear, simple, and easy-to-understand refund policy says you stand behind your product and want your customers to be satisfied. If your policy seems vague or too complex, consumers may have doubts about your store. They might click away to another site as a result.
This actually makes sense; in the eCommerce space, the buyer doesn’t have the option of touching a product, analyzing the color, or checking the size. They must rely on the product descriptions you provide. They will feel much more confident about a purchase if they know they have the option to return it easily.
In this post, we’ll take a look at what makes a good return policy. We’ll see how to put that policy into action, and discover how a bad policy can lead directly to chargebacks.
What Is An eCommerce Return Policy?
Your products may be great, your customer service may be outstanding...but all businesses are subject to the occasional return. Online businesses are especially susceptible because customers can’t interact with the merchandise before they buy. That’s why your return policy can have such a powerful impact on sales.
How powerful? Look at some of the statistics from a recent report on product returns:
- 67% of shoppers will check your return policy before purchasing
- 92% of buyers will purchase again if returns are easy
- 27% say they’re willing to purchase items costing $1000 or more if no-cost shipping is offered
eCommerce Return Policy Requirements
Multiple factors impact the way you write a return policy. For starters, each state has its own specific rules for how a business discloses its return and cancellation requirements. We advise you to reference local laws, as part of this process.
The card networks, however, can have separate and stricter mandates. For eCommerce businesses, cancellation and return policies must be clearly stated on the website. You must have a link to your terms and conditions that can be easily accessed during the checkout process. Customers must tick a box indicating they’ve read and agree to the conditions before completing their purchase.
Beyond the outside requirements, you want a return policy that serves your best interests and those of the customer. That includes discouraging fraudulent chargebacks.

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Free DownloadYour Return Policy Influences Chargebacks
Of course, no merchant likes to deal with refunds. Making your return process more complex, however, won't stop customers from wanting to return merchandise. More likely, they’ll will simply bypass your customer service department by using a chargeback.
It's important to understand that friendly fraud—not criminal fraud—is the leading cause of chargebacks. Most consumers who file chargebacks do so out of convenience. The more complicated your return procedure, the more likely it is that the customer will skip it altogether and call the bank.
Consider the following statistics, based on our own internal studies:
With those points in mind, it’s easy to see why you should do everything in your power to provide easy, no-hassle solutions as part of your eCommerce return policy.
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Top 10 Tips to Create a Better Return Policy
So how can your return and cancellation policy help reduce the risk of chargebacks and return fraud? Here are 10 suggestions to consider:

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The best eCommerce return policy from a chargeback reduction standpoint boils down to three basic tenets:
- Keep it clear.
- Keep it simple.
- Promote it everywhere.
Developing a solid eCommerce return policy can seem pretty straightforward. There are certain “tricks of the trade” that may not occur to you, though. Tracking all return requests, for example, and checking for patterns that may indicate an internal issue (or a questionable supplier).
One of the many services provided by Chargebacks911® is a 106-point inspection of merchants’ policies and business practices. We can help you identify chargeback triggers—including potential issues with your eCommerce return policy—and show you innovative new ways to reduce risk and prevent revenue loss. Contact Chargebacks911 today to learn more.
FAQs
What is an eCommerce return policy?
Your return policy refers to all rules and procedures governing how you handle eCommerce refunds. This policy should be comprehensive, yet adaptable, in order to optimize sales and prevent chargebacks.
How can my eCommerce return policy impact sales?
Up-front transparency with your return or refund policy lets buyers know that you stand behind your products and your service. Statistics show that consumers are much more likely to purchase from merchants who offer fast and easy returns.
What’s required by law for my return policy?
The minimum legal requirements for a return may vary by location, type of business, or other factors. The requirements issued by the card networks, however, are usually stricter.
How do I write an eCommerce return policy?
Flexible conditions, ease of use, longer return windows, and fast processing will all contribute to a good chargeback-preventing returns policy. The three key elements to remember are to keep it clear, keep it simple, and promote it everywhere.
How do you handle eCommerce returns? How do you promote your policies?
Put a link to your policy on every page of your website, especially during checkout. Ask customers to “accept” the policies before processing. Include the return policy in the order confirmation email and receipt. Another idea might be to create a separate FAQ page that exclusively applies to returns and refunds.