During a recent company meeting, we asked our Canadian employees about the meaning of Boxing Day, which is always listed on North American calendars as "December 26 - Boxing Day (Canada)." A complete explanation of the holiday can be found online, but our favorite definition came from our Canadian co-founder Brian, who said "Oh, that's the day when we gather all of the holiday gifts we got and we box them up to return them to the stores they came from."

With every joke is a hint of truth as we are, indeed, in the midst of the gift return season. Of course, with the NRF reporting that one in three gift recipients will initiate a return this year, it sounds like a lot of people will find themselves at a store where they might be compelled to bring home another product instead. In fact, a recent study by Visa Canada anticipated close to $2 billion in nationwide Boxing Day sales. So, on one side of the story is the large amount of revenue that seems to be earned through the returns process. But, keep in mind that many returns are fraudulent, and those below-board people will cost retailers approximately $3.5 billion this holiday season.

My friends and family have been raving lately about the great return policies and communication that they have seen from Zappos. I guess it's no surprise that their revenues have tripled in the past two years...quality and service are always great recipes for success. But, I think it's perfectly fair for retailers not to consistently bend over backwards for consumers. I heard a story on the radio the other day about the return policy that SmartBargains offered this year: make your return by January 15th. If you wait longer, they will send your returned product right back to you. If you try to return it a second time, they will keep your product without offering a credit. Sound draconian? It shouldn't...the policy is clearly communicated before the purchase is made...caveat emptor. Many other retailers have tightened-up their return policies to combat the enormous losses that can occur from fraud. The Consumer Reports Shopping Blog has a great posting with a run-down of things consumers should know about returns.

So, what should retailers know? When in doubt, overcommunicate. It's probably not enough to simply post your return policy somewhere on your website. Here's a thought: send a quick post-holiday email to your online shoppers that asks them to forward to their friend a simple satisfaction survey. If they're not satisfied, send them a reminder about your return policy. Sure, you might lose a sale, but you'll win a customer by showing them the quality and service that your brand offers.