Dropshipping Returns: How to Set up & Manage Your Shopify Return & Refund Policies? [Full Guide]

Martin

Alongside the surge in e-commerce comes a much less desired activity for online merchants: dropshipping returns.

Even with limited capital, it is not difficult to start a dropshipping business today. To do so, you need a good dropshipping business plan and do a few things before launching your start-up.

Sure, you would be happier if customers just stopped submitting return requests. However, this is NOT going to happen. Find out how dropshipping is legal and what to do to start a risk-free dropshipping business.

With the dropshipping business model, returns do happen. And you, as a dropshipper, must do something about it.

Though you may have many goals that require your attention, handling dropshipping returns like a pro should be high on your priority list.

In this guide, we will discuss everything from the main reasons why online shoppers request product returns to how to deal with these situations in a professional manner.

So, let’s dive in.

What are the main causes of dropshipping returns and refunds?

Understanding what motivates your customers to return a purchase can help you build great relationships with them and minimize returns. So, read on!

According to Statista, in January 2019, the main reasons for global online purchase returns were as follows:

  • Faulty or damaged products;
  • Items not being as described online;
  • Poor quality products;
  • Delivery problems.

It is perfectly understandable that not being able to see a product in person before purchasing is a big downside of online shopping.

Even with the help of product images and descriptions, it is not always easy to judge the fit, color, and size of items online.

Thus, it is not uncommon for online shoppers to purchase something they will come to regret as soon as their order arrives.

Now that you know what causes a customer to request a return, it is time to learn how to find a reasonable solution to such a problem. But, first, let’s discuss how returns work with dropshipping.

How do returns work with dropshipping?

As you are not dealing with inventory and shipping (you are a dropshipper), the concept of accepting dropshipping returns for your products may sound confusing.

Namely, your customers do not know that you are collaborating with dropshipping suppliers whenever you receive a return request.

Here’s the guide that can help you to find a dropshipping supplier that can support your business idea.

That’s why you need to know what the process looks like when a customer wants to return an item.

And the dropshipping return process typically looks like this:

  1. Your customer informs you that they want to return a product.
  2. Then, you request a return merchandise authorization number, i.e., RMA from the supplier.
  3. Next, your customer sends back the product to your supplier.
  4. And your supplier refunds your account for the wholesale price of the product. Finally, you refund your customer for the full price of the product.

Unfortunately, some things may complicate this process. And these things include:

  • Restocking fees. If your supplier charges restocking fees (extra fees for returning a product), it is not advisable to include them in your return policy. Even though you may have to cover these fees from time to time, you will probably recoup them from selling to other customers.
  • Defective products. In most cases, suppliers do not cover return postage for defective products. The main reason for this is that they are not liable for defects because they are not manufacturers. But you need to compensate your buyers for the return shipping fees for defective products. After all, you want to build a successful dropshipping business, don’t you?

Understand the dropshipping return policies of your suppliers

Again, as you will not process the dropshipping returns yourself, you must have a good understanding of your suppliers’ return policies.

The whole return process will happen in the background. And this involves effective communication between you and your suppliers. Therefore, you must have a good understating of their return policies.

But before we get any further, let us clarify one thing. You, as a dropshipper, have to write YOUR OWN return and refund policy as people will buy from your store and not directly from your suppliers.

CBD Dropshipping Shopify: Best Practices, Suppliers & Products to Sell

And you have to display your return policy on your site.

Still, you must take into account your suppliers’ respective return policies before writing your own.

Here is what to pay attention to in their return policies:

  • How they deal with returns (the entire process);
  • Whether they accept returns on wrong orders (e.g., wrong shoe size);
  • Who pays the cost of return shipping;
  • How long your customers can send an item back after receiving it;
  • Do they charge restocking fees (and if so, what are they?)

We also want to mention that in case you work with more than one supplier, you must know the return policy of each supplier.

Write your own return policy and ensure it complies with that of your supplier

Of course, you should not turn the return policy of your supplier into your own. Instead, you need to use their policy as a framework and make sure your policy matches theirs.

When writing your policy, please consider the following:

  • Determine the timeframe during which you will accept dropshipping returns. Give your customers enough time to request a product return. For instance, if your supplier gives you a 15-day return window, you should give your customers 10-12.
  • Cover the return policy of each supplier within your policy if you work with a few suppliers. For example, one supplier may have a 30-day return period and the other a 20-day return period. If this is the case, you can give your customers a single return policy of, let’s say, 15 days for items from both suppliers.
  • Avoid specifying any return address on your refund and return policy page. Again, if you work with multiple suppliers and specify a few addresses in your policy, it may be quite confusing for your customers. So, you simply need to state in your return policy that your customers should contact you for more information about returns via e-mail.
  • Do not accept dropshipping returns that do not have a tracking number. You do not want your customers to claim they sent the product back to you, and it gets “lost” in the mail, right?

