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Dropshipping Returns 101: Everything you Need to Know

Profile picture of Lilla Stefanovszky
Lilla Stefanovszky
27th May, 2021
13 minutes

As an eCommerce store owner, you would never want to hear that a customer wants to return their purchase. Dropshipping returns can be your worst nightmare and make you feel that the customer did not have a good experience with your product or service. But not to worry, you can still make a good impression when handling the return and potentially earn a returning customer to your store. As the business owner who is representing the store, it is always important to keep things professional. Have a positive mindset every time you have to deal with a dropshipping return and provide the best service possible to your customer. This way you can not only turn your upset customer into a life-long one but can also avoid negative feedback and comments on your social media channels. You would want positive feedbacks as your social media is one of the key building blocks for your marketing strategy.

Returns and refunds are an essential part of each business regardless if it is a dropshipping or brick-and-mortar store. Handling these issues is not easy especially if you are a dropshipper, this is why we created this guide to help you. This article will guide you through the key points of how to handle returns when dropshipping and create a clear dropshipping return policy.

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Prepare in advance for returns

Even before you start selling and activating your online shop, it is important to think about all scenarios that can come across you while doing business. When choosing a supplier always pay attention and understand their return policy well. This is extremely important when you are in the dropshipping business as you do not want goods coming back to you and hurt your profit margin.

Know your suppliers return policy

If you are working with several suppliers be sure that you know the return policies of each properly. Every supplier works differently so it is your responsibility to keep up to date at all times. When working as a dropshipper, your supplier will send the products directly to your customers, so their policies will have a direct effect on yours as well.

Here is everything you need to know about your suppliers’ return policy:

  • Check if they have a restocking fee and how much that is exactly;
  • How long do they accept a return after your customer received their order;
  • In what cases your customer has to cover the shipping fee of the returned item;
  • Make sure you know if they accept returns on non-defective orders that have been placed by mistake;
  • Know step by step how they handle the entire return process and how much time it takes.

Be sure that you are aware of all the abovementioned points when selecting or doing business with your suppliers.

Creating your own dropshipping return policy that matches your suppliers’

You have to set clear expectations for each customer that lands on your store’s page. You can do this by having a clear and easy to understanding return policy. This is not only important to avoid misunderstandings in the future, but also to positively affect your customers’ purchasing decisions. No one would want to buy from a shop where the options and methods of return and refund are not laid out properly. Moreover, a study found that 68% of all consumers are reviewing the return policy before even making a purchase. This is exactly the reason for having an easy-to-understand and easily finable return policy on your eCommerce store’s page. Now let’s look at the points you surely would want to include in your return policy.

When creating your return policy, be sure to talk about:

  • If any of the items you are selling are exempt from the return policy;
  • How much the return costs if there is an associated cost for your customer;
  • If you can send a replacement instead of a refund;
  • How long will it take for your to issue the refund to you;
  • From which countries your customers can return their products.

The length of the return window

It is always important to leave room for error from your customers’ side. So, never give exactly the same return window that your supplier accepts. Always calculate with a couple of days less than what your supplier in case your customer forgets to post the package or there is a delivery delay. For example, if your dropshipping supplier’s return policy is 14 days, you can play safe and set yours to 10 days in order to make sure that your customers will return the package in time.

If you work with multiple suppliers that have different return windows, make sure you calculate with the shortest one in your policy. This way you can make sure that your dropshipping returns always get back to your supplier in time and you do not have to pay for unsold products.

Tracking the returns

If you decide to receive returns yourself before seeing them to your supplier either provide your customers with a waybill for the return or only accept returns with tracked courier services. This will ensure that your customers can not just claim that they have posted the package that then got “lost” in the mail. Also, this way you can easily follow the route of your return. If you ask your customer to send the product back directly to your supplier, make sure to follow up with both parties on a regular basis. This will help you to be on top of your return process at all times.

The return address for dropshipping returns

You should never provide a return address on your website straight away. If you are working with several suppliers you can not give a different address for each product, that would only confuse your customers. Also, you would want your customers to talk to you first before returning an item. This can be at your service for both mitigating and solving the issue in a professional manner and also to monitor your suppliers’ quality.

Have a FAQs page

Having a FAQs page is important for many reasons. One of them is to clarify any additional questions that your return policy is not stating or directing your customers to your return policy page. Here you can provide more in-depth information for your customers and further explain your return process and conditions that will be in line with the ones of your supplier.

Going through the dropshipping return process

Now that you have a great return policy in place, all should be clear to your customers when it comes to returns. Let’s see how you should handle the dropshipping return process as it is not as straightforward as if you would be holding your own stock at your warehouse. Firstly, you need to know the most common return reasons and then we can run through the steps of how to best handle them.

To begin with, you need to know that there might be nothing wrong with the products you sell, yet your customers still could wish to return them. Statistics show that over 30% of goods ordered online are returned later on compared to the 8.9% that have been purchased in a brick-and-mortar store. Now let’s see the reasons for returning an item. Although you might think that receiving a faulty or broken product is the highest percentage but it actually only accounts for 20% of the returns. Followed by the reason that the product looks different from what was displayed in the webshop, which accounts for 22%. The third most common reason for returning a product is receiving the wrong item, which occurs 23% of the time. And 35% of customers have other reasons to return.

