Holiday party season is now in full swing, and retailers small and large know what that means: Soon they will see crowds of people heading to their stores not to buy—but rather return and exchange—unwanted holiday gifts.

A recent survey by RetailMeNot.com found that 42 percent of consumers return at least some of their holiday gifts, and an estimated 10-15 percent of holiday sales are returned altogether.

Major retailers’ return policies span the gamut: Some retailers like Costco and Nordstrom’s are known for offering very generous return policies, while others like Best Buy and Barnes & Noble give buyers and gift recipients very short windows of time to return or exchange unwanted gifts. Many major retailers have gotten stricter about their return policies in recent years and even enacted some fees on certain types of returns, according to ConsumerWorld.org.

These three tips can help small store navigate the customer return policy.

Offer generous return policies. As more consumers shop online and deal with increasingly difficult and stingy return policies from major retailers, small businesses that offer more consumer-friendly return policies can have a competitive edge, while generating goodwill among customers. Customer service, after all, is something independents need to do better than big-box retailers. Shoppers “feel the retailer-customer relationship is just that—a genuine, personal relationship—and that a violation of trust via a bad return experience can ruin this relationship forever,” Kit Yarrow, a consumer psychologist, told Time magazine recently. If you sell products online, also consider how you can make those returns more customer-friendly, such as perhaps offering free or low-cost shipping (a la Zappos).

Figure out the right time frame for returns. While it’s good to be generous, you have to weigh that against ensuring your return policy doesn’t hurt your business. You don’t want customers returning purchases a year (or two) later, because you’ll be unlikely to resell it at that point. Consider your product selection and how much time you can feasibly give customers to return those items without taking a major hit. You don’t want to end up like REI, which used to have an ultra-generous return policy. Some customers returned items years or decades after they bought them, according to The Wall Street Journal.

Have a clear and consistent formal return policy. Whatever you do, make sure your return policy is consistent and that customers know it. Nothing can anger a customer more than trying to return something and realizing they can’t. "The customer should know what to expect from us, and know our policy will be the same no matter which store they're shopping in," Dick Visconti, founder of The Papery, a New Jersey-based stationary and gift store chain told Entrepreneur.com. That can mean printing your formal return policy on the back of receipts, on your web site and perhaps even on a sign behind the checkout counter.

Read more articles on holiday shopping.

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