Business tips

How to manage Christmas returns (and increase sales) with a great returns policy

From accepting returns without receipts to covering the cost of shipping: we look at five questions you should ask yourself now to prepare for post-Christmas returns.


While the lead up to Christmas means November and December are some of the busiest months for eCommerce, January and February are frustratingly all about returns. According to online marketplace Gumtree, close to three quarters of Australians receive at least one unwanted present at Christmas – and it’s safe to assume that many make their way back to virtual, as well as physical, shelves.

Having a well-defined Christmas returns policy will not just help you prepare for the deluge, but also enhance your value proposition. An Australia Post eCommerce survey found that concern about returns was cited as the main barrier to online shopping, and that retailers who respond with well-defined return options increase customer confidence when shopping online.

Here are five points to consider when formulating the terms of your Christmas returns policy.

1. Will I allow change-of-mind returns?

The Australian Competition and Consumer Commission (ACCC) website states that Australian businesses are not obliged to accept a return if the customer got what they asked for but simply changed their mind, found it cheaper elsewhere, did not like the item or had no use for it. But as competition in the online market gets tougher and customer expectations escalate, most retailers now allow customers to return merchandise, knowing that many people won’t shop at the webstore without such a guarantee.

2. Will I offer free return shipping?

This is a trickier one. According to the ACCC it is reasonable for a seller to cover freight costs if customers want to return faulty goods, or if an item needs to go back to the manufacturer. For all other returns, it is the responsibility of the customer to arrange – and pay for – transportation.

That said, the offer of free return shipping is a major drawcard for customers and an increasing number of stores are providing it to get a competitive edge.

Australia Post offers a range of returns solutions, which enable businesses to decide whether they or the customer pays for return shipping.

3. Will I accept returns without a receipt?

When it comes to returns, gift recipients have the same rights as customers who buy directly from a store; however, they are often unable to provide proof of purchase. To pre-empt this situation, you might consider adding a gift option to your shopping cart; when selected, you could include a gift receipt with outgoing parcels. However, given that monetary refunds must be provided to the original form of payment, gift recipients are most likely to walk away with an exchange or store credit.

In the absence of a gift receipt or any other proof of purchase, businesses are not required to accept a return. Nevertheless, as a gesture of goodwill, you could offer a credit note or an exchange equivalent to the item’s current selling price.

4. Will I offer full refunds for seasonal or discounted stock?

Customers are entitled to a full refund if they encounter a major problem with their purchase regardless of whether the item is seasonal or now available at a reduced price. For all other cases, it is up to individual e-tailers to determine their policy (though most would honour the original price when a receipt is presented).

5. How long is my return window?

While retailers cannot enforce a time restriction for the return of faulty products, they can set a time limit for everything else. Many retail businesses give customers a month to return an item but at the other end of the spectrum popular e-tailers such as Zappos give customers 365 days to return unwanted goods. Many retailers extend their returns window over the holiday period.

Whatever returns policy you implement over Christmas, remember that convenience and transparency are key to delivering a positive customer experience and encouraging future sales.


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