Is Your Returns Policy Useful Or Useless?

Website Returns Policy

[robbo]

At some time most of us will be faced with a customer requesting a refund,but what about when its outside your refund policy time limit.
Ordinarily it seems to me the best solution is to come to an amicable agreement with the customer and move on,but what happens if it is a largish order for something you will find difficult to resell...why should you lose out?
This has recently happened to us.
Our Returns Policy - Full refund if notified 2 weeks after receipt of the product (whether it is faulty or not). Our return policy is easy to find on the site in 2 places "Returning Goods" and "Guarantee" . It is NOT however shown to the customer during the checkout process with an "I Agree" to terms button.
Order Value $700 sent to USA (We are 10000 miles away).
Product 300 of the same widget - Made new for customer and difficult to resell all of these if the return is accepted.
Email from the customer 2 weeks after receiving the product- that they all "love the widgets".
Email from customer 6 weeks after receiving the product- that they want to return the widgets.
Email from us to customer to find out why - they reply that they "really like the widgets", but want to return them. No other reason given,it appears they just changed their mind,we don't even know if they have been used at this stage.

Here's the dilema :
a.) If we agree to the refund we will have a product that will be difficult to resell,we will have to pay re-importing duty,we will be out for cc processing fees (we use a 3rd party processor who doesn't refund these) - we can't see any point in issuing a partial refund which could still lead us open to a further dispute unless the customer agreed to sign something, which is doubtful.
b.) If we refuse the refund the customer could still pursue a bank assisted dispute. This would subject us to further fees,a possible loss of the product if not returned and a black mark against us. Worst case - we lose the product,the money,the customer and some of our reputation, a black mark against us. I assume that this is a possibility/probability...no experience here yet..

It seems that all the cards (sorry for the pun) are stacked against us - Just to reiterate - the customer has received what they ordered and are really happy with the products and the return is requested outside of our refund period (reason unknown) - should we entertain it,have we any choice?

Many questions,but does anyone have answers,experience, suggestions ..?
Thanks
Robbo

[ecommerceprofit]

Did you receive a signed invoice? If so, good - but next time make one up that will protect you from chargebacks - talk to your merchant bank on what wording should be on the invoice to help protect you. I would fight them - how are you supposed to make a profit when your return policy is too liberal - you have to fight back sometimes "if" you think you are right and they are unreasonable.

[robbo]

Thanks for your reply.
Yes , I agree with you about fighting back,if it is not too expensive and a there is a chance of a positive outcome.
We don't have a signed invoice. Just payment from a credit card.
We try to have a return policy that is quite liberal, to give the customer a period of inspection,after all they have to see the goods and they can't do that until they arrive.
In effect take the risk out of the transaction for the customer. This is out first case like this in 4 years.
If it is a higher ticket item and the customer is getting discounts our return policy is more restrictive,so we usually insist on wire transfers.We will send samples first,but for a high value order we are wary about being at the mercy of a credit card company,unless we know the customer well.
My point is that we can put any restrictions we like in our return policy but ultimately it doesn't matter as things are decided by the credit card companies whose first interest is their customer - not us.Is this correct,unless certain conditions are met?
i.e I read this -
"Card Not-Present Transactions
your web site should include a screen with your return or refund policies, which appears automatically during the check-out process (that is, it is not on a separate disclosure screen that the customer has to click to open). The screen should include I Accept or Agree buttons for the customer to click on before completing the transaction, indicating that he or she has read and agrees to your policies.
If a cardholder can complete an Internet transaction without clicking an Accept or Agree button to indicate acceptance of your refund, return, or cancellation policy, proper and adequate disclosure has not occurred."
What percent of us do this?
What precautions do people here take to ensure that their returns policy is enforceable on higher ticket items,or any sales for that matter?
I can't find much information on this,so I'm interested to hear what experiences others have had.
Robbo

[ambellina]

Most of our orders ship domestically, and so far we haven't had any return issues from other countries. But if an order we shipped halfway around the world got a return request almost 2 months after the customer received it and expressed that it was just what they wanted, i would definitely push to find out exactly why they want to return it. I'm not sure exactly what brand of fishiness they've got going on, but something is odd.

If they are 100% insistent that they don't want the widgets, maybe you can help them find another solution instead of sending them all the way back to you for a refund, like selling to another party in their country or finding a different use for them. I'm not sure which would be the bigger hassle - fighting the refund or dealing with the red tape if you do decide to take them back. They both sound like "ew." Good luck!

also, if they order from you again, i would definitely enforce stricter terms of service on them than you might normally for a customer, and spend lots of time discussing the product with them to make as sure as you possibly can that they understand what they are purchasing.

