How Top Sellers Handle eCommerce Payments, Returns & Refunds

Published – May 25th 2018

In your career as an online seller, you will have lots of money coming in and out of your business. Hopefully more from the former. These incomes and outgoings consist of general turnover as well as refunds and returns.

In this post, I will focus on how all this relates to eBay selling. Although, the brunt of it will relate to the majority of selling platforms.

It can sometimes feel difficult to keep a handle on all of these transactions. As an online seller I can relate to this all too well.

No seller ever wants to fathom the idea that a buyer might want to return an item or receive a refund. It certainly runs a chill down the old spine for me.

We all try to prevent this from ever happening. The bad news is that sometimes it will happen no matter how good you are. It may well be someone else’s mistake (postal companies) rather than yours.

Guess what? All that hard work means nothing if the buyer isn’t happy with the item. There may be any number of reasons why the buyer isn’t happy with the service.

For this reason, it’s very important that you prepare yourself for the worst case scenario just in case. I don’t know about you, but I like to plan ahead rather than make a mistake and learn the hard way.

Covering every eventuality means that you will be organised. You can deal with it when the time comes without losing your cool.

Returns happen over 3 times more often in eCommerce than they do with offline shopping. This shocked and surprised me when I first heard about this as I’m sure it will you.

It may have something to do with the unpredictability of the delivery process. Alternatively, it could be the way buyers treat online retailers. This is different in many ways when opposed to regular bricks-and-mortar stores.

In any case, this is why it is vitally important that you learn exactly what to do for this situation. This is especially relevant as an online merchant.

Which payment methods should I offer? There are also plenty of varying payment methods to think about with positives and negatives for all.

One buyer might prefer to pay one way. Conversely, another customer will be adamant about a completely different payment method. Cover all bases by offering your buyers as many choices as you can. You need to cater to all needs.

It’s very important to keep track of all of this. Lend me your attention and allow me to give you some guidance.

Which eCommerce payment methods can I offer?

You will be able to configure which payment methods you will accept for the product you’re selling. How many payment methods should I offer? Clearly, it’s better to give the buyers lots of options to pay with. This will boost your eCommerce sales for people with different needs.

For instance, If you don’t accept PayPal payments then it will have an adverse effect. All the buyers that can only pay with PayPal will slip through your fingers.

Let’s take a look at how different people like to pay. You can offer all sorts of payment methods including:

check (or Cheque)
PayPal
direct debit
wire transfer
credit card
Google wallet
postal order
Escrow
Payoneer
money order
cash (payment on collection)
Payza
debit card
bank transfer
Dwolla
invoice
Skrill
a jolly smile
everlasting hope in the peaceful future machinations of humanity
a pat on the head
your Grandmother’s prized, hand-crafted garden gnome

Of course I’m kidding about those final four items. Scratch those! … Oh what’s that, you wanted the gnome? Well tough! Time to be sensible now. These options have varying fees so you will need to check them individually for more details. Pick the best one based on you current circumstances.

What are the pros and cons of these payment methods?

Cash in hand payment is always controversial as it doesn’t really offer seller or buyer protection. It’s almost impossible to trace the transaction.

However, you do get the money in your pocket right away. I personally like this as there is the instant gratification to consider. You also have to be weary of receiving counterfeit money from buyers.

PayPal is widely used for good reason in eCommerce as it is safe, convenient and secure. In my time as a seller, I’ve never had any problems with their service.

Make sure to make it available with your listings as excluding it will purge a lot of business. eBay used to own PayPal and even today the two are both closely connected.

How do I accept payment?

If you don’t have a vessel to receive payment then where is the buyer going to send it to? Make sure that you have some kind of bank account set up before registering as a seller. Clearly, buyers will need to know where to send profits and take fees from before you can even commence trading.

You should request immediate payment after ordering where possible. Allow the payment time to clear so that you can combat dodgy buyers.

There a lot of “buyers” out there who just want to mess you around and waste your time. If the buyer is very resistant to paying up (which I have experienced) then you can count that as a glaring red flag.

If the buyer is putting pressure on you to send the item while you’re still waiting for the money to clear then that’s another bad omen. They may use an excuse like they need it urgently or something like that.

If they receive the item before it has cleared then it won’t be that hard for them to reverse the payment, leaving you with nothing.

Like I say, always make sure that you receive payment before you dispatch the sold item. Let me reiterate that If you don’t do this then some buyers will take advantage of the situation. Ultimately, they may choose not to pay you at all. This applies to whichever payment type that you choose to accept.

How do I go about processing eCommerce refunds?

Try to refund the buyer as quickly as possible by the same method that they originally paid with. Find out the exact nature of the problem to check that you are dealing with a genuine issue.

Some buyers are capable of trying any scheme to fool you. If it sounds odd or suspicious then you can always dispute this if you are confident.

