How to offer a refund policy that makes your customer smile

refund policy

Most larger retailers face in excess of 30% in returns in 2018, especially now that processes have been made even easier for customers and the cost of returns have vanished according to Steve Denis in Forbes magazine. So, it’s understandable that our small business customers expect the same rights.

And of course they should!

But how do we as self-employed artists, working from our spare room create a refund policy that works for both our financial interests and our customer’s growing expectation? Today we are going to look at just that!

Do I need a refund policy?

In short yes.

Here in the UK we are governed by two laws that dictate how we handle returns both in; in person selling and online and distance selling, but the policies that we are asked to give in both cases are essentially to offer an open 14 day return policy unless certain circumstances are given. The UK government state them as;

You don’t have to refund a customer if they:

  • knew an item was faulty when they bought it

  • damaged an item by trying to repair it themselves or getting someone else to do it (though they may still have the right to a repair, replacement or partial refund)

  • no longer want an item (e.g. because it’s the wrong size or colour) unless they bought it without seeing it

You have to offer a refund for certain items only if they’re faulty, such as:

  • personalised items and custom-made items, e.g. curtains

  • perishable items, e.g. frozen food or flowers

  • newspapers and magazines

  • unwrapped CDs, DVDs and computer software

You will ultimately be governed by the laws of the country from which your business is based. So my advice is to check with your version of the Trading Standards body (usually a government department) and they will be able to give you the finer details you need to be aware of.

I have to be very clear here that in writing this post that I must acknowledge that I am not a trained lawyer, so if you are in dispute, or are concerned about your return policy then seek advice from the relevant governing body.

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What makes a great return policy and a happy customer?

I think a combination of transparency and honesty is always best practice when you are dealing with customers who want to return something, but the difference between a simple policy that covers the basics and a great policy is in the detail and ultimately the outcome for the customer. Here are my top tips on what to include for a great return policy;

  1. Offer exchanges first – To lessen the cost of returns and of course increase customer satisfaction offer a fair exchange policy.

  2. Be clear on how you handle returns and what is expected of the customer.

  3. Time limit – Give a clear time frame in which you accept returns. I personally used to have a 30 day policy for my craft business, but you can work to the limit of the law if that suits you better.

  4. Extend returns for Christmas period – I personally didn’t do this because I had an extended time frame of 30 days anyway, but this is a great gesture to your customers during a hectic holiday period. Going that extra mile really shows you care.

  5. Receipt requirements – Depending on how you sold items your customer they may not be able to produce a receipt for the sale. So make sure that you get as much of a record of the sale from them as you need; either an online order number (especially if you sell on Etsy and your own website), or a show… This will help you find the relevant stock record.

  6. Product return requirements – I personally put a clause in my craft business return policy that stated, ‘I accept returns only if in resaleable condition and in original packaging.’ This made the financial lose of a return an opportunity to resell. Depending on your product you may have other more specific requirements.

  7. Return shipping payment terms – Customers want to know who pays for shipping. As far as I can tell here in the UK it is not a lawful requirement that the seller pays for this, but depending on your situation you may wish to fall in line with larger retail stores and offer a free service. I think in most cases customers of smaller craft businesses do expect to pay for return shipping of the original item if it is not faulty, as long as they don’t have to pay for the shipping of an outward exchange. If you have a faulty situation, then your customer will not wish to be further out of pocket. Here of course you could ask for photos of the fault and simple refund on receipt of that information lessening your costs and their wait time.

  8. Give return address details – Somewhere on your Etsy shop or website you should already have a business address listed under distance selling laws, but it doesn’t hurt to state this again in your return policy.

  9. Listed exceptions – Having done some research you will know by law what you should and shouldn’t be accepting back. Make sure you relay this clearly to your customers.

  10. Give your customers the benefit of the doubt – Customer’s aren’t always returning something they’ve used, or just because they want to get something else out of you. Give them the benefit of the doubt that their request for a return is genuine.

  11. Don’t be too strict – Clear policies are different from strict policies. Try not to make life seemingly difficult for your customers, or you will lose them.

  12. Make returns a positive experience for customers – Keep your customers in the loop as you process the return and at all stages make sure to keep your conversation polite and positive. If your customers feel like they are getting good service they are more likely not only to return to you, but in time to invite their friends to shop with you too!

  13. Make sure you have a protocol for procedure if you do receive returns – Being able to step into action when a customer needs your help is not only professional but keeps faith. Work out beforehand how you are going to deal with returns in your business and when they do occasionally happen. Your customers will feel happy knowing you have got them covered.

  14. Make your processing time swift – I hate sites that tell me they will take 30 days to process my return. Don’t do it, you have no need too! Instead process them as they happen. Quick and professional service is endearing.

  15. Post your policy in the right places – there are certain places on your site that you need to have your return policy displayed. Make sure these are easy to find for your customers, should they need to use them.

If all of this feels too much, too overwhelming to contemplate, then I have to tell you that you do need to tackle this, because at some point someone will want to return something. If you want to decrease the amount of return requests, you get then check out my podcast about ‘How to sell on Etsy with an awesome product listing’ as this works for Etsy shops and business websites and the methods discussed will increase the likelihood that your customers feel they have received what they ordered.


Where should I put my return policy on my website?

Usually return policies sit on their own web page, or as part of a wider terms and conditions page. You can include quick fire answers on a FAQ page and this is what I will be talking about in tomorrow’s blog post.

If you have an Etsy shop, then there are designated spots for your to include this information. You can add your return policy under your policies page and FAQs page.



Returns are inevitable in all businesses and being prepared for them can actually increase your customer retention, because you are eliminating bad-feeling. New customers may even buy based on the strength of your store policies!

Take action today and create a return policy that makes your customers smile if ever they have to use it.




Do you have a return policy? If so what do you think is important to include?

Thank you for watching! I hope that was helpful, or at least thought provoking?

If you have any questions or comments, please pop them in the comment section below.