Refund and Return Policy
For any commercial enterprise, where goods and services are purchased, there must be a return/refund policy. Such a policy acts as a mode of redressal for the customer, in case they are unsatisfied with the product/service or simply change their minds.
The policy is in the nature of a return, where a product is merely returned back to the seller and the money is returned as a refund. It differs from a cancellation policy as a cancellation policy applies only before a product/service is delivered. Refund and return policy applies after a product/service has been delivered.
Why is Refund and Return Policy important?
- It acts as an agreement between the buyer and seller.
- It lays down the terms and conditions of the sale.
- It acts as a redressal for the customer in case the product is unsatisfactory.
- It is also beneficial for the seller as it acts as a safeguard against action from a dissatisfied buyer.
For the policy to be enforceable it must be clearly stated. The buyer must be aware that any purchase is subject to this policy. It is recommended to state the words “terms and conditions apply” should appear on the invoice.
Absence of such a policy would mean a buyer is free to take any action under the Consumer Protection Act against the seller. The policy acts as a preliminary buffer against such action. If a return and refund policy is not well drafted, then the customer always has a recourse under the Consumer Protection Act.
Drafting the policy
Now that the importance of having a return and refund policy has been established, here are some important points regarding drafting.
- The language should be simple and avoid legal jargon. It is for the buyers benefit and should be clear and simple.
- A time frame should be stipulated for all returns. The standard time frame is 15-30 days. Without a time frame, buyers can return their products whenever they wish to.
- Choosing the mode of refund- through returning cash or through store credits. Store credits are more useful especially for ecommerce enterprises. Store credit is like a coupon that can be redeemed only by the seller. This ensures that customers return to the same seller for their new product.
- State whether any fees are chargeable for returns. Often, a seller may choose not to return the tax on the products or the delivery charges. These should be clearly stated.
- Make the policy visible, especially if it’s on an ecommerce website.
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