Most business owners frown upon product returns because of the profit loss that comes with them. But, smart business owners know that there are also advantages to this “problem.” In fact, you might even get to increase your customer base when they are returning your products.
You can minimize the hassle of managing product returns if you have an efficient returns management software program doing all the heavy lifting for you. Aside from that, take the following steps to turn a profit loss to a profit gain.
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Implement an exchange policy
Instead of implementing a return policy, use an exchange policy instead. When people shop, their desire to buy a product is often much stronger than to have their money returned. It’s the reason when customers return products to a store, most of them choose to buy a different product rather than get a refund. So, you can use this mindset to convince your customers to exchange their products with something else rather than just return the items to you.
Implement a lenient return policy
It may seem risky to implement a very lenient return policy because you’re actually telling your customers that there aren’t any ramifications if they decide to return their products. You may also think that customers will be more likely to return your items as a result, costing you a fortune.
But according to marketing experts, this isn’t often the case. With a lenient return policy, customers will think that they can return their items anytime. They will then end up never returning an item because of the psychological effect called “endowment effect.” This results in a person becoming more attached to an object the longer it stays with them.
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So, if your customers delay returning products because they know they can do it anytime due to your lenient return policy, the more they will become attached to the items and eventually, decide against returning it to you.
Display your return policy immediately
Customers are often wary of businesses. Despite the fact that they want to buy something, they still don’t want to feel like they’re being duped out of their money, which is fair. And here is where you can use your return policy to your advantage.
Some businesses focus more on making sales rather than building relationships with their customers. These kinds of companies often place their return policies in places where most customers would find it difficult to see. If you want to earn customer loyalty, you shouldn’t do this.
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If you’re running an online store, you should display your return policy right where any customer can see it. You can post it on the homepage of your website so that your customers can see it right away, which will lead them to think that you’re upfront about the way you do business. If they see that you’re being transparent, then they might patronize your business more than others.
Product returns may be a bane for some business owners, but if you know how to tweak them a bit, you’ll find that they can actually be advantageous for you.