04 Sep Creating a Fair Refund Policy
Any business that sells products will eventually be faced with a refund request. It is therefore important to craft a fair refund policy. A fair policy for one company may not be fair for another, so business owners need to tailor their policies by evaluating their own credit card processing methods, sales volumes, clientele, expenses and moral philosophies.
1) Can customers cancel their orders?
Sometimes customers are hit with buyer’s remorse. Therefore, many businesses offer a grace period during which customers may cancel their orders for a full refund. A reasonable grace period might be 24 to 48 hours, but the exact timing depends on the business. Customers tend to greatly appreciate a grace period, and most merchant accounts enable refunds to be issued without a hassle.
2) How will lost or damaged items be handled?
A fair refund policy must have a plan for items that are lost or damaged during shipping. No customer should be expected to accept the financial loss of items that were damaged in transit. Business owners can use shipping methods with insurance to protect themselves. Although the business owner should take responsibility in such situations, it is fair for the business owner to require documentation of the damaged item. The business owner may also require that the damaged item be returned. If the damaged item must be returned, it is strongly recommended that business owners pay for the return shipping.
3) Can items in good condition be returned?
At times, customers simply change their minds about items. Many businesses do not provide refunds in these cases. Others offer a 30-day or 60-day money back guarantee. Other businesses offer an exchange or refund only if the customer pays return shipping. All options are fair because the business held up its side of the bargain.
4) Will costs related to merchant accounts increase?
When choosing a refund policy, business owners should educate themselves about any potential charges that might result from additional credit card processing for refunds. Having a refund policy in mind when choosing how to process credit cards will help avoid any unwelcome surprises.