Av Trimble smartdelivery | Article | March 7, 2019

What Return Strategy Should You Choose?

Returns are a serious retail problem, costing retailers billions of dollars. As a retail operations manager, this problem is one that you should focus on if you want to cut damaging costs. But how should you approach this problem? Scrapping your returns service all together may not be a great idea. According to this study, 88% of shoppers want to be able to return items. So, how should you solve this serious problem? One way to do it is by tweaking your return strategy to prevent detrimental costs while also bearing customers’ needs in mind. Here are five return strategies that you could consider for your e-commerce or retail store.

1. Exchange only

Some stores don’t encourage refunds, using the “Exchange only” return strategy. What does this mean? Well, a customer can exchange a product if it’s defective, the wrong size or not to their liking. Stores implementing this strategy usually require customers to purchase something that’s equal in value.


  • This strategy ensures that your store loses minimal money in the returns process.
  • Unless the item is defective, you can resell the item to another customer.


  • This strategy can hinder your returns experience. A customer who doesn’t like a product and has no genuine reason will be forced to keep the product. This might negatively impact the customer’s brand perception.

2. Store credit

Retail giants such as Bed Bath & Beyond, and JC Penny, follow the store credit return strategy. Any return without proof in the form of the original receipt receives a refund as store credit. Some e-commerce and retail stores only refund in store credit, which ensures that the store doesn’t lose money on returns.


  • This strategy ensures that your store prevents loss of revenue caused by returns.
  • Unless the returned items are defective, you can resell them to other customers.
  • You can also save on shipping and delivery costs by deducting the same when giving customers store credit.


  • Customers may be forced to buy from a collection they don’t like, leading to the possibility of receiving a bad review.

3. Case-by-case return policy

Some brands such as Nordstrom have no return policy. They handle returns case-by-case, deciding how best to satisfy a customer. Sometimes, these stores take back items that don’t have a receipt or even tags. The store’s return policy page claims that the brand’s top priority is to deal with customers “Reasonable and fairly,” which often results in Nordstrom making a full refund.


  • Having a case-by-case approach to returns gives you the flexibility to favour important customers and keep them happy.
  • Case-by-case returns mean you can sort through fake and genuine returns and keep more customers happy.


  • If you don’t have a rigid return policy, it will be tough to manage customer expectations without making a loss.

4. Conditional returns

If your company sells a wide range of products across verticals, you could encourage returns on only certain types of products. For instance, if you sell clothing, you could encourage returns on say, jeans, but disallow the returns of innerwear and lingerie. Using the condition returns strategy, you can create a return policy that reduces your losses and increases the likelihood of customers keeping the purchase.


  • You can reduce returns while also balancing customer satisfaction.
  • You can avoid getting returns of products that cannot be resold, without affecting customers’ perception of your brand.


  • Control over returnable items may be hard to have.

5. Partial and complete refunds

By offering complete refunds, you can gain the favour of customers. While this may increase purchases from your store, those purchases won’t necessarily convert into revenue. Instead of offering complete refunds, you can create certain conditions and offer partial refunds when a customer’s case meets those conditions.


  • Customer engagement and purchases with your store will increase.


  • Refunds will affect your revenue generation and increase operations costs.

Based on the size and type of your business, you can choose from various return strategies to optimise customer satisfaction and reduce return-associated costs.