eCommerce Return PolicyHow to Streamline Your Return Rules to Better Serve Your Customers & Prevent Chargebacks

March 9, 2023 | 15 min read

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eCommerce Return Policy

In a Nutshell

In this post, we’ll take a look at what makes a good return policy. We’ll explore what you should include in your eCommerce return policy, what you should keep in mind when crafting it, and what you can do to ensure it’s working for your business. We’ll also see how to put that policy into action, and discover how a bad policy can lead directly to chargebacks.

Did You Know? Simplifying Your eCommerce Return Policy Can Help Prevent Chargebacks.

Believe it or not, your return requirements can play a crucial role in a customer’s decision to buy from you.

Eight in ten consumers say that your eCommerce return policy is an important factor when making a purchasing decision. Two-thirds of buyers will review your policies before clicking “buy.”

A clear, simple, and easy-to-understand refund policy communicates more to your customers than just basic rules. It says that you stand behind your products, and that you 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. But, how do you ensure that your policies are optimized? Let’s dig into it. 

Why Does Your eCommerce Return Policy Matter?

Your products are great, and your customer service is outstanding. That said, all businesses — no matter the quality of their goods or support — are subject to the occasional return request.

In the eCommerce space, shoppers don’t have the benefit of a tactile, first-hand experience with items. The buyer doesn’t have the option of touching a product, analyzing the color, or checking the size. They have to rely solely on the product descriptions that you provide. 

Customers tend to feel much more confident about a purchase if they know they have the option to return it easily. For instance, a recent report on product returns revealed the following insights:

Essentially, a good eCommerce return policy builds consumer confidence in your brand. In contrast, a bad policy can deter customers from shopping with you. It may even cause chargebacks and additional fraud incidents, as we’ll see later on.

Is an eCommerce Return Policy Legally Required?

The short answer is “no.” You're not legally required to have a written policy in place to accept returns. However, it's a bad idea not to do so.

Even though there aren’t any state or federal laws mandating return policies, many states in the US have very strict guidelines regarding returns. Similar guidelines exist in the EU as well, regarding how and when your return policy must be displayed.

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In addition, your customers want — and expect — a good return policy. A better customer experience can help you see better customer satisfaction and improve overall retention rates.

Unhappy customers won’t jump through hoops to return items through your store. If you make it hard for them, they’ll take the matter up with their bank instead. 

Forced bank refunds, more commonly known as chargebacks, are a worst-case scenario that you should avoid whenever possible. The chargeback process is lengthy, time-consuming, and will always end up costing you more money than the original transaction was worth. In other words: if you want to prevent forking over more revenue in the end due to chargeback fees, a simple, easy refund policy is the right way to go. 

What to Include in Your eCommerce Return Policy

For all intents and purposes, you need a detailed, concise return policy. Where do you start, though?

Our first piece of advice is to keep it simple. No one wants to feel like they need a law degree to read a return policy. Shoppers simply want to read what is relevant to them, when it’s relevant, and learn what they need to do to get their money back. Don’t make it more complicated than that. 

You should write as you would speak to your ideal customer. Don’t invent words or attempt to complicate the language, and remember that a “short and sweet” approach is usually best.

Here are a few points to remember as you start to draft your return policy:

Clarify What is Applicable for a Refund

Your customers want to know what they can return and in what condition it can be returned. For instance, if you’ll only accept new, unused merchandise with tags, then you need to specify exactly what “unused” means. Many customers might attempt to wear or use an item before they decide they don’t like it and want their money back. If this type of “no questions asked” return is unsuitable for your business, you need to say so upfront.

Some companies will still accept mildly used returns, but will assess a 20% restocking fee after a cursory examination. This is an option to ensure your customers can still return the items they didn’t enjoy, but also illustrate that you are willing to work with them.

Detailed Return Requirements

If your customer needs a receipt or an authorization number, let them know in advance of every sale. If you’ll accept items that are gently used with a restocking fee, maybe you can make some sort of concession here where the customer can receive a partial refund for items that still have tags. Or, maybe offer to give store credit in exchange for the item without a receipt.

