Waiting for an exchange to be approved can cause frustration for both customers and merchants. Customers want the product that fits them faster. For customers with their eye on a low inventory item, there's a chance that product may be out of stock by the time their exchange order gets created. For merchants, every out of stock exchange takes some manual work to get resolved, and the process ends with the customer getting a refund instead of a product they'll love.
Instant Exchanges in Loop solves these issues. Customers who choose to get an Instant Exchange will enter their card information, and their exchange order is created immediately. Loop places a hold on the customer's card for $1 or the cost of the new product - depending on your preference - to get the customer's card information. As soon as the product is in transit back to you, Loop removes the hold. Any customers that don't return the exchange product within a window you set will be charged for the new product.
In this article we'll cover:
- Customer Experience
- Setting up Instant Exchanges
The customer experience with Instant Exchanges is the same as a normal return until the final review screen before submitting the return. When the customer has a return with a variant exchange, Advanced Exchange, or Shop Now outcome they'll be given the choice of an Instant Exchange or processing their exchange after they return their product.
If the customer chooses Instant Exchange, they'll be prompted to add their credit card info. Loop will create a hold on their card for $1 or the total amount of the exchange item(s) as set by you. The hold will stay in place for 7 days and then drop, regardless of whether the product is returned or not. If the return item has not been marked as "in-transit" within the return window you set, Loop will charge the card the full cost.
Loop includes a tooltip here to make it clear that they will only be charged if their original product is not en route to you within your set time frame. The return confirmation page will also reflect the hold.
Customers that do not want the hold on their card or are not interested in an Instant Exchange can choose to do a regular exchange without adding card information. Customers doing a regular exchange that includes Shop Now and an upsell amount will still need their card to pay the difference.
Setting up Instant Exchanges
Setting up Instant Exchanges is simple.
- If it hasn't already been connected, connect Stripe to your Loop instance in the Shop Now tab. Merchants already using Shop Now and capturing upsell should already have Stripe connected.
- In Settings > Return Policies, click Edit on any policy you would like to activate Instant Exchanges for. Under the Exchange outcome, check the box to Allow instant exchanges, and customers will be given the option to get an Instant Exchange.
- If you are a merchant that is using Shop Now, but not using variant exchanges (i.e. the Exchange outcome is turned off entirely) you can still leverage Instant Exchanges on Shop Now outcomes. Just turn on Exchanges, check the Allow instant exchanges box, then turn the Exchange outcome off again. Hit save, and Shop Now customers should now be seeing Instant Exchanges.
Once turned on, you have a few choices to change how Instant Exchanges will work:
- How much Loop will hold upon placing the Instant Exchange.
- $1 authorization allows Loop to collect the credit card information needed to charge the customer if necessary, without putting a big hold on the customer's card for 7 days.
- Full return value authorization will place a hold on the customer's card for the full amount of the return product. Since a hold will fail if the card doesn't have enough funds, this can prevent Instant Exchanges using cards that may not have the funds necessary to cover the cost of the product.
- Time to return before charging.
- Merchants can use this setting to extend the time period customers have to return their products before the card gets charged from the default 14 days. The time to return must be between 14 and 28 days.
While Instant Exchanges should work automatically without merchant intervention in most cases, please note that merchants do have the option to:
- Charge the customer manually if a product came back in non-restockable condition.
- Retry a failed payment.
- Manually refund the customer is the product is returned after the return window.
- Release the hold manually.
How much is the hold placed on the customer's card? The hold is in the amount of the of the exchange item. If there is upsell involved in the transaction, any upsell is charged immediately.
We don't use tracked labels or labels generated by Loop - can we still use Instant Exchange? While it is technically possible, it requires more work to manage manually and is not a recommended configuration.
Does this impact the return window? No. Your return window will stay the same. Instant Exchanges does cut down on the standard amount of time customers have to send their original product back.
Is there a Stripe fee for these holds? No. Stripe will only charge payment processing fees if the customer is actually charged.
Does this feature completely resolve out of stock exchanges? No. Since customers are given the choice of whether or not to request an Instant Exchange, there may be some customers that continue to go the regular exchange route, which could result in OOS exchanges. We do anticipate that Instant Exchanges will further decrease the frequency of these events.