How to Handle Dropshipping Returns & Refunds: The Definitive Guide (2024)

Dropshipping Returns & Refunds

Dropshipping is a great way to step into the world of Ecommerce, but it also comes with its fair share of problems. And one such issue is ‘Dropshipping Returns & Refunds.' It can get panicking for both dropshipper and customer.

Let's think about a dropshipper first; if the customer rejects an order, and the supplier has a policy of not accepting dispatched orders, the dropshipper will have to incur the loss. And say, if you are not even offering a return and refund policy to customers, then they would hesitate to buy a product from your store.

But is ‘Return and Refund Policy‘ really so scary?

Well, it's not. Readout our exclusive article about dropshipping returns and refunds in 2024, and explore how best you can avoid these issues for your store!

Pick up a trusted supplier for your services

Dropshipping Suppliers

Your dropshipping business completely depends on the supplier you have chosen for your store. In simple words, A supplier can either make or break your business. For example, suppose by any chance you chose the wrong supplier. In that case, it can lead to unexpected delays, defective products, a constant complaint from customers, profit loss, which in result would make you think the problem is from your end, and the business is doomed.

Hence, always make sure to choose a reliable supplier that would benefit you the most. The best you can do here is order a few samples from the supplier, dig into the supplier's past business, buy from competitors' and know their suppliers.

Choose a niche that might not require any returns

Dropshipping has several niches that would not require returns for minor defects. For example, if you are getting into clothing, chances are there would be size issues, quality issues, or color issues from your customer’s end after receiving the product. But if you are into selling a home and garden-related products, there would be very few chances of returns.

Know that reverse logistics can cost you more and not the customer or the supplier. Hence, pick up smarter choices from the start itself, like:

  • Massage Guns
  • CBD Products
  • Home and Garden
  • Artificial Plants
  • Sport and Entertainment
  • Montessori Toys

4 reasons that causes customers to return their products:

The product doesn't match the description mentioned:

One of the major reasons customers are not satisfied with the delivered product is that it does not match the description mentioned. You need to be sure about whatever information you are putting on your site for your customers.

For example, you have mentioned one of your t-shirts to be 100% cotton, but it turns out to be 70% cotton and the rest nylon. Or you have mentioned the t-shirt color to be royal blue, but instead, it's navy blue. Now, these situations can disappoint your picky customer's a lot. What best you can do here is cross-check all your data provided by your seller and then prepare a description on your own.

Even if you are using any tool for preparing descriptions, make sure to re-read it before publishing it on the site. And if the problem is from the supplier's end, mail them about the issue the customers have faced, send them original images of the differences, and sort out the issue.

Product is either damaged or defective:

Product damages can happen either from the supplier's end or during transit. Basically, the deliverables are delivered through various modes, and there are chances that they can break during these times.

Hence, keep a policy that whenever a customer opens an order, he/she must record a video of it. And, if you are dealing with a reliable supplier who is known for its quality service, he/she won't let you own the damage; instead, they will pay for it. For customers, give them an ideal option for refund/replacement, which is mentioned in detail below!

Product Coming out in different sizes than mentioned on the size chart:

Size issues often happen a lot if you are a clothing or footwear-specific dropshipper. Maybe this would have happened with you as well because different countries and brands follow different size charts for manufacturing.

What best you can do here is, mention a size chart differently for different brands. Get your questions cleared with the supplier and grab the size chart as earliest as you can. You can even keep a one-line message for your buyer to use a size chart for making any purchases.

Delayed delivery:

Customers often cancel or return a product because it's delayed from your end. So make sure to keep your estimated delivery window according to the older delivery patterns. For example, if the delivery is said to happen within 5-6 days, keep the estimated delivery date as 8-10 days. This would help your customer stay relaxed even if there is a bit of delay. Also, if the package arrives early, they will get surprised and happy about the quick delivery.

In short, It's a Win-Win.

Coming to the supplier, make sure to read your supplier's policy about delivery-related guarantees since many reliable suppliers offer this a lot.

How can you handle returns & refunds in your dropshipping store?

After reading what are the several reasons why customers often opt for refunds and replacements, the very next step is to handle all of it. If you are dealing with bulk orders, the better idea here would be to allocate people to manage this section. This is because many dropshippers avoid this section. Here are some ways you can do it all smartly:

By understanding what the customer needs

Not every time do you have to be too prompt with the refund or return a part. Make sure to understand where the problem lies. For example, if there's an issue with the quality, recommend your customer another product that aligns with their choices. You can even share with them a catalogue of your best-selling products for them to choose from, along with a few reviews that would help them make wiser purchase choices.

By giving a promotional offer

If your customer is not happy with the replacement idea, you can offer them different alternatives too. The best offers that often attract clients are exclusive coupon codes, score credits, a product upgrade of higher value for free, or free access to premium future launches. Understand that the main idea here is to make your customer come to your store again!

By giving refunds

Not every customer would accept your replacement offer, even if it's for free. So what best you can do here is not take the conversation for too long and just wrap the deal on a good note by refunding the amount. If you are offering a partial refund, make sure to tell your customers about the same. A quick email can help you resolve this issue.

