How to Handle Dropship Returns

Last updated on May 17th, 2022 at 05:12 pm

Ideally, none of your dropshipping customers will ever want to make returns. Unfortunately, we don’t live in an ideal world. If you run a dropshipping business, over time, the odds are very good you will encounter this situation. It’s of course important that you address the issue professionally and efficiently when these circumstances do arise. Doing so is key to maintaining positive relationships with both your customers and your suppliers.

That doesn’t mean this experience needs to be as challenging or frustrating as you might assume. This guide will help you better understand how to handle dropship returns, ensuring you are prepared to do so whenever necessary.

Addressing Dropship Returns: The Importance of Preparation

Anyone running a dropshipping business should strive to develop a process for handling returns as soon as possible. You’re simply more likely to handle the situation properly if you can rely on an established policy.

That said, it’s also important to remember that the types of products that you sell on your online store contribute to the likelihood of customers making returns. For instance, return rates for dropshipping and ecommerce businesses selling clothing can be as high as 35%

You need to research average return rates for your types of products to not only determine the degree to which you should prepare, but also to ensure you don’t allow unexpected returns to have a significant negative impact on your business’ finances. 

It’s also worth noting that online shoppers are becoming increasingly comfortable making returns. Consider the data below:

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Clearly, if you want to run a successful dropshipping business, you can’t expect your customers to never make returns. There’s a very good chance this will be a relatively common situation. You thus need to develop a policy that consistently satisfies you, your supplier, and your customers.

How to Develop Your Dropship Return Policy

Don’t make the mistake of assuming the right dropshipping return policy for one business will necessarily be right for yours. You need to thoroughly understand the unique return policy of your supplier to understand how to develop your own policy. It’s particularly important that you keep the following essential factors in mind:

Fee Policies

Study your supplier’s return policy to understand how fees are addressed or incurred when customers want to make returns. Does your supplier require customers to pay return fees, or do they require you to pay return fees? Additionally, you should confirm whether their policy charges related fees (such as restocking fees) for returned items. 

Time Factors

It’s also essential that you consider your supplier’s policy regarding return deadlines when developing your own policy. Most suppliers won’t allow customers to make returns after a certain amount of time has passed. Again, your policy needs to align with theirs.

Keep in mind that your return policy needs to account for these factors. It shouldn’t directly mirror your supplier’s policy. For example, perhaps your supplier gives customers 60 days in which to make returns. If your supplier requires you to compensate them for return fees, you don’t want to give customers 60 days in your policy.

Why not? Because (at least during the initial stages of working with a supplier) you want your customers to ship returns back to you instead of back to the supplier. There are many reasons this is the case. First, it allows for more transparency in the process. If a customer is making a return because they claim an item was damaged, you want to see the item for yourself to confirm this is the case. Sometimes a supplier might try to avoid return expenses by claiming an item wasn’t as damaged as a customer stated. Of course, handling the return process yourself also gives you the peace of mind that comes from knowing it was handled properly.

Thus, you need to adjust your return window to provide both your customer and yourself enough time to get the item back to its destination. If your supplier’s return window is 60 days, yours shouldn’t be any more than 55 days, otherwise a return might be rejected because by the time a customer shipped an item to you, you didn’t have sufficient time to return it to your supplier.

The Importance of Tracking Numbers 

It is necessary that your return policy clearly states that you only accept returns with tracking numbers. Sometimes customers will dishonestly claim they shipped a return back to you to avoid the process of actually making the return.  

Additionally, sometimes an item is not actually damaged (even though a customer claims it is), and they are simply trying to get a refund for a product that is actually in good condition. When the product is returned and it doesn’t arrive as expected, they’ll argue it must have been lost in the mail. This is obviously a situation you want to avoid. 

Return Address

Remember that you are a dropshipper and you may not have a physical office, so don’t display an address for customers to return the products that they have purchased from your store.

Instead, provide your email address and let your customers know that they can contact you if they need any information about returning a product.

What if I Have Multiple Suppliers?

Developing a return policy for multiple suppliers can seem more challenging than it needs to be. You might assume you need to create a separate policy for every supplier. However, unless the details of your suppliers’ policies vary substantially on a case-by-case basis, your best bet is to simply create a policy that encompasses them all. 

