What are exchanges in retail?
Exchange is the situation in which the customers give back their previously purchased items and take other identical or different ones. For retailers, the exchange policy can be considered a fundamental part of the sales process.
Benefits of exchange policies
Create a win-win situation for both parties.
In most cases, customers wish to fulfill their need for certain products rather than being refunded. And certainly, they may never be satisfied with returning purchased items. On the other hand, retail stores are also prone to various possible pitfalls when receiving back those items.
Exchange policies allow customers to choose more suitable items instead. At the same time, retailers can reduce the risk of being profited from refunds.
Minimize transportation costs
Exchange policies also benefit the online retail process in terms of transportation costs. Instead of collecting returned merchandise back to stores, retailers can simultaneously pick up the previous and deliver the new. It can easily be calculated that exchange policies can reduce the delivery costs up to 50% in comparison with return and refund policies.
Build on customer trust
A strong exchange policy ensures customers that they are able to exchange the product in case of unsatisfactory items for more appropriate ones. When being put at ease, customers will not hesitate to make purchases since they will always be served in any unexpected cases. In short, these policies support retailers to build customer trust and increase their loyalty, which considerably benefits their business.
Despite the above-mentioned benefits, an exchange also contains some drawbacks for businesses. One of the most foreseeable disadvantages of exchange is that the purchased product may be not as well-qualified as before, because customers may have accidentally done something to the product. If retailers cannot solve that problem properly, they may receive a revenue loss.