Does it really matter to set 301 redirect for not found error pages?

[CommercePundit]

I've very simple question for not found error pages. Does it really require to set up 301 redirect for all not found error pages which detected in Google webmaster tools? Honestly, I don't want to set 301 redirect exclude externally connected pages. So, what will impact on ranking after follow this process?

[alsvik]

If you just allow the link to go 404, google will notice that you have a fault on your site - and no juice will be passed from the linking part. If Google is the one ranking your page, sending you customers and perhaps (as in our case) gives you 30% of your customers online -Then you dont want them to see any faults on your site!

If you 301, juice will be passed and you have the chance to present interesting stuff for the users (potential customers) that have clicked the link ...

Good links are hard to get, so you should nurture them. Make sure they reach a related page/product - add a 301-text message serverside, telling the potential customer that this merchandise is out of stock, not produced anymore or whatever reason. Depending on your company-type, make it personal: "Hi. Sorry we're aout of stock on this product. Sorry. Regards Tina, Salesmanager (add image)"

Google gave you GWT for a reason. Make sure you weekly take care of faults listed in there, and take them serious. Dont bite the hand that feeds you ;o)

I dont know the structure of your site, but we did some serverside-301-automatics, redirecting old product-pages to nearest avaiable product:

/travel/spain/mallorca/alcudia/non-existing-hotel -->

/travel/spain/mallorca/alcudia

On single info-pages we found relevant pages. All redirects came with a 301-message displayed on page, telling customers why we send them somewhere else.

[polarking]

I would 301 the ones from links high ranking domains. We had some links that had a session variable that needed redirected. If you do not want to redirect a lot of links you can always do something clever with your 404 page. If the 404 has call to action on it you should be fine.

[InkCartridgesFast]

The main reason for 301s is so you dont lose traffic as SERPS sometimes dont update for a while. It carrys your Link Juice to the URL you re-direct it to which can improve your SERPS so you don't have to start your SEO from scratch. So it is quite important if you've done backlinking etc, if it's just a basic page I would still 301 it to keep Google happy.

I'm no expert, i'm sure someone will give you a more detailed answer.