However this plays out, the point is to let your customers know what they’ll need to provide for a full refund. Store credit and exchanges can help soften any refund declines and keep your customers happy. To make this even easier, you might ask customers to choose which option they prefer before initiating the return process.

Disclose Any & All Fees

This is very important: don’t ever surprise your customers with fees at the end of a return or exchange. If you charge restocking fees, service fees, or shipping and handling fees for returned items, you need to be transparent about those in your return policy.

What about items that are broken, or don’t work as promised? You should detail the exact circumstances under which you’ll accept a damaged or defective return without fees. Think about it like this: if you buy a damaged item directly from a store and return it that same afternoon, you shouldn’t be charged to return or exchange that item.

Specify Timelines

Every option you provide for returns should have a detailed timeline attached. Most eCommerce companies offer returns between a 30 and 60-day window, but some limit returns to 15 days while others extend that period up to 90 days.

Spell out these timelines in clear, plain language. Whichever return window fits best with your products and services, ensure that your customers are aware of that timeline before they finalize a purchase.

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Sample Return Policy

Now that we have a general idea of what to include in a customer-forward return policy, it’s time to take a look at how these concepts work together in practice.

We’ve taken the opportunity to mock up a sample return policy template for you. While this will need to be adapted to the specifics of your business, this basic template should work for most businesses:

Refund Policy Sample Template example
Download the Sample Return Policy Template

Don’t forget: every business is unique!

You may need to adjust your return policy to accommodate your customers’ specific needs. So, although this template can surely help you visualize the general layout of your return policy, the finer points will be entirely up to you and your customers.

Displaying Your Return Policy

Your next crucial step after crafting your well-written return policy is knowing when and where to display it. One excellent rule of thumb to follow for returns is to ensure your customers agree to your return policy before checkout.

To do this, you can enable text input fields or pop-ups right before checkout is initiated or just before payment is approved. Ensuring customers have a chance to read it before they buy is a wise move for every business. 

It’s a good idea to ensure that a summary of return policy is visible on every page of your site. You should also include a link to read the full policy on of the following, at least:

  • FAQ Pages
  • Product Pages
  • Order Notifications
  • Website Header & Footer
  • Via Chat

Top 10 Return Policy Best Practices

So, how can your return and cancellation policy help reduce the risk of chargebacks and return fraud? Here are 10 suggestions to consider:

Prevent Returns from Happening

Before you start editing your eCommerce return policy, take a step back and re-evaluate your entire sales process from start to finish. You might identify several ways to prevent returns from happening in the first place.

Review product and service descriptions for accuracy and detail. Do product images show details like size and color, and do they capture the item from different angles? Incomplete information can make customers feel like they’ve been misled. This will lead them to return merchandise.

Turn Returns Into Exchanges

Obviously, an exchange is a far more profitable outcome than an outright return. Providing consistent, excellent customer service can allow you to determine what about your products and services isn’t working for your customers. Once the reason has been established, you have an opportunity to offer the customer something of equal value which might better suit their tastes.

This won’t always work out to your advantage, as some customers will simply want their money back. However, try to consider each return an opportunity for an exchange. A savvy tip to make an exchange more likely is to offer free return shipping for exchanges.

Offer “No Strings Attached” Cancelations

Canceling a recurring payment can be embarrassing for the customer. If they feel duped, customers may even become angry. Such feelings can lead to chargebacks as the consumer tries to avoid confronting you.

That said, “canceled recurring transaction” chargebacks — even fraudulent ones — are often hard to challenge. It often comes down to the customer’s word against yours. Since issuers usually side with the consumer, you should focus on prevention here.

Your customer is more likely to enter into an agreement when they know they can easily cancel. So, make your cancellation process clear, simple, and easy to navigate. Eliminate early termination fees or other penalties whenever possible.

Provide Multiple Return Options

You don’t have to restrict your return policy to just one type. You can tailor it according to timelines by staggering allowable returns according to the time elapsed. For example:

  • Full refund at 15 days
  • Partial refund at 30 days
  • Exchanges only after 30 days
  • Website Header & Footer
  • Via Chat

The more options you provide your customers, the better. Also, another smart tip here would be to include return separate instructions within your refund policy for “full refunds” and “exchanges,” to walk customers through the process.

