Turning Gift Returns and Exchanges into Business Opportunities

December 27, 2023

You hate to see it coming—a customer with your bag in hand. You know where that’s headed. No matter how helpful you were or how great your products are, the holiday season isn’t a holiday without a wave of gift returns and exchanges. While it's easy to view these transactions as inconveniences, savvy businesses recognize the untapped potential these transactions hold. There’s an art to handling gift returns and these strategies will help you transform them into valuable opportunities for building customer loyalty and business growth.

 

 

What Every Business Must Know About Returns

A return is not a personal attack. But it is a way to create an army of loyal customers. While you want to safeguard against fraud and theft returns, taking the pain out of returns may cause people to buy from you in the future. Costco and Nordstrom have loyal followings because of their liberal return policies.

 

Here are a few tips to ensure your policies are just as beguiling.

 

Streamline the Return Process

The first step in mastering gift returns is to ensure that the process is as smooth and hassle-free as possible. Simplify your return policy, clearly communicate it to customers, and invest in user-friendly return systems. An easy return experience fosters customer trust and sets the stage for positive interactions.

 

Convert Returns into Exchanges

Encourage customers to consider exchanges rather than outright returns. Create incentives, such as limited-time discounts or exclusive offers, to motivate customers to explore alternative products. Turning returns into exchanges not only retains revenue but also introduces customers to a broader range of your offerings.

 

Gift Return Specials

Offer exclusive promotions or discounts for customers returning gifts. This not only turns a potentially negative experience into a positive one but also demonstrates your commitment to customer satisfaction. Additionally, you can incentivize them to upgrade to a higher-priced product by offering a discount or bundle deal. This can increase your average order value.

 

Consider bundling returned items with complementary products to create attractive package deals. You can even give the packages funny names for “bad” gift givers to attract attention such as “I told him I hated orange” or “Next year I’m giving him coal.” Use this approach in your in-store signage as well. Levity helps brighten the mood around a return.

 


Leverage Customer Feedback

Use gift returns as an opportunity to gather valuable feedback. Implement surveys (at the register with QR codes) or ask customers for input during the return process. Understanding the reasons behind returns can provide insights into product issues, customer preferences, and areas for improvement, helping you refine your offerings.

 

Create a Seamless Experience Everywhere

Ensure a consistent and seamless experience across all channels, whether customers make returns in-store or online. Integrating your online and offline systems not only improves efficiency but also enhances the overall customer experience. A unified approach strengthens customer relationships and fosters brand loyalty.

 

Additionally, returning things online has a bad reputation. If you can make it easy, people won’t hesitate to buy from you online in the future. Convenience is key to future buys.

 

Personalized Communication

Tailor your communication during the return process. Personalized emails or messages expressing empathy and understanding go a long way in building customer trust. Provide clear instructions on the return/exchange process and keep customers informed about the status of their transactions.

 

Build a Return-Friendly Culture

Cultivate a return-friendly culture within your business. Emphasize the importance of customer satisfaction to your team and empower them to handle returns with a positive mindset. A customer-centric approach builds trust and positions your brand as responsive and reliable. Don’t consider a return a failure but an open door to win them over in the future.

 

Deepen Customer Relationships

Train your staff on the following best practices:

 

  • Go beyond the transaction. Instead of a robotic exchange, actively listen to why they want to return. Is it the wrong size? Not what they expected? This opens the door to personalized recommendations, suggesting other products that better suit their needs.
  • Understand if it was a gift. Before you fall all over yourself apologizing for a lack of quality or whatever the case may be, make sure you understand the nature of why they’re bringing it back. It could be that their significant other bought the wrong size or the cologne smells too much like his mother. Knowing this information can help you make a valuable recommendation, and it also provides an opportunity to build a relationship. We’ve all gotten gifts that just weren’t right for us but that doesn’t mean that everything you sell is that way. Sometimes the recipient just needs a little nudge to finding what they love. If they bought the item themselves and are dissatisfied…
  • Turn complaints into compliments. If a product falls short, don't just refund their money. Offer a discount on a similar item, a gift certificate, or even store credit that incentivizes them to return. This shows you care about their satisfaction and want to keep them as customers.
  • Use returns as market research. Track what items are returned most frequently. Are there quality issues? Is the product description somehow misleading? Identifying common return reasons can help you improve your product line and messaging in the future.
  • Analyze return patterns. Do certain categories see more returns during specific seasons? This data can inform your inventory management and marketing strategies for future holiday seasons.
  • Go the extra mile. Offer to gift wrap exchanged items for free, include a handwritten note of apology or appreciation, or provide a small token of goodwill. These small gestures can transform a frustrated customer into a loyal advocate.
  • Promote "second chance" items. Create a dedicated section for returned items in good condition and offer them at a discounted price. This attracts bargain hunters and clears out inventory.