How to create a return policy page for your dropshipping store on Shopify

If you are about to use Shopify for dropshipping, you need to know how to create your Shopify return policy page to be clear about your dropshipping returns.

Want to set up your first store on Shopify but do not how to create your Shopify return policy page? Then read on!

To create your Shopify return policy page, you need to follow these steps:

  1. Log in and go to your Shopify admin page.
  2. Then, you need to open up the “Online Store” tab and select “Pages”.
  3. The next thing you need to do is click the “Add Page” button.
  4. Create a title for your return policy page. (You can use something like, “Refunds and Returns Policy”.)
  5. Go to the “Content” box and include clear information regarding your dropshipping returns. Cover several points to ensure that your customers know the limits and restrictions your store places on returns. (You can use Shopify’s refund and return policy generator for free.)
  6. At the bottom of the page, click “Save”.
  7. Finally, click on “add it to your store’s navigation” to ensure that people who visit your site can actually see your Shopify return policy page.

How to handle dropshipping returns in an expert manner

We know that handling dropshipping returns may be one of the thorniest problems for you. But, you must learn how to become a problem solver.

Think of the restaurant service. Like a waiter almost always accepts a dish sent back and fires a new order for their guest as soon as possible, you may also want to accept and deal with dropshipping returns the right way.

As online shopping becomes the preferred method for a lot of people, the importance of providing simple, quick return solutions is crucial.

So, here is how to handle dropshipping returns professionally:

1. Determine the reason why your customer wants a return

When a buyer submits a return request, the first thing you need to do is ask them why they want to return the item. Just ensure your tone is apologetic and positive rather than negative and suspicious.

Another important thing you need to do as a dropshipping store owner is to ensure the product meets all the requirements so that you can process the return.

And remember that it is one thing to accept a return if the product is damaged/wrong, does not match the product description, etc.

But it’s quite different to accept a return if the customer has already used the item or simply changed their mind.

2. Apologize to them for the issue

Your supplier is responsible for solving problems with dropshipping returns. However, you may share this responsibility with them because you will be the one responding to a customer complaint.

That’s why you should never blame your supplier for the mistake, no matter if they sent the wrong or damaged item, etc.

You are the one who must own the problem and respond to a customer complaint. After all, it is you who are the guilty party in the eyes of your customers. This way you can increase your on-page dropshipping conversions too.

So, you can write something like this to your customer in order to apologize for the inconvenience:

“Dear [the name of your customer],

Please accept our sincerest apologies for the delivery of [e.g., wrong order] to your address. We are really sorry that …”

3. Respond to the return request

Once you have apologized to your customer, it is time to respond to the return request. That’s to say, you need to let your customer know that you are going to fix the problem.

It is important to check if it is cheaper for you to ask your customer to return the item to your supplier or to simply send a new item to them without asking them to return the first one.

You need to do so as in some cases, return shipping can be more expensive than sending a replacement to your customer.

Also, before mentioning a refund, check if your customer is able to wait for a replacement or not.

Either way, you need to contact your supplier before verifying your customer’s replacement/return request. This is something we will cover in the next section.

4. Contact your supplier

Whether your customer wants a replacement or their money back, you must inform your dropshipping supplier about the issue. As mentioned above, you need to request an RMA number from the supplier.

If your supplier approves the return, you need to give your customer the return address and the RMA number. Keep in contact with your supplier to stay informed about the entire return process.

Depending on your customer’s preferences, your supplier will either ship a new product to them or refund your account for the wholesale price of the product.

If your customer wants a refund, then you need to refund them for the full price of the product.

How to handle dropshipping returns when working with AliExpress or Chinese suppliers

Dealing with dropshipping returns when sourcing from AliExpress or Chinese suppliers may not be that simple.

The main reason for this is that you might not want your customer to send the item back to China, particularly if your customer is not based in China.

When there is a problem with an order a customer placed on your site, it is often because the order never arrived (a missing item) or your customer is unhappy with the product.

This means that AliExpress dropshipping returns often happen due to the long shipping times or the goods do not match the description. Here you can learn how to reduce AliExpress Shipping Times.

For the first case, you must discuss the problem with your AliExpress supplier and ask them to resolve the issue.

However, for the second case, it would be wise to use better quality product photos and be as specific and realistic as possible in your product descriptions.

Nevertheless, once you and your supplier have made the mistake, you must take responsibility and do your best to make things right. Contact your supplier and resolve the issue together.

When it comes to creating your AliExpress return policy, you must write a crystal clear return policy so that your customers know what to expect from you.

That way, you will not only minimize the rate of dropshipping returns, but you will also make your customers happy.

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Conclusion

A customer may be unsatisfied with their order because of many reasons and they may ask for a replacement or a refund.

And if you do not have a proper strategy and clear rules for handling dropshipping returns, it will not bring anything good to your business.

It will lead to a bad online shopping experience for your customers, ultimately hurting your business reputation.  

Therefore, you must establish a clear and fair return policy and try to keep your customers happy during the entire return process.