Get Inspired

Many companies out there have incredible return policies that can — and should — inspire yours. Do a little research and browse your competitors’ sites. Some return policies are extremely straightforward, and others are more dynamic, offering customers more options and control over their return process.

Also, examine reviews to see what each company’s customers are saying about their customer service, the scalability of their user experience, and the speed and quality of their return process.

Cover the Cost of Shipping

Yes, we just talked about fees like return shipping. It might seem financially sensible to charge the customer for return shipments. Remember that stat we mentioned earlier, though: nearly 80% of shoppers say they look for merchants who offer free return shipping.

Consumers view free return shipping as insurance. It can incentivize them to buy from you rather than a competitor, even if they don’t plan to return the item. Plus, removing the cost barrier in the refund process will dramatically improve the odds of getting a return request, instead of a chargeback. So, the long-term benefits are worth the extra cost.

If customers are going to be responsible for return shipping or restocking costs, be sure they understand that clearly from the beginning, before the sale ever happens.

Share Your Policies Everywhere

You may think that promoting your return policy will encourage customer returns. In reality, delivering a transparent, upfront policy gives consumers more incentive to make a purchase. This is because the customer believes they can have confidence in your brand.

Don’t be afraid to call attention to your simplified policies. Display a link on every page of your website, including product description pages. It’s especially important during checkout. Also, ask customers to “accept” the policies before processing.

Don’t forget to remind customers after the sale, too. Include return policy information in your order confirmation email, on the receipt, and even on the packaging, if possible.

Make it Quick

It matters how fast you process returns. According to a survey from Digital Commerce 360, 72% of eCommerce shoppers expect a refund within 5 days of a return. 40% of respondents said they’d limit their shopping with merchants who take too long to issue a credit.

Impatient customers may initiate a dispute if they think they will get their refund faster. That’s why it’s important to process return requests as quickly as possible and get the money back to the buyer.

Open Up Return Windows

There are pros and cons associated with longer return windows. For instance, delayed returns can cause restocking issues for you. The more time a cardholder has to make a return, though, the less likely they are to file a chargeback.

One option might be to consider varying the allowable return time under certain conditions. You can allow extended return timeframes for cases of damaged or malfunctioning merchandise. You may also want to relax your requirements during the holidays, as well. And, of course, the most consistent rule in this list still applies: clearly communicate all information to customers before the purchase.

Educate Your Staff

You might assume that your employees completely understand all aspects of your eCommerce return policy. You know what they say about assuming, though.

Be sure all staff members, from the sales team to the customer service department, understand the rules of the return policy. Don’t just lay out the rules, though; explain why those rules are in place. This can help keep employees from making promises the company can’t (or doesn't want to) keep.

Good Return Policies Help Fight Chargebacks

It’s not practical to accept any and all returned merchandise. However, the more flexible your return policy, the lower the risk of chargebacks. If your restrictive policies mean someone doesn’t qualify for a traditional refund, that customer is more prone to commit friendly fraud.

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), can have a huge impact.

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.


What is a standard return policy?

Most eCommerce companies offer returns between a 30 and 60-day window, but some limit returns to 15 days while others extend that period up to 90 days.

Do I need to have a return policy?

Yes. While it’s not legally required, customers tend to feel much more confident about a purchase if they know they have the option to return it easily. A good return policy builds consumer confidence, while a bad one can make customers not want to shop with you and can cause chargebacks.

How do I make a return policy?

There are many facets to consider before you sit down and write your return policy. Once you decide on your options, you should write a simple, easy-to-read, easy-to-spot, and completely transparent return policy for your customers. You should consider the cost of creating and listing items for sale, overhead, and staffing. If products are returned, can they be restocked even if used?

What information should I include in my return policy?

The rules to follow when writing your return policy are: keep it simple, make your conditions clear, detail return requirements, disclose any and all fees, and specify your timelines.

Where do I display my return policy?

It won’t hurt to ensure your return policy is visible on every page of your site. Some of the best options include: FAQ pages, product pages, order notifications, website headers, website footers, and in-chat windows.

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