[robbo]

Good idea about selling the product in US as it's already there,something for us to consider.

Given the facts as stated in my first post I wonder - are we protected from the customers credit card company refunding and if we are not how do you other merchants protect yourselves from this happening in customer not present credit card transactions.
I am not talking about fraudulent orders,but genuine orders where a return is requested outside of your returns policy as in this case. What is the norm for a period where the customer can decide that they don't want something i.e. If no return policy existed.

There is no dispute whatsoever about the product,or it not being what the customer ordered,it seems they just changed their mind..buyers remorse 6 weeks later!

What are you other ecommerce merchants doing to protect themselves from this happening to you?

Are there guidelines for an enforceable returns policy as it seems a grey area to me where we are at the mercy of what the card companies decide?

I am actually happy that the customer has contacted us first and not their credit card company,at least it gives us the opportunity to explore a solution and I appreciate your suggestions...thanks.

One question only though :-

Is the customer entitled to a refund?

[palain]

I agree that this is an odd outcome. I would request a phone number and talk to someone. Ask if the product had been opened or used.

If your profit margin is high, you can offer a replacement in order not to "loose the sale"

I have gotten returns for custom work also and it's not pleasant to have something sitting on the shelf for a year. This was 8 weeks after the items had been shipped. I ended up giving them away at a local event as a raffle prize they were happy to get 100 widgets to draw. I didn't loose the sale though as I was able to send replacements (they had ordered the wrong size) and still not make much money but not loose any either. The wrong size order repeated itself a few times so I ended up not offering the small size item anymore.

One client (Canada Department of National Defence DND) wanted to know my return policy prior to ordering 200 custom made widgets $1300. I explained that they were custom made and would prefer to send samples which they could approve. I sent them various samples which the commander was able to choose from. They wanted to pay by CC but I insisted to open a supplyer account and they sent me a PO.

All in all, Returns on Custom work is not pleasant at all. Since everything in my realm is made to order, the losses are low and returns are low.

I had a consultant client who ordered 50 custom lettered, fitted widgets ($300) and 2 weeks later ended up with the widgets on my shelf. He explained that his client had not approved it. What do I do with widgets that say something specific like TRAINEE. Can't even give THOSE away.

It is the nature of my business and items are priced accordingly. I don't like it but I swallow whatever little losses I get.

[alison]

As an Ecommerce vendor, you can post as many return policies, and even have the customer check off an agreement before they process the order, but they still can work against you.

The best thing to do is work something out with the customer-be extra nice :)

[CernyM]

For B2C customers, we always issue a refund, even when its outside our normal policies.

For our B2B customers (wholesale accounts), we don't issue refunds at all - unless there is a defect or shortage. That's standard in our industry and we make sure all new clients understand.

[robbo]

Interesting what you say that you can post return policies and check off an agreement and they can work against you. So they are pointless if I follow your reasoning.Why is this?

Our returns practice is similar to yours CernyM with our treatment of B2C and B2B Wholesalers.You say you make B2B customers understand that you don't issue refunds - how do you,or people here do this when a credit card purchase is made?

Do merchants here accept payment for wholesale orders with a credit card if the customer is not known to them (after verification checks etc) and if so,do you have any special agreements that they must sign first,or limits.

It seems to me that we have to regulate our own risk and exposure when receiving payments by credit card as we cannot rely on our own terms of business even if shown to the customer...Or am I wrong?

[ispy]

When you first submitted a merchant account application there was a space which asked about return period. If there is a dispute they will refer to this when deciding whether you win or lose.

Why would you not be able to refuse a return if it's outside of the return period?

In the absence of an exceptional circumstance

Working something out with the customer

may be what they expect from a spineless merchant, but if word gets out it also pays to be fair to everybody equally.

[jecasc]

I don't see a legal way for your customer to get his money back by a bank dispute.

He has ordered the products, he has payed for the products, he has confirmed that the has received the products, that they were in good shape and exactly what he ordered. And he has exceeded your return time limit.

The only way for him to get his money back would be to make false statements about this purchase. Or in other words: fraud.

So I would politely refuse the return of the products and if he tries to dispute his payment threaten legal action.

[robbo]

We also feel that the customer is not entitled to a refund.

