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The Restocking Fee:Reasonable & Clearly Defined

The Ruby Lane Return Policy is one of the key features of the Ruby Lane Advantage to shoppers of purchasing from our shops. We encourage shops to recognize this and, for those which do not choose to waive a Restocking Fee for items returned within the terms of the policy, then we urge them to make their Restocking Fee fee both reasonable and clearly defined.

When a shop's Restocking Fee is only vaguely defined in a shop's Terms of Sale, such as by reference to 'other costs associated with a returned item including shipping and PayPal fees', or the percentage Restocking Fee is such as might be perceived by a shopper as more closely representing a Partial Buy-Back policy, then the costs or uncertainties of returning an item can present an unattractive proposition to a potential customer.

The purpose of a Restocking Fee is to defray actual costs incurred by the shop in receiving and processing the item back into inventory, not to act as a deterrent to shoppers returning items. Therefore it follows that setting a Restocking Fee at a percentage which more accurately represents a penalty is not only contrary to the true spirit of the Ruby Lane Return Policy, it is almost always counter-productive for a healthy business, since many shoppers will avoid a shop if they feel the Restocking Fee, should they need to return an item, would be too punitive. Similarly, a potential customer can be discouraged from a purchase if it is unclear what their exact liability will be in the event they wish to make a return.

A Restocking Fee should not be calculated at a rate to secure a profit on the transaction come what may. The maximum Restocking Fee permitted on Ruby Lane is 20% but most shops recognize that an occasional item returned for refund is part of doing business. For this reason, many choose not to charge any Restocking Fee at all. But if your intention is only to recover handling or packaging costs, these should be factored into the Restocking Fee calculated percentage. Do keep in mind that even a Restocking Fee of 2% or 5% may be adequate for this purpose.

Remember also that return shipping costs are the shopper's responsibility, under the terms of the Return Policy, which also lays out a clear time schedule for the process. Refunds for PayPal payments should also be cost-free for both shop and customer since, within PayPal's process, a refund via the original payment will ensure return pro rate of any original PayPal fees.

A request to return a purchase for refund can be disappointing. We understand. Just as a purchase might not always meet a shopper's expectations, by failing to consider their time and expense in processing an item back into inventory it might be felt that a customer is not meeting the shop owner's own expectations. We also do appreciate that some shops may operate on small margins and might need to recover any actual costs involved in accepting a returned item. But the site-wide Return Policy encourages shopper confidence, which benefits all shops on Ruby Lane, and we know, because they tell us, that our shops value the Ruby Lane ethos. To this end, we urge all shops to demonstrate, by a clear and fair Restocking Fee, that they embrace the full spirit of the Return Policy.

We refer shops to the Extra!Extra! post, dated September 02, 2009, in the Forums Bulletin Board. Further information on the Restocking Fee can also be found in the FAQ Knowledge Base, located from the link at the base of any page of the site.