eBay instituted a policy this week that requires all sellers to specify a return policy on every listing. While most stores still leave the decision to have a return policy up to the sellers and don’t require it, no matter where you sell, you should have a return policy.

I used to teach a workshop for authors on dealing with bookstores. Nothing I said in that entire class got people more upset than when I told authors they should offer bookstores a return policy for their book even if their publisher didn’t and, if their publisher did, they should see if they could make their return policy better. You would not believe how people would flip out over this. Bookstores could pry that money out of their cold dead hands, they weren’t giving it back no matter what!

Small business owners have a tendency to react the exact same way.

I get it. Small business owners (and authors) are making such a small profit they want to keep a death grip on every cent. They see a return policy as a way for buyers to steal their hand earned cash. But, in the end, offering returns has very little to do with giving people their money back. In fact, a good return policy can mean more sales and more money in both the long and short run and also earn your store loyal repeat business and new buyer trust.

By offering to give money back, you actually end up making more money in the end.

But not every return policy is going to help your business. Does this sound a little familiar?

READ THE DESCRIPTIONS!!! Returns will be offered ONLY for seller’s error so you can’t get a refund just because you were too dumb to read what is offered! eBay is forcing us to offer a refund but if you think you can scam me, try again! Shipping costs WILL NOT BE REFUNDED UNDER ANY CIRCUMSTANCES! Broken items are only eligible for a refund if you paid for insurance.  Packages are shipped at the buyer’s own risk!

The above is a compilation of a lot of real return policies I have seen online. The first thing that strikes you about something like this is how hostile the seller is. That seller is on the defensive. He/she is offering returns but is really unhappy about it. He/She is also only offering it in very specific cases and is putting most of the responsibility and risk on the buyer. This return policy is more likely to turn the buyer off of buying from this store rather than encourage them.

Your return policy is something that you are offering to the buyer as a gift to entice them to buy from you. It shouldn’t be a threat or a rant. There are ways to put even the “bad news” of your return policy in a positive light.

I have had a return policy for a while and I have had to actually issue refunds on less than 5 occasions. The importance of the policy is not that I have to give money back sometimes. The importance of it is that buyers buy from me more easily knowing that a refund is a simple process if they are ever unhappy so they are more willing to commit to a purchase knowing it can be undone. People like to know things can be undone. Even if they never undo it, just knowing the option is out there makes the offer more attractive.

A return policy is about establishing an extra level of trust in the transaction. The message behind your return policy should make the buyer feel confident that their satisfaction is guaranteed and you are willing to back that up with money back or an exchange. Knowing that you are willing to make them happy makes buyers more likely to buy from you. Money back instill more confidence than an exchange and the less restrictions you place on your returns the more your customers will appreciate it. Taylor your policy to what you can reasonably offer and what you think your customers would benefit most from. You can be giving with your terms. Understand that 99% of your customers will never use your policy but that every single customer and prospective customer will appreciate knowing the policy is there, especially if it is particularly good or fair.

Also, in the event that a transaction does go poorly, your return policy is your chance to make it right with the buyer. How you handle problems can win over a buyer who might otherwise hate you.

And be nice! If a buyer anticipates dealing with someone nice if there is a problem, that weighs heavily on their decision to do business with you as well.

So suck it up, bite the bullet and write yourself a return or exchange policy. Make it favor the buyer and keep in nice and accommodating. I think you’ll be surprised at how offering to give people their money back makes them more likely to give you money.

Have you been offering a return policy? What have you found since you instituted it?