Extending a return policy is one of the simplest ways to gain buyer confidence. Buyers tend to trust sellers that stand behind their products. By offering a return policy, you are in effect saying, "I trust the quality of the item that I'm selling". It also gives buyers a mechanism for getting their money back if they're not happy with their purchase. Some buyers need that extra bit of confidence to make a purchase from an unknown seller; even if the seller has a good feedback score.
Now, many sellers are probably thinking that they're going to get stuck with a bunch of merchandise returns and having to go through the time and effort of relisting all of these returns. Actually, you'll find that very few of your customers will return their purchases. Remember, your buyer purchased your item because they either wanted or needed it. Most buyers aren't just going to return an item because you offer a return policy.
As a seller, you can actually turn your returns into a money making policy. First of all, you need to clearly state that your buyers are responsible for all shipping costs (that includes the initial shipping fees plus the return shipping). By doing so, you are able to keep the handling fee that you charged in your initial transaction. Although this probably isn't a lot of money, But it covers any inconvenience you may encounter by having to retest, repack and relist the item. And you can still resell the item for it's original price plus shipping & handling.
Now you think, yea but I'm losing money because I had to pay eBay listing fee and Final-Value-Fee (FVF) on the returned item. This is a common misconception. Ebay will refund your FVF if you file an Unpaid Item Dispute (UID). When a buyer returns an item, you need to file an UID and just select the option for: "Buyer and Seller have Mutually Agreed to Not Complete The Transaction". Ebay will send an mutual agreement e-mail to your buyer; once the buyer replies to this e-mail, eBay will automatically refund your FVF. eBay will credit your listing fees once you relist your item (make sure you select relist). Bottom line is you shouldn't lose any money when a buyer returns a product.
Here are several things you should consider when establishing your return policy:
First of all, you shouldn't offer a return policy on electronic components (or other items that can be damaged by buyer installation). You never know what a buyer will do when they attempt to install an electronic component and you don't want to be responsible for your buyer's mistakes. What you should do for this category of products is have a Dead On Arrival (DOA) policy. a non-DOA policy gives buyers confidence that you have tested and guarantee that the item was working before it was sold. I sell lots of electronic components and have found that most buyers are satisfied with a non-DOA policy.
Another thing to consider when establishing your return policy is a restocking fee. Many sellers use a blanket restocking fee for all returns. I find this seller policy conveys an attitude of, "we'll accept returns but you're going to lose money". Some items will require retest, or some other effort, by the seller to prepare the item for resale, and in these cases, I feel it is completely appropriate to include a restocking fee in your return policy. You should clearly state that you will assess a restocking fee if a returned item is found to be in proper working condition. I usually add a statement like, "I reserve the right to assesss a 10% restocking fee if the item is found to be in proper working condition."
I hope you find these tips to be helpful in establishing your own return policy. If you have any comments, questions, suggestions or corrections feel free to e-mail me. I'm always interested in improving my guides & reviews.
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