Why You Should Issue Refunds ASAP

Aaron Clements | Oct. 23, 2020, 6:47 p.m.

Online commerce is growing at light speed and with it comes an increase in returns volume. There's a ton of issues with returns and the multiple areas they impact for a brand and the planet for that matter, in terms of economics, sustainability, pollution, excess inventory etc. but I'll address those in later articles.

For now I want to encourage you to have a paradigm shift in how you look at the timing of issuing refunds. But first we have to get a couple of thoughts on deck.

View your strategy and process for returns as an opportunity to create loyalty and drive more sales then, simplify your returns process so it's frictionless for your customers. Think "set it and forget it".


Let's look at the timing of refunds. In the old days of online commerce (like 1 day ago and prior) the logic was and still is, wait for the return, inspect it, then issue a refund. This approach is baked in from the days of wholesale, long before online commerce was a thing.

There's good reason for this too. I mean think about it, if you buy something at a brick and mortar store you don't get a refund until you bring it back to the store. There's also the whole financial piece which needs to line up a refund with product physically and more importantly, systematically going back to stock. You know the whole credit memo's and reconciling thing.

The problem with this is brands on average take 8-21 days for a return to be processed and the customer refund issued. Think about that! Your customer has to wait no less than 8-days to get their refund. And trust me, that's for a tiny fraction of brands that have a good returns process in their operations. The reality is it's probably somewhere in the middle for the majority of brands.

If you shorten the time of a customers refund you will dramatically increase your chances of having them repurchase from you. The longer you take to do it the longer you're holding their money. 

The answer is simple.

Make it a goal to get customers their refunds within 1-2 days of initiating their return.



Issuing refunds quickly is a chance to re-market to them so you can increase the odds of a re-purchase. This is key. Forget about the mechanics and "what ifs" for a moment and make getting another sale from them your first priority.

Rework your returns process by mapping it out in a linear fashion so you can understand where the pain points will be in the new process. Then map out a new process where you issue refunds quickly so you can put new steps in place to deal with this.

The pushback from brands will be this: What about quality control, or how do I know they'll send it back? My answer to this is.

  • Don't argue with customers over quality, just make your refund policy a no questions asked policy.
  • Don't issue the refund until you get notification their return has been scanned by the carrier, which usually happens within 24 hours of a customer initiating a return. 

A note on quality. My context is more along the lines of apparel and fashion. I realize this might not work for electronics or other products with warranty agreements.

Time to take action so you can grow your sales by making returns and refunds quick and easy. 

Good luck!

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