How to create your clothing refund policy
JP Arnaud-Marquez
·May 10, 2022
In ecommerce, apparel is one of the most common types of returns, with about 12% of all product sales ending up in a return.
Unlike in a brick and mortar store, ecommerce shoppers don’t have the option to try on clothing items in a fitting room — so customers don’t know whether they’ll like how an item looks or fits until they unbox it and try it on.
Some shoppers also make a habit of “bracketing” their clothing purchases, by purchasing multiple items at once with the intention of sending most of them back. Essentially, they’re transforming the ecommerce sales process into a virtual fitting room — and it’s more common than ever before: As of 2020, 62% of online shoppers said they’d bracketed some of their online purchases.
And of course, there are also occasional snafus on the merchant’s side, too. Maybe you sent the customer the wrong item, or a shirt had a hole in it.
Whether a customer return request comes from a poor fit or style, as part of bracketing behavior, or because of a merchant error, it’s important to have a solid return policy in place that helps your customers feel confident in your products. At the same time, it’s also important that you’re not designing a policy that leaves your brand in the red by accepting too many returns that you won’t be able to resell.
Here’s a look at some guidelines for building a clothing refund policy that will make both your stakeholders and your customers happy.
Set separate policies for different types of apparel
Not all clothing return policies should be the same, so you may need to customize based on the item category.
For example, if you sell jeans, you may just request that the item is unwashed and still has original tags on — but if you also sell intimates, you may request that the underwear is still in its unopened original packaging in order to be eligible for a return.
Setting these types of return policy variations are a question of hygiene, as customers are not going to want to purchase underwear that’s been tried on by someone else. Even so, you may want to consider offering a “satisfaction guarantee” policy that offers customers who aren’t happy with the product a full refund – without asking them to send back the item. This can keep your customer happy, while helping you save on reverse logistics and improve your company’s sustainability efforts by avoiding return shipping on products that are destined for a landfill.
Of course, you’ll also have some “final sale” items that aren’t eligible for your return policy at all.
With so many different potential return policies to consider, how can you provide your customers with a streamlined process that helps them reach their goals quickly?
Use an automated platform
By using an automated returns management solution like Loop, you can easily create customized workflows that help you enforce your return policy for each item category, with no need for live customer support.
Customers should be able to log into a returns portal, where they can choose products that are eligible for a full refund, excluding products that were purchased as final sale or are past your maximum number of days since purchase.
From there, they should be able to select a reason for returning the item: too big, too small, didn’t like fit, manufacturer defect, etc.
Depending on the reason the customer selects, your returns platform should be able to automatically select products from your real-time inventory that the customer might want to exchange the item for. That can help your company retain revenue through product exchanges, rather than losing it to a full refund – and the customer will be able to make a simple exchange without needing to return to their online shopping cart to complete the transaction.
Your returns management solution can even offer the customer additional store credit as an extra incentive to encourage them to make an exchange rather than seeking a refund. This can be an effective strategy: Loop’s retailers typically retain 40% of return revenue via product exchanges.
Regardless of whether the customer chooses a full refund or a product exchange, your platform can then issue them a return label so that they can ship the product back to the warehouse if needed, or simply tell the customer to keep or donate the item if it’s not cost-effective or environmentally-sustainable for them to return the item to your company.
Increase repeat purchases with a better returns experience
Many brands dread customer returns, but making the return experience difficult for them won’t decrease the number of refund requests – it will just decrease your total sales, and customers will seek out more flexible alternatives.
Instead, by developing clear return and refund policies that are automatically enforced through a self-service platform, customers will feel confident that your brand stands behind its products. They’ll be encouraged to buy more frequently from your shop, and to purchase higher-value items.
Even if they need to return some products, they’ll likely be back for more in the future. 95% of shoppers say they’d buy again from a retailer who provided them with a great returns experience – and 82% of shoppers who returned an item to an ecommerce store said that they’d purchased from that brand before.
So by using automated returns management technology to enforce your return policy and help your customers quickly get full refunds or exchanges for their unwanted items, you’ll be able to provide them a great experience that encourages them to continue purchasing from your brand.
Want to learn more about using returns management technology to provide a better returns experience for your apparel brand? Contact our team for a demo.
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