A national newspaper (Globe and Mail) recently reported that refunds in the retail industry on are the rise, citing that 5-30% of all purchases end up being returned to the store. The article also went on to say that refunds are increasing by as much 50% in some categories.
One of the way you can reduce the number of returns is to invest more time uncovering your customers' needs and wants. When you learn more about how the customer will be using the product they are planning to purchase, you can make recommendations. And these recommendations often help your customer see how one particular product would be more appropriate for their situation. If you sell electronics or computers, it is critical to help people understand how to use their new toy, due to the complexity of newer technology.
However, you can still turn a refund into a sales opportunity. Instead of simply processing the refund find out why the customer is returning the item. And when appropriate, make suggestions for different items or products that may be more suitable for that particular customer.
Plus, your refund policy can make a difference whether people buy from your store versus a competitor. My youngest daughter once asked a particular store if they would refund her money if the blouse she was buying did not match her pants. Unfortunately, the store said 'no' and my daughter took her business to a competitor because she didn't want to be stuck with a blouse that she wouldn't wear.
Refunds are a fact of life in retail. How you deal with them makes a difference.