We do have a bit more of a balancing act as we sell through a third party processor who is a reseller of our products,so technically we do not have final control and are bound by what they decide(but that's a whole new thread).

Appreciate all your comments.

[CernyM]

You say you make B2B customers understand that you don't issue refunds - how do you,or people here do this when a credit card purchase is made?

Do merchants here accept payment for wholesale orders with a credit card if the customer is not known to them (after verification checks etc) and if so,do you have any special agreements that they must sign first,or limits.

We tell them up front. Also, in our industry, no returns for wholesale accounts is the norm. Some customers try to negotiate return or exchange rights for merchandise that doesn't sell the way they expect it to, but very rarely do we find a B2B customer who expects to be able to do returns in the standard course of business.

We don't do anything special for verifying wholesale accounts. We talk to each on the telephone before accepting orders (not so much for risk mitigation as to get to know our customers and help them make the best choices for their initial orders). We don't take on any customer that would be large enough to make a material difference to our business if they decided to dispute payment.

[robbo]

We like many ecommerce merchants take wholesale orders without them having to apply for accounts first.
We build discounts into the shopping cart for larger purchases.

What interests me is the bottom line - our legal rights and correct procedures to protect ourselves specifically for customer not present credit card internet transactions.

Not fraudulent transactions,but when there is a dispute regarding returning goods and whether or not they are entitled to do so.

I found this on VISA's site on its Rules for Merchants.

"Return, refund, and cancellation policy for Internet merchants . This policy must be clearly posted to inform cardholders of their rights and responsibilities (e .g ., if the merchant has a limited or no refund policy, this must be clearly disclosed to cardholder on your web site before the purchase decision is made to prevent misunderstandings and disputes) . The limited or no refund policy must be displayed on a screen that requires the cardholder to “click and accept” the terms of your policy . This policy page cannot be bypassed."

So it seems that unless this is done there can be a dispute and the merchant would lose.I presume if you have wholesalers apply for accounts prior to purchasing and this is all discussed then it is different, but they probably wouldn't pay with a credit card anyway.

We have a cap on the size of order we accept with a credit card payment.

[CLR_Marine]

I feel our return policy is pretty good. It states out right that the customer is responsible for all shipping fees and a 25% restocking fee for shipping materials that were used and the added labor. I have not had a customer argue about the charges yet, as soon as I let them know what they are for. After two weeks if there are any problems the customer has the manufacturers’ warranty.

[MrFishGuy]

This sounds like the customer loved what they got, used them for whatever purpose they ordered them for and then decided to return them when they were no longer needed.

Unfortunately, the credit card companies offer far to much leeway to the customer for a charge back with almost no recourse for the merchant. If the customer is willing to lie, he can make up almost any excuse(it's not what her ordered, defective, incomplete order, etc...) and the credit card company will side with him.

[robbo]

After researching this it is apparent that the dice are loaded... and not in our favour.

CLR_Marine - if you have reasonable customers,coupled with your good people management skills the customer might agree to your restocking fees and such like.After all,it may be reasonable.

If however you have not properly disclosed this before the customer has bought your widgets (and he has not clicked an agreement) you could do your refund less your restocking fee - the customer could then do a chargeback for the restocking fee and you would lose and also have a chargeback fee. I don't know your checkout procedures,but if you do not do as VISA have said as quoted above you will lose.

If you think about it the disclosure requirement is reasonable if you are changing normal accepted practices (whatever they might be).

Our particular case is of an inexperienced customer in our industry changing their mind. We have agreed a compromise to help the customer out. I feel we are within our rights to reject it,but it has been useful to try to explore different procedures.
We will be out a bit,but it is an area we needed to fine tune and this has helped us do that. And like was said - if things got nasty the customer could change the story and problems start and negative energy starts flying about.

Even if things change with the customer later we feel we can show that we have been very reasonable with our dealings with them and the compromise we have agreed is without having accepted any liability on our part - a goodwill gesture.

Best for us to use this as a lesson in damage limitation and move on.

It has made us more aware that high value credit card purchases are the single biggest risk factor in our business.

[fiu88]

Chalk it up as a learning experience...We find most problem customers buy our lower priced goods we sell items from 35-1400$...Maybe set up a US warehouse for returns? You have to expect some problems..just deal with them quickly,and move on to positive things...

[vincevincevince]

This is out first case like this in 4 years.

When you have a liberal returns policy, you gain orders through it but at times you will have to take the associated hit. It's like self-insurance; you save every month by not paying premiums but you lose on the day when something needs paying out.