That being said, the three main reasons for you to better understand the motive behind your dropshipping returns are the following.

Receiving the wrong item

Receiving the wrong item is mostly the result of the customer ordering the wrong item in the first place. As we all know, you can not try on the product you are ordering online. This can result in the customers’ dissatisfaction with the item. It can be either the fit or the size that your customer is not happy with, but eventually, it will result in a return. In these cases, your supplier most likely will not cover the cost of the return. Unless they have a policy that covers these cases too. Again, we can not stress enough that knowing your suppliers’ return policies is key. If you have a great fit chart or you clearly state the measurements of the products you are offering you should not be the one covering the return shipping fee. In this case, the mistake was clearly on your customers’ end.

The item received was not as per the description

This scenario is obviously the most inconvenient to deal with when you are processing dropshipping returns. This mistake can either originate from you by not listing the product in the right way or from your supplier by not giving adequate information. First of all, you need to find out about the root cause of the problem. If you are importing your listings automatically from your suppliers’ database, it can be their mistake. Whichever is the case, you should take responsibility as the voice of your own brand and shop. This will increase your credibility and you can win a returning customer with this approach.

If it turns out to be your suppliers’ fault, they should be issuing a refund or replacement to your customer. If they do not do so, you might want to start looking for another supplier. Just make sure that you are judging correctly and do no attack your supplier for no reason. This could potentially damage your working relationship and your long-term cooperation.

Damaged or defective item received

If you have a good supplier, this instance should be very rare for you to deal with. However, mistakes cal always happen either in production or throughout the shipping process. In this case, you have to make sure that you are doing your utmost to ensure compensation or product replacement for your customer. Usually, when a damaged item is returned, your customer will contact you and you will have to contact your supplier. After this, if your supplier has more of that model in stock, a replacement item can be sent. Otherwise, you will need to ask them to refund your customer. It is crucial to provide outstanding customer service in these situations so that you can be sure they will return to your store again and again.

Be the solution not problem-oriented

You will need to focus on the resolution of the issue, not the problem itself. Probably your customer will not know that you are a dropshipper so never blame your supplier. Take the responsibility yourself and make sure that your customer gets a refund or a replacement the soonest as possible. You should follow up with your customer immediately to ensure that they have a positive experience with your store even after receiving the wrong or a damaged product.

Determine whether a product is worth returning

It all depends on the kind of products you are selling. If you list low-cost items in your store, a dropshipping return might not worth the hustle. You need to evaluate if the product does worth enough to cover the return costs. If it does not, you should either refund your customer or offer the option to send a replacement.

Get the products returned to you

You might want to get your first couple of dropshipping returns arriving at your address. There are several reasons you would want to do this, at least in the beginning. This way you can monitor both the quality and the honesty of your suppliers. They will not be able to tell you that the product was not defective or in a better condition when they shipped it out.

Also, you can smooth out the return process if you are sending the goods to your supplier yourself. This might cost more than asking your customer to ship directly to your supplier but would definitely calm your nerves. Lastly, if you have not done a return with your supplier yet, this way you can see the whole process first handed. This will allow you to see the whole return process from the beginning and see how long it would take or if it could be difficult for your customers in the future.

The actual return process

If you have ever returned something whether it was a dropshipping return or sending something back to a warehouse, you would have a basic idea about how it works. It all starts with your customer requesting a dropshipping return. The first thing you should do is apologizing to your customer for the mistake regardless of who made it. Then you have to evaluate if the product is worth returning based on its value. If you want to go through with the return process, contact your supplier and get the return authorized.

Once you received the authorization from your supplier, you can either ask your customer to ship the product back or if it is with you already, you can send it yourself. For this, your supplier will probably provide you with a RA (Return Authorization) number that you will need to display on the package. Once the package is posted, you should keep track of its route with the tracking number you have or got from your customer. This way you can ensure that the package is on its way and not getting lost or held in customs. Finally, when your supplier receives the package you can either issue a refund or send a replacement item to your customer. Always make sure to follow up with your customer after this to ensure that the replacement or the refund was well received.

Offering a refund without a return

As we talked about it earlier, some goods might not worth the whole hustle of returning them to you or to your supplier. In these cases, as a dropshipper, you can offer a refund to your customer without receiving your dropshipping return back. Ask your customers if they want to have a replacement item while keeping the product that they already received. If yes, it is good news for you as you can avoid refunding their money. This way you still might end up with a positive net revenue on the purchase. But be careful and make sure to ask for pictures as proof before you send a new product or refund their money.

To sum up

Handling returns are not fun and not something you would want to deal with. But now we hope that you are equipped with all the knowledge that you would need to create a stellar dropshipping return policy and handle drop shipping returns in the future. If you found our article useful, we encourage you to share it with other dropshippers you know so they can also profit from this knowledge.

Also, always keep in mind that returns are a great way to make your store memorable for your customer. After a couple of days or weeks, they might not necessarily remember a purchase if everything went well. But they definitely will remember you and your store if you handled the return request and process in a professional manner and kept your customers happy. This will surely be something that they want to tell their friends about.