You shouldn’t put up a fight with the buyer for a refund or return if you know that they are in the right. Look at it objectively and try to be as fair as possible. It will negatively affect your brand if you cause an unnecessary struggle.

[bctt tweet=”Keep your returns rate low as this factors into your performance review on eBay. If it’s too high then you may be punished.” via=”no”]

What sort of eCommerce returns policy should I offer?

It’s professional and fair to offer at least some kind of bare bones returns policy. A generous returns system with a high number of days is great for buyers and sellers. It will rank a lot higher in eBay searches (as well as any other search engine) than a listing with a bare minimum or no returns policy.

Having a lengthy returns policy gives people confidence that you’re a good guy or gal. They will get the impression that you will put the buyer’s best interests before anything else. You’ve got their back if anything goes wrong.

How long should item returns take?

It is courteous to give your buyers at least 14 days to return an item if they aren’t happy with it for any reason. Although, many merchants on eBay (myself included) act more leniently by upping it to 30 days.

If a returns case arises then try to limit the completion of returns at no more than 5 working days on your end.

The buyer has to play their part by returning the item. For this reason, I can understand how the amount of time accumulated might be somewhat out of your control. Don’t panic in this situation. The buyer can’t shift the blame on to you if they take too long returning an item.

Are all eCommerce returns worth doing?

It may not be worth processing returns if it will force you to incur another loss from the return delivery cost. I sometimes find myself in this predicament. It all depends on who pays for the return delivery (which is usually the seller).

You may find it easier to knock the whole thing on the head. Let them keep the item and just pay back the money you owe to them.

You may as well instruct the buyer not to bother returning the item if you’re bleeding money anyway. If the item is broken or faulty then you may see no point in wanting it back in any case.

Why are returns policies important?

Buyers can rest assured and breathe a sigh of relief when they see that a seller has a clear and fair returns system. It’s like a comfort blanket for them and it enforces trust. This means that you should receive more eCommerce business if you allow returns.

If you don’t have a returns policy then it raises questions among buyers. These can include why that is and if there is something wrong with your eCommerce inventory. You don’t want buyers to see you as the boogeyman.

Depending on your country or website you operate on, there may also be rules in place that force you to offer some kind of returns or refunds system.

[bctt tweet=”There are some “buyers” who want to waste your time. If a buyer is resistant to paying up then that’s a red flag.” via=”no”]

Can returns hurt my eCommerce reputation?

Returns always should be a last resort. Do your best to avoid it happening in the first place where possible. Keep your returns rate down as this also factors into your performance reviews on eBay.

If your unsuccessful orders involving returns or refunds are too high per month then eBay may punish you. In fact, any order with an unsatisfactory buyer resolution can harm your eBay seller reputation.

I can back this up as an eBay seller. Punishments I’ve received include limits on selling allowances. Other penalties include account suspension or closure.

Are there any eCommerce payment scams to look out for?

Those damn scams again, huh? Scam artists try their game in almost every industry. eCommerce is no different and it is especially prevalent on Amazon or eBay.

When should I give a refund or return? Your buyers and mine will be very nice, pleasant people for the most part. However, there is always the classic “item not arrived” lie to look out for. This in particular can be a genuine grievance for the most part, but not always.

It doesn’t end there, another common buyer scam is to ask for a phony return. The buyer will then send back an item which isn’t the one you originally sent them.

It will normally be something similar but of very poor quality or even faulty. They will then keep the original product and try to get their money back from you.

This specific scam might seem pathetically feeble. Although, eBay can easily wave your case away if you don’t give them solid evidence.

It stands as an additional reason why photos are so vitally important. It means that you can prove with pictures that the two items aren’t the same when you go through the dispute process. You will be taking photos for your eBay listings anyway. Take a lot of them and make sure that they cover great detail.

You should now be more confident in dealing with most kinds of customer problems. Additionally. you should be more knowledgeable about the eCommerce payments going to and from you.

We can learn that there are lots of payment methods that work well for different scenarios and buyers. Make yourself familiar with the main ones so that you understand how they all work.

Also, we know that some customer complaints ending in a refund or return are genuine. On the other hand, others are far from it. I’ve found that you can teach yourself to recognize the distinction as you gain experience as a seller.

I am now going to list a bunch of tasks that I recommend you do next. Write these down on a to-do list so that you can strike them off when complete:

Add as many different payment methods as you can to your new and existing eCommerce listings. You may even see a spike in your sales.
If you don’t already have one, then add a returns policy for your products. You can increase the amount of days in your policy if you already do offer returns.
Educate yourself about various payment scams. You can make your listings watertight so that they will be less vulnerable to these scams.

Now that we’re nearing the end, you can take the next step and progress towards ensuring you know about The Most Useful eBay Upgrades With Fees + eBay Store Guide.

Do you process a lot of refunds and returns? How do you deal with them? Do you have a favorite payment method as a seller? If so, what is it? Please don’t forget to share this with your friends and comment below. Thanks for reading!

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