Returns and exchanges are a reality for most retail businesses, but those pesky returns can actually lead to increased customer loyalty and even additional sales. It all depends on our perspective!

According to the US National Retail Federation, returns are at their highest immediately following Christmas, when estimates show customers return nearly 10 percent of their purchases, resulting in around $50 billion worth of merchandise being brought back into stores. #ouch

So how do you win the Retail Returns Game, maximize your sales potential, and still leave the customer with a smile on their face? Here are 7 tips for handling customer returns:

1. Review your current policy on returns/exchanges, and check in with staff to see how this actually plays out on a daily basis.
2. Gracious, guilt-free returns build goodwill. When a customer approaches with a return, smile. A merchandise return is not a failure — it is a chance to serve them even better.
3. Keep it simple. Eliminate paperwork and complicated rules as much as possible to streamline the process.
4. Plan + practice conversion opportunities with your staff. For example, if a customer returns a T-shirt in the wrong size and that design is now sold out, offer a 5% discount on an alternative shirt to encourage an exchange or upsell.
5. Offer an extended returns policy for holidays or gift receipts. Gifts are often purchased well in advance of a holiday or even birthdays; offer extra time (such as 60 days instead of 30 days from purchase date) for returns with a gift receipt.
6. Gather business insights. Ask why the item is being returned, and use what you learn to improve displays, apparel sizing, or merchandise mix.
7. Don’t miss this chance to build or strengthen customer relationships. If the item is a gift, this may be the customer’s first time in your store. Regardless of the reason for the return, thank the customer for giving you the opportunity to provide the right product.

Wow ‘em — and watch ‘em come back again.

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