That could mean making certain compromises in the name of simplicity and ease. For example, to guard against returns being rejected, you should base your return window on the shortest amount of time one of your suppliers allows customers to make returns. If one supplier has a 60 day return window, one has a 30 day return window, and one has a 15 day return window, your return window should be based on the 15 day window. Yes, this is somewhat limiting, but it allows you to develop a single policy instead of trying to manage multiple policies.

Reasons for Accepting Returns

There are numerous reasons customers return items purchased online. Some of them may be your responsibility and others may not. Learn about these below:

The Product Doesn’t Match your Store’s Description

One of the most common reasons why a product gets returned is because it doesn’t match the store’s description when the shopper receives it. In fact, research has shown that 22 percent of online consumers report returning items because they received a product that did not look like its online picture. 

In this situation, it will either be you or your supplier who is at fault. If you copied the product data incorrectly from the supplier’s website, then it is your error. If the supplier gave you the wrong data, then the responsibility will lay with them because they failed to represent their products accurately. 

If your supplier is at fault, ideally they should send the customer a replacement product or give you a refund.

The Product Did Not Arrive on Time or Got Loss 

lf your customer has sent you an email because their item has not arrived and it was supposed to over a week ago, you will need to do so some investigating. It may be that your customer did not update their shipping address after they moved. If this is the case you won’t be at fault, but you should try and get their package to them as quickly as possible.

Other customers may think their package is lost, but the actual shipping time is between 2-3 weeks. It is always best to be open with the people that browse and shop on your website about your shipping times and not hide them. You can display your shipping times in multiple places:

  •  Product description page 
  •  FAQ page 
  •  Shipping policy 

If the package is lost, you will need to contact your supplier and let them know. If you cannot come to an agreement on the package being lost, you may need to open a dispute with them if your supplier is AliExpress.

The Product Doesn’t Fit Right or they Ordered the Wrong Size

Since you can’t try on items of clothing or jewelry when you order online, customers might want to make a return because they accidentally purchased an item in the wrong size. Your supplier may account for these factors in their return policy. But sometimes, they won’t accept returns when a customer is the one who made a mistake. 

Knowing the ins and outs of your supplier’s policy will help you a great deal in this situation. 

Regardless of their policy, however, we recommend you allow returns when an item doesn’t fit to help build customer loyalty.

The Product is Defective or Damaged when it was Delivered

Customers who return products they purchased because they received them either damaged or defective is not a common occurrence, but it does happen. 

If this does occur, we recommend emailing your customer to apologize and also covering the costs. The customer loyalty you will receive as a result may be enough to justify covering the expenses. 

When Returns Aren’t Required

A strong return policy that corresponds with your supplier’s policies will simplify the return process in most instances. However, it’s important to understand that sometimes your policy might not be financially beneficial when a customer wants to make a return. There may be instances when a return isn’t necessary. 

For example, sometimes customers return low-cost items. You might be better off simply sending a replacement in this case. This is particularly true if the return fees you would incur could be almost equal to (or potentially even greater than) the cost of sending a replacement. 

However, even if the costs associated with return fees would be somewhat lower than the cost of replacing an item, you might want to simply send a replacement to maintain a strong relationship with your customer.

What is the Process for Dropship Returns? 

When a customer wants to return a product that they bought, the returns process will look like this: 

  1. The customer who made the purchase from your store will contact you and request a return form. 
  2. You request a return merchandise authorization (RMA) number from your supplier for each customer. 
  3. The customer will send back the product to your supplier and note the RMA number on the address. 
  4. The supplier will refund your account for the wholesale cost of the product once they have approved the return.
  5. You will refund the customer for the full price that they paid for the product.

Tip: Throughout this process, it is important to always be polite to both your suppliers and customers as you don’t want to risk damaging either of the relationships.

Wrapping Up

No matter how great your product and customer service is, you will still come across a customer that will want to return an item eventually. 

Although your main goal will be to consider how you can create a policy that makes the right impression on your customers, your return policy should also align with your supplier’s policy. 

This will keep your customers coming back and while also building great relationships with your suppliers.