Define Sales Returns

A "sales return" occurs when a customer returns goods or services to a merchant and requests a refund or replacement. This usually happens when a customer is dissatisfied with a purchase.

Sales Return Process

To make a sales return, customers may place a phone call, send an email or travel to the merchant's store. If the customer chooses to phone or email, he may have to ship the product back to the merchant to receive the refund or replacement.

Goal Is to Keep Returns Low

If sales returns are very high, that may be a sign that your customers are dissatisfied, and your products may need to be improved. Business owners should closely monitor returns and respond quickly to any trends.

Make Returns Easy

To keep your customers satisfied and to entice them to keep shopping at your business, businesses should make the process for sales returns easy and stress free. Avoid requiring customers to sign forms, wait in long lines and pay any fines.

Receipt May Be Required

When a sales return occurs, most retail stores require that the customer have her sales receipt to get a full refund. Without a receipt, the customer may only be eligible for a store merchandise credit.

Return Reason Is Often Recorded

When a sales return is processed, customers are usually asked to provide a reason for the return (Examples: too large, wrong color) This information is often captured in a business database and used for reporting purposes.

Returns Are Normal Part of Doing Business

No matter how wonderful a product or service is, business owners should expect some level of returns. The percentage of returns will vary based on the product type and the industry.

References

• Suite 101: Sales Returns