For small business owners, there’s not only the stress of shopping for gifts during the holiday season like everybody else, there’s also the post-holiday gift return blues to contend with.
Even though the holidays can be a boon to your bottom line, obviously, if you have a lot of gift returns, your previous year’s revenue won’t be as robust as you thought it was on Dec. 31.
Here are a few ways to minimize returns your business will have to process….
Spell It Out
During the frenzy of the holidays, perhaps your business experiences a flurry of activity. Still, make sure all your employees take the extra few seconds to tell customers what your return policy is.
There are three steps to this process. First, make sure you can program your return policy on your point of sale system (POS) and synch it with the receipt printer so that the return policy is stated on the back of the receipt. Second, when a customer makes a purchase, your employees should direct customers’ attention to the back of the receipt while, third, dictating the conditions to the customers.
Shorten The Return Period
Who says you have to have a 30-day return policy? Well, some states do have laws governing the disclosure of refund and return policies. However, the overwhelming majority of states have a return policy as such, according to this legal website:
“There’s no right to cancel contracts or purchase agreements. Whether you can receive a refund is dependent on the retailer’s return and refund policies.”
If you’re a business owner In California, you must post your refund policy unless you offer a full cash refund, exchange, or store credit within seven days of the purchase date. If you fail to do this, you are required to accept full refunds within 30 days of purchase.
Currently, no state refund policy stipulates that if you clearly post your refund policy, you have to allow up to 30 days for a customer to exchange a gift or issue them a refund. So why not shorten your return policy, at least for the month of January?
This is especially beneficial for store owners who are selling time-sensitive materials. For example, let’s say you have a clothing boutique. Unless your store is in a warm, year-round climate, chances are most of your inventory will be warm weather clothes.
The problem with a 30-day refund policy is that if you’re getting lots of people returning their sweaters, parkas and such towards the end of January, you might not be able to resell most of the returned items. By February, most everyone will have purchased their cold weather new clothes. Therefore, if you’re able to resell any of the returned items, you’ll likely have to do it at a discount.
If possible, have large signage in your store that clearly communicates holiday return policy.
Consistency is Key With Multiple Locations
Customers can’t stand it when a store with more than one location has different return policies. (This is a recipe for bad Yelp reviews.) Try to make your return policy as consistent as possible if you have more than one retail location.
Use Returns To Your Benefit
Keep in mind that some customers who are returning an item may have been gifted the item and may be a first-time visitor to your store. Train your employees to ask customers who are exchanging or returning a gift if they are a first-time visitor. If the customer responds that they are indeed a first-time visitor, have the employees give the potential customer a brief rundown of the goods for sale or any other relevant information about the business. Does your store give a portion of the proceeds to local charity? Make sure the first-time potential customer knows about it.
Who knows? The first-time visitor may end up being a loyal customer. Offer the potential customer a 10% coupon for signing up for your email list.
Speaking of 10%, your store may take up to a 10% revenue hit because of returns. But don’t let that deter you. Use returns as an opportunity to convert first-time visitors into frequent customers.
Need a robust point of sale system (POS) that can make changing your return policy simple? Contact us today for a demonstration.