The #1 reason in-store-only shoppers refuse to buy online.

The #1 reason* that in-store-only shoppers refuse to buy online is the Returns Process.

If you think that's a powerful statistic, consider this: 89% of customers say they'll shop again at a store after a positive returns experience*.

We recently looked at how shipping policies can be used to improve online sales performance and customer satisfaction in our article 4 Awesome Shipping Tactics. Here we re-visit the randomly selected websites analysed in that article to look at their returns policies.

All policies we reviewed specify that items must be returned in perfect / as new condition, with tags, and in the original packaging; unless mentioned otherwise.

Target customers can return online purchases in-store, or by post, within 28 days of purchase. Returns by post require a returns form to be downloaded, completed and included with the item in a parcel. Target include an eParcel slip with orders which the customer can take to any Australia Post office. It isn't clear, but it appears Target pay the fee associated with returning the item unless they need to send it back again.

HCD Note: Allowing up to 28 days to return an item, and providing an eParcel slip with their orders to allow for easy returns is great, but their returns policy itself still left us puzzled.

Myer recommends customers use the FREE option of in-store returns. If the customer chooses to return the item by post, they must contact Myer for returns details. The customer must cover the cost of postage, and returns must be made within 30 days of purchase.

HCD Note: Myer, did you know the #1 reason in-store-only shoppers refuse to shop online is the returns process? Now you do!. 

The Iconic allows returns within 100 days of purchase, and customers can print off a shipping label for the package. The Iconic pays for the cost of returning the item, plus, customers can choose to receive a refund, an exchange, or 110%(!!!) store credit(!!!).

HCD Note: If you couldn't tell by the (!!!), again we are impressed with The Iconic eStore. Full marks, plus 10 bonus points for a cleverly structured policy page in the form of an FAQ. If this policy doesn't make a customer happy, they never will be.

That Online Shop allow returns within 14 days of purchase. The customer must contact That Online Shop to receive a returns form and instructions.

HCD Note: A stock standard returns policy. We get the no-capitals style the website is going for, but it does make reading the returns policy difficult. Compare this to The Iconic and think which is more likely to capture that 89% of return business following a "positive" returns experience.

PS: Sad to see the shopping cart layout is still broken on That Online Shop. We did contact them last week in case they weren't aware. No thanks was necessary - or forthcoming!

Oxfam Shop clearly states that return postage is free within Australia, and items can be returned 35 days after purchase. There are some items that cannot be returned however, such as food items.

HCD Note: Perfect! Very clear and simply written policy. More than enough time to receive, try and decide to return an item, and free return postage. Items that can't be returned are clearly listed.

The T2 Tea returns policy is a little unclear. The website allows returns to be made within 30 days of purchase, but it is unclear whether the customer can just send the item back, or if they need to contact the website first.

HCD Note: Probably the worst example we reviewed, not only is the returns policy a small paragraph at the bottom of the Terms page, it provides no information other than they will meet their legal obligations. We recommend doing the opposite of this example.

The Results:  The only common trait in the returns policies of the reviewed websites, is that items must be returned in near-new condition, unused and with the original packaging. Beyond that, the policies are very varied. All meet their state and national legal obligations, and it is about 50-50 in regards to whether the store covers the costs of returning the item, or whether the customer does. Even the time period to return an item varies widely between 14 days and 100 days.

HCD Tactics: Be reasonable, and realistic, with the aim of making the majority of returns a positive, hassle-free experience for the customer. Conversion is the main goal, so if your competitors are offering free returns, then you should too, or reduce the costs as much as possible. Make your returns policy clear and concise, and make the returns process as convenient as possible for the customer. Provide a returns label if possible. Lastly, look for ways to eliminate the need for returns through the store-front, by providing more than enough information about the product that the customer will need, such as sizing charts, extra-large images, product reviews and demonstration videos.

For more information about returns policies, we recommend the following reading:

• 4 Things Shoppers Want in an Online Retailer's Return Policy
• Handling online returns: 14 best practice tips
• Multichannel retailers need to work on their returns policies

* Statistics from Entrepreneur's infographic What Consumers Want from Returns and Why it Matters.