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A Deep Dive Into the Return and Exchange Policy in the Philippines

Managing an eCommerce business isn’t always easy. Besides ensuring operations run smoothly, there’s also that evident limitation on your buyer’s side—they can’t physically see nor feel the items they intend to buy.


Inevitably, the products that the consumers receive may not be up to par with their expectations. When this happens, they may want to return the item or exchange it for something else. Here’s where a return and exchange policy is beneficial, providing businesses and customers a safety net for their transactions if things don’t turn out as expected.


This article will give you a clearer understanding of return and exchange policies in the Philippines, address questions you may have, and provide tips on how to have an effective policy for your business.

Understanding the Return and Exchange Policy

Return and exchange policies in the Philippines are part of the Republic Act No. 7394 or the Consumer Act of the Philippines. Simply put, the law states that consumers have the right to be compensated for receiving products that are either defective or not as advertised. They may either return the item, request a replacement, or ask for a refund or repair.


A return and exchange policy is required by law. But more than that, a study found that a lenient return policy may boost sales more than increase the number of returns. It concludes that consumers may feel more comfortable buying a product they can return than one they never can.

General FAQs on the Return and Exchange Policy 

Return and exchange policies can get complicated, especially for new businesses. Here are some answers to commonly asked questions to help you learn more about this subject.


1. Do I need to have a return and exchange policy?

Yes. Not only is it a mandate by the law, but it can also improve your relationship with your customers. According to Doddle, 84% of customers said that the returns experience contributes to their brand opinion. 


2. When is a buyer entitled to an exchange, repair, or refund?

According to the law, only items with hidden flaws are allowed to be returned. That means you can reject a return request if the customer had a change of heart on their purchase or if they damaged or tampered with the product after the transaction. 


Additionally, customers are entitled to return or exchange an item if they have an official purchase receipt or proof that it was defective before taking the product home. 


3. Which products are under warranty?

All products have an implied warranty unless explicitly stated otherwise. Implied warranties can last anywhere from 60 days to an entire year. However, if you want to shorten your brand’s warranty period, you’ll need to express it clearly to your customers, including what they can do to avail of the warranty and what your business can do in return. 


4. Do I still need to comply even if my shop is online?

Yes. According to Republic Act No. 8792, also known as the Electronic Commerce Act of 2000, the penalties for not following the Consumer Act also extend to online stores.


5. What are the penalties for violating the Consumer Act?

According to Article 73 of the Consumer Act, the possible penalty for violating warranty laws can range from ₱500 to ₱5,000, three months to two years in prison, or both depending on the court’s discretion. A second violation may lead to a similar penalty or revocation of your business permit and license.


6. Where do I display the policy?

It’s best to display it as prominently as possible to avoid disputes and misunderstandings with your customer. You can add a link to it in various places on your website, such as on each product page, the checkout page, and your site’s footer. 


Your return and exchange policy has a powerful effect on your brand and customer experience, so effectively implementing it is necessary.

Tips for an Effective Return and Exchange

The core of a strong return and exchange policy is its customer-centric features. Follow the tips below to help ensure a seamless return and exchange policy your customers will love.


1. Keep the policy clear and simple

Return and exchange management is already hard, so there’s no need to overcomplicate the policy for you or your customers. According to an industry report by Incisiv, 95% of consumers won’t shop at brands with bad returns experiences, meaning a straightforward and accommodating process is crucial.


2. Manage your customer’s expectations

Be sure to outline the type of compensation customers can potentially receive, whether it be in-store credit, an exchange, or a full refund. You can also use visual merchandising strategies to better set your customers’ expectations about the product.


3. Inform and train your staff

Returns and exchanges aren’t always bad for business. If a customer returns an item, it becomes an opportunity for you to cross-sell other items you have in stock. Train your staff to actively listen to what your customer needs so that your team can recommend similar or better products to sell.


4. Explain your return and exchange process

Guide your customers through the return and exchange process to avoid stressful misunderstandings. For instance, if they ordered online, specify if they need to deliver the item back to you or if you’ll set up a courier to pick it up instead. If a client intends to exchange the item, note the similar items they’re allowed to choose from.


5. Take the opportunity to gather customer insights

If a customer returns a product, it could mean that there are still things in your business you need to improve on. Take this chance to gather customer feedback. Ask them why they’ve decided to return their purchase and see what you can do better for future transactions.

Giving Back to Your Customers 

Return and exchange policies protect consumers from buying shoddy products, but that doesn’t mean you can’t take advantage of the situation. A clear and effective return and exchange policy can help you build customer relationships and gain valuable insights to improve your brand.


The return and exchange process can be stressful, especially if you manage other eCommerce operations. If you need assistance with your returns and exchanges management, consider partnering with etaily, an eCommerce enabler that helps seamlessly e-tail your business from start to finish.


Work with eCommerce experts today and contact etaily today to learn more.