Our biggest problems with customers involve merchandise returns and refunds. We have a fairly strict return policy, and some customers tell us we can’t be so restrictive. We have always maintained that we are free to set our own policies. Is that still correct?
Retailers may be unsure how to address customers when dealing having disputes about merchandise returns and refunds. Are retailers able to maintain their own policies, even though customers may question their restrictiveness?
In most cases, retailers are under no legal obligation to accept a returned item for any reason other than a defect. However, returns and refunds are a sensitive area and you need to balance competitive pressures and good customer service with the need to be financially prudent.
You don’t want to upset a good customer and risk losing future business. On the other hand, you don’t want to let unethical customers take advantage of you and damage your bottom line.
The most important thing is to develop, post and enforce a sound return policy — one that works for your business.
You may choose to make all sales final, to offer only an exchange or to give full cash refunds. You might also set a time limit on returns. If you do limit refunds and returns, you should disclose the policy in writing on sales receipts, a clearly visible sign in the store and perhaps even a label on the merchandise.
Regarding credit card sales, retailers who participate in major bankcard programs are not allowed to give cash refunds or payments on any bankcard sale. Instead, they must credit the customer’s account.
The credit slip must include the merchant name and number, the bankcard number, the date the credit is issued, the total refund, the nature of the return, a merchandise description and the merchant’s signature. The customer should be given a copy of the credit slip.
Retailers who plan to give anything other than a full refund must disclose their intention before making a bankcard sale. Limitations on refunds must be posted in the store and printed on the customer’s charge receipt within one-quarter inch of the cardholder signature. If refund restrictions are not clearly stated on the receipt, the customer can successfully dispute the charge.