 

Mastering the art of gift returns is not just about mitigating losses but seizing opportunities to strengthen (or build) customer relationships and drive business growth. By making it a good return experience, you can transform the post-holiday return season into a strategic advantage. Watch as these opportunities unfold into long-term customer loyalty and satisfaction.

This article published by the Leavenworth-Lansing Area Chamber of Commerce with permission from Frank Kenney Chamber Pros Community.


July 25, 2025
People talk about businesses that surprise them in a good way. Loyal customers are like neighbors who recommend a great mechanic. Employees are key to creating those “wow” moments customers share. Make referring you so easy that customers barely have to think about it. A great referral system grows like a garden when you plant the right seeds. 642 words ~ 3.5 min. read The best marketing doesn’t feel like marketing at all. It feels like a friend saying, “You’ve got to try this place.” Think about it. The last time you tried a new mechanic, plumber, or hair stylist, did you pick it because of an ad, or because someone you trust recommended it? That is the power of referrals. In his book *The Referral Engine: Teaching Your Business to Market Itself*, John Jantsch says referrals aren’t random. They happen when you build a business people love to talk about, treat loyal customers like VIPs, and make it easy for them to share your name. And there’s one more piece many businesses overlook—your employees play a huge role in creating experiences worth recommending. Give People a Story Worth Sharing Imagine taking your car to two different repair shops. One fixes the problem and hands you the bill. The other vacuums the interior, leaves a thank-you note on the dashboard, and calls you a week later to make sure everything is running smoothly. Which one are you more likely to recommend to a neighbor? People don’t talk about “fine” or “good.” They talk about moments that feel special. A “referable” business goes beyond getting the job done. It creates small surprises that make customers feel cared for. That might mean following up after a service, adding a handwritten thank-you note to an order, or solving a problem before the customer even asks. Ask yourself this: if a customer told a friend about us, what story would they tell? If you can’t answer that clearly, start there. Treat Loyal Customers Like Friends, Not Transactions Referrals don’t come from strangers. They come from people who feel connected to your business. Think about how you recommend a great mechanic to friends. You do it because you trust them and want your friends to have the same good experience. Your customers feel the same way when they feel valued. Discounts are nice, but loyalty is built on connection. Send thank-you notes. Offer early access to new products. Give your regular customers the first look at something new. These little touches make customers feel like insiders, and people love sharing things that make them feel “in the know.” Empowering Employees to Drive Referrals Employees are the ones delivering most of those referral-worthy moments, which means they need to be motivated to create them. If customers are the voice of your referral engine, employees are the spark that gets it going. Think about inviting friends to your home. You make sure everything looks great because it’s *your* place, and you take pride in it. Employees feel the same way when they feel ownership of the customer experience. Share success stories with your team, ask for their ideas, and celebrate when they create “wow” moments. Recognition matters. People work harder when their effort is noticed. Instead of only rewarding sales, reward the behaviors that lead to referrals. Create a “Wow Moment” board where employees share stories of times they went above and beyond. Give a small prize for the best story each week or month. Make recognition personal too. A quick shout-out in a team meeting or a handwritten thank-you from a manager can motivate more than a generic “good job.” Finally, tie incentives to referrals themselves. Track who customers mention when they leave reviews or refer friends. Reward employees who get named. A monthly prize for “most mentioned in customer referrals” turns great service into a fun challenge. When employees feel proud of the experience they deliver, they create moments customers can’t wait to share. Make Referrals Effortless Even the happiest customers won’t talk about you if it feels like work. Think about how you share a funny video. You click a button, and it’s done. Referring your business should feel just as easy. Give customers simple tools. That might be a shareable link, a short message they can copy and paste, or a quick way to send your information to a friend. If they have to search for your website or figure out what to say, most won’t bother. The Bottom Line Think of referrals like planting a garden. A great experience is the seed. Loyal customers are the water that keeps it growing. Engaged employees are the roots that hold it all together. And making referrals simple is the sunshine that helps it bloom. If you want people to talk about you, give them something worth talking about. Treat customers like friends, empower employees to create moments worth sharing, and make referring you feel as easy as sharing a favorite song. Do that, and you’ll build a business that grows every time someone says, “You’ve got to try this.” --- The Leavenworth-Lansing Area Chamber of Commerce is a private non-profit organization that aims to support the growth and development of local businesses and our regional economy. We strive to create content that not only educates but also fosters a sense of connection and collaboration among our readers. Join us as we explore topics such as economic development, networking opportunities, upcoming events, and success stories from our vibrant community. Our resources provide insights, advice, and news that are relevant to business owners, entrepreneurs, and community members alike. The Chamber has been granted license to publish this content provided by Chamber Today, a service of ChamberThink Strategies LLC.
