Starting a new business is an exciting time, with your focus most likely being on getting your products out there and racking up some sales. However, there is a flip side to the sales process, which can be vital to retaining customers and successfully mitigating losses. Refunds and returns are a much larger part of the selling process than many think.
In fact, the average return rate in eCommerce was nearly 17 per cent, per 2024 figures.
Naturally, some lines of business are more prone to returns and refund requests than others, like the fashion sector, but you’ll invariably encounter such a request regularly, even as a new business. So, it’s very important to consider your approach to refunds and returns, especially when many customers will have the option of issuing a chargeback handy.
Speedy Payment Systems and Chargebacks
With refunds, if requested and deemed valid, it’s always best to be quick when issuing and clearing the refund. This will greatly come down to the payment system that you use. Systems that let you send back refunds quickly will help you to uphold a strong reputation with customers, even though refunds and returns denote a product that didn’t suit that customer. Another aspect to consider in this regard is the potential for a chargeback.
Chargebacks essentially circumvent the usual returns and refunds process, with the payment provider performing a reversal of funds at the request of the customer. Some estimates put businesses as actually paying close to $4 per $1 chargeback. Now, there are payment systems that do away with chargebacks while still catering to speedy transactions.
On a crypto payment gateway, chargebacks don’t exist, fees are minimal, and transactions are swift. With the profitable and simplified solution, the gateway can be integrated with any eCommerce and accounting software, and payment activity can be seen in real time. So, it’s easy to find and issue refunds whenever the occasion calls.
The Benefits and What to Consider
Whenever a customer has a problem or isn’t satisfied with their product, the ensuing interaction offers a good opportunity to take feedback, learn, and improve to become an even better business. It might not always be the most pleasant of interactions, but almost all feedback is valid, and a return or refund request does give you a second chance to leave a good impression, perhaps an even better one than expected.
To make the most of this potential for the inevitable refund requests and returns to come, you’ll need to have a firm policy and system in place. You should clearly post your returns and refunds policy, or a link to it, on every sales page so that customers have complete clarity from the get-go. Within that policy, you’ll need to detail what products are exempt from returns and refunds and the conditions customers need to meet to issue a refund.
You don’t necessarily have to offer direct refunds either. Setting up a system for exchanges or to get store credit is another way to go. If it doesn’t infringe customer protection laws, you can state that refund requests and returns aren’t accepted due to the nature of the products. Should you accept returns, you’ll need to factor in the cost of postage for you or the customer, possible courier fees if you issue the return, and where the returns go.
Refund requests and returns are inevitable for any business, and while the right payment systems can let you deal with these with ease and without the worry of chargebacks, it’s important to have a full and clear policy in place.
