For ecommerce brands, returns are an all-too-common part of the customer lifecycle. Research shows that customers return 15% of their online purchases, compared to 5-10% of what they buy in-store. Sometimes, customers order multiple items to compare sizes, colors, and other factors – they may not be sure how they feel about an item until they’ve had the chance to try it out.

Accepting returns for used and open box items helps your business address these realities.

A flexible returns policy makes customers more confident in making an initial purchase because they can return used or worn items. For example, customers are more likely to purchase shoes online if they can return poorly fitting shoes, even after wearing them. Your return policy also helps you navigate quality assurance for returned items, costs, logistics, customer support, and automation.

The best returns policy appeals to your target audience, but protects your business from abuse. Here’s how to design a used merchandise policy.

Why you should allow open-box returns

Reduce waste
Each year, returns generate around 5 billion pounds of waste in landfills. Many of the products are in excellent condition, some even unused. The practice of throwing away products before full use encourages the disposal of precious resources which are becoming scarce.

An environmentally conscious return policy for pre-used, worn, and open-box items encourages customers to return items after wearing them and helps your business reduce waste. Reselling or donating these products for use also reduces waste and encourages the full use of limited resources.

Differentiate yourself from competitors
A customer-friendly return policy differentiates you from brands that don’t accept used items returns and those with difficult pre-used items return policies. It also acts as a marketing tool by showing that your brand cares about the customer’s right to returns, and prioritizes environmental sustainability.

Consequently, your used items return policy differentiates you as an eco-friendly brand and helps you attract new customers and retain existing ones.

Manage customer expectations
The best way to avoid future disagreements with customers is to define your post-purchase customer experience clearly. Ensure customers have access to all vital information before purchasing from your store.

For example, if you sell undergarments, you may have a return policy on other items except for underwear because it is unhygienic to give away and resell.

An explicit return policy for worn items prevents any disagreement about returning underwear after purchase. However, you can offer complementary services, such as fitting consultations and size guides, to help customers select the correct items and reduce waste.

Build customer trust
As a customer, the odds are that you’ve bought quality items but later realized that they don’t fit you, or your purpose. However, since the items are in great condition, you may be at a loss on what to do. Do you trash the items? What about donating them or reselling them?

Like most customers, you may not feel confident in brands where you cannot return items after using them, even if they are in excellent condition.

A return policy for open and used items gives customers a sense of security, making them more likely to trust your brand and make an initial purchase. It also communicates your need to ensure customer satisfaction and encourages customers to purchase from your brand in the future.

You should display your return policy clearly to dispel any fears that you have a complicated return and exchange process. Remember that if a customer cannot find your return policy because it’s in an obscure location, you may lose them for life.

You can display your return policy for worn items on the following:

• FAQ page
• Checkout page
• Shopping cart
• Product page
• Website chat tool
• Your website’s footer

How to create an effective returns policy

Consider the return window
How many days do customers have to initiate a return? You should state the allowed window period for returns clearly in your policy. The window should be long enough for customers to use goods and confirm that they meet their expectations. You can also leave the window open for second hand items such as gear, tech tools, and shoes.

However, an extended return window may open you up to manipulation by customers looking for free, new replacements. Take the example of L.L Bean, a clothing and outdoor recreational equipment retailer. The company once had a lifetime policy. However, it reduced the return window to within one year of purchase for a refund.

The company noticed that customers abused the policy for a lifetime of free product replacements, despite enjoying many years of service from their products. Others were seeking new refunds for third-party purchases.

30 days after the purchase is a standard window for most stores. However, the duration depends on the sensitivity of your goods and the time needed for customers to report satisfaction. Be specific about when the countdown begins to avoid any confusion.

Set the conditions of returns
Set the conditions for accepting used returned goods. Do you accept used products without original purchase receipts? Do you require clean products to process a return? Make each condition of acceptance clear to prevent any misunderstanding.

For example, you can set limits on used item returns by rejecting items that are:

• Damaged from excessive wear and tear
• Missing a clear brand label
• Soiled, contaminated, and dirty
• Marked under the final sale policy, e.g., underwear or generally in contact with human skin and fluids and therefore unsafe to resell or donate

For example, Allbirds allows returns within 30 days from purchase but does not accept opened socks and undies. The company also only allows in-store returns within the country of purchase.

Establish restrictions on returnable items
Indicate what can and cannot be returned to your store. For example, a no return, no refund, or no exchange policy against pre-worn undergarments and swimwear returns makes sense for hygienic reasons. Summersalt considers all underwear, bralettes, towels, face-covering as final sale items, which means there are no returns, refunds, or exchanges.

Explain how customers should initiate returns
Explain in clear, simple instructions how customers should initiate returns for different goods. For example, customers can return used items to your store, or mail the items to your warehouse or a specified location.

For instance, REI customers can trade in used gear in the stores or initiate returns on the Re/Supply used gear website. Furthermore, customers can return used items purchased online through mail within 30 days after the purchase.

You can also create and promote third-party locations, making it easier for customers to return used items. For example, you can use lockers in transit stations or establish bins in centers such as malls, train, and bus stops. You can also set up agreements with other retailers. Batching the returns to a suitable location reduces collection costs and ensures that customers return used products.

State any fees associated with returns
Reverse logistics is costly because it includes transporting, cleaning, processing, and re-packaging some return items for sale. As such, you may choose to charge your customers a return fee.

Your returns and exchanges policy should clearly show if there are any costs for returns. For example, if you offer free returns, even with shipping, inform the customer. However, if you transfer any of the costs to the customer, show the exact price and explain why you charge it.

Make your policy sustainable
The retail returns process generates more than five billion pounds of waste in landfills. This is often due to the absence of a sustainable solution to handle returns and used goods. As consumers become more eco-conscious, a return policy promoting sustainability and reducing your carbon footprint is great to attract customers and stand out from the crowd.

Allbirds donates all its slightly used shoes to Soles4Souls, who then distribute them to others in need.

Automate processes
Establish all processes required to facilitate returns from customer education, online support, customer service to accounts, and payments. Where possible, automate the return processes for customers by making it easier for them to initiate returns, and customer service agents to handle used returned goods.

For example, you can use Loop to set up an exchange center for use items relevant and allowed inventory for exchanges based on a customer’s purchase history.

Want to learn more about what Loop can do for your team? Contact our team for a demo.