July 21, 2025
Has this happened to you? Whether online or in-person, there’s a customer who lingers, hesitates. They’re eyeing your item or menu. They’re asking questions about it. You think they’re going to buy and then they walk away or abandon their online cart without making a decision. They don’t say no, they just don’t say yes.  When you see someone who’s interested, but then walks away, it’s likely not your product or service that’s the problem. It’s the fear of a better option. The problem for most people is that there are endless options that are just a click away. Customers are paralyzed by choice. They scroll through product pages, read countless reviews, and compare minor details, all while wondering, “What if there’s something better?” Businesses in every industry (from retail to professional services) are affected by this modern dilemma. The good news? It’s not a lost cause. Helping Them Say Yes You can help your customers move past this hesitation by simplifying the buying process and making it easier to say “yes” with confidence. Here’s how: Clarity The first step is clarity. Too often, businesses overwhelm customers by offering too many choices or using jargon-filled explanations. Customers don’t want to decode your options. They want a clear, obvious path forward. Think of your products or services like traffic signs: simple, direct, and impossible to misunderstand. Package your services into clear tiers, like beginner, advanced, and premium, or create curated product bundles that take the guesswork out of choosing. When customers see fewer, well-explained options, they’re more likely to decide and less likely to second-guess it. Tell Stories Stories also help you cut through decision paralysis. People connect with outcomes, not features. Don’t just list the specifications of your product. Share the success story of a customer who solved a problem with it. Show the transformation, the benefit, the end result. Reviews When people see the positive impact on others, it creates trust and minimizes the fear that they’re making the wrong choice. In fact, according to PowerReviews, 95% of consumers read the customer reviews before making a purchase online. These reviews are pivotal to increasing revenue. Instead of customers feeling like they’re alone in the decision and aren’t sure what to do, reviews have a way of convincing them and they ultimately follow the crowd. Reviews also provide proof that your business delivers results. The Cool Kids If you’ve ever been to a restaurant and chosen the “house favorite,” or you’ve gone to a bookstore and selected the “Editor’s Pick” you’ve experienced the power of social proof. You can use this same tactic in your business by guiding your customers to your most popular offerings. Label your best-sellers or staff favorites clearly. People feel more comfortable making a decision when they know others have done the same and had a good experience. It’s a simple psychological nudge that reassures customers they are making a safe, smart choice because others have before them. Transparency Transparency also builds confidence. One reason customers hesitate is fear of being locked into a bad decision. You can remove this roadblock with easy-to-understand policies like satisfaction guaranteed or flexible return options. When people know they have a way out, they are far more willing to commit. Even if your business doesn’t offer refunds, being upfront about expectations and outcomes creates trust and reduces anxiety around purchasing. Step by Step Another overlooked strategy is to guide customers through the process personally. Especially in service industries, potential clients often don’t take action simply because they don’t know what happens next. Make it crystal clear. Explain the process after purchase step by step. Show them how you’ll take care of them from start to finish. By reducing uncertainty and clarifying next steps, you’ll eliminate much of the hesitation that stalls sales. Urgency Finally, create urgency in a way that feels helpful, not pushy. Limited-time offers, early bird pricing, or exclusive access to new products can nudge customers toward action by showing them there’s value in deciding now, not later. People fear missing out just as much as they fear making the wrong choice. You can use this natural tendency to help customers break free from endless deliberation and feel good about their decision. Simplifying the buying process isn’t about tricking customers into a sale or smooth-talking. It’s about creating a frictionless and clearer path to saying yes. When you make it easy to choose, easy to understand, and easy to feel good after the purchase, you’ll find your customers more willing to buy and happier to return. --------------- Christina Metcalf is a writer and women’s speaker who believes in the power of story. She works with small businesses, chambers of commerce, and business professionals who want to make an impression and grow a loyal customer/member base. She is the author of The Glinda Principle , rediscovering the magic within. _______________________________________ Medium: @christinametcalf Facebook: @tellyourstorygetemtalking Instagram: @christinametcalfauthor LinkedIn: @christinagsmith