Know that a customer's lifetime value matters more than any other aspect of the business, DO WELL WITH THIS PART!

How to deal with returns in dropshipping business

Now that you are aware of some of the common causes behind returns and refunds, it's time for you to work on it. But, that doesn't mean you won't get any return requests at all in the near future. However, the number comparatively would be much lesser! That means fewer reverse logistics issues; let's catch those tricks now!

Dropshipping Returns

1. Give an excellent customer service:

Customers give importance to experience now much more than before. If you're not tight on budget, then make sure to resolve returns in a better way.

This said, if the cost price of any product is not so high and the customer has already been a part of your store for a long time, and the mistake is from your end, like defective clothes, then let them keep the order with themselves, and re-order the same product for them. This is a great tactic for customer retention, and you don't have to lose a loyal customer just because of a bad purchase; you'll regret it later.

Also, whenever a return request comes to your portal, make sure to revert as politely as you can. Don't hold grudges, and make sure to let your customer speak about what they felt bad about the product/service. Remember that word of mouth marketing plays wonder, and just a polite experience of yours can bring great customers to your store.

Moreover, make sure to include your customers throughout the process. Share a tracking number with them so that they are aware of where their orders have reached exactly, and as a result, they won't bother disturbing you much!

2. Detect Scammers

Not every customer turns out to be a loyal customer, and some are scammers who have scammed dropshippers for quite a long period. And to add more to this, fraud orders are skyrocketing nowadays, but all thanks to major platforms like Shopify that have already integrated a fraud analysis tool in their software.

To prevent this situation, if you ever get a big order from someone and you smell something dicey, you can always send the customer an email and directly talk to them over a call. Nonetheless, there is a plethora of credit card fraud happening too. So make sure to pack or place the order when only you receive the amount in your account.

3. Build a return policy

The last best thing you can do to your store to avoid returns and refund issues is building a strong Return Policy. This policy must contain the terms and conditions that would come along with the purchase. If you want your customer to return the product within a certain window of time, add it all to the policy. You can even check out below our pro tip to build an excellent policy for yourself.

How to create a returns policy? (Pro Tips and Guide)

  • Understand your supplier's return policy first. If you are dealing with 2 or more suppliers at the same time, collectively understand the return window and then make one for yourself.
  • Many dropshipping product suppliers offer a 30-day return window to its user; hence in your case, make it 20-23 so that both you and your customer get some space to manage shipping delays.
  • In the other case, if one supplier is offering a 30-day return window, the other 23, and the other 35, you can give your customer a 12-day return window for you to manage everything properly.
  • Some suppliers even ask dropshippers for a particular return fee, hence keeping a check on it and planning their return fees accordingly.
  • Not every dropshipper has their own physical store; hence make sure to not specify any return address on the refund/return policy. Instead, you can mention your official email id and ask your customer to contact you to understand the further process.
  • Tracking numbers play an essential role in keeping track of where the product is currently and how much time the dispatch would take. Also, many a time, fraudsters don't even send the mail and end up giving a reason that it's lost in the mail. Thus, only accept returns with a tracking number and mention the terms and conditions, in bold, in the policy.

Using Shopify for Dropshipping? Refund Your Customer’s Amount this Way!

Shopify is undoubtedly a go-to Ecommerce platform many dropshippers have been using for years now. And since most of the dropshipping community lies and stays here, the refund process is not tedious.

All you have to do is, go to the specific order you want to refund click on the refund button available at the top left corner. Then select which product you want to refund and the amount to be refunded. If you have built up a policy mentioning you will just refund a partial amount, you can do that as well.

Over here, you can even mention the reason for the refund, and customers won’t see this; it’s completely for your future reference. You can also notify customers to let them know that their refund amount is on its way. Hence, you save time by refunding a partial amount you are saving your money too!

Top FAQs on Dropshipping Returns & Refunds

✔What is dropshipping?

Dropshipping is a kind of business method in which the business owner does not need to store products for selling. The dropshipper can directly purchase the products from suppliers, manufacturers, etc., and ship them to their customers. One can easily build a profitable, sustainable dropshipping store with minimal effort.

✔How profitable is dropshipping?

The dropshipping model is a business model where online retailers sell products to customers without owning any of the inventory themselves. The retailer only takes the risk of buying the products at wholesale prices and then selling them to customers at retail prices. But it has recently seen the popularity of dropshipping business because of its low-risk nature and ease of use.

✔Why should I go for dropshipping business?

Dropshipping is a popular business model and has helped many people achieve significant gains in efficiency and productivity. Following are the major benefits why you should go for a dropshipping business.
1. Dropshipping is a business model where the retailer does not have to hold inventory and can reduce overhead costs.
2. It gives dropshippers more flexibility to schedule their work and also more opportunities for growth.
3. The best part about dropshipping is that you can offer your customers a more comprehensive selection of products.
4. The dropshipper doesn’t have to worry about inventory, shipping, and returns.

✔Is dropshipping legal?

Yes, it is completely legal. At the same time, if you are looking to get into dropshipping business, then it becomes crucial for you to give special attention to trademarks and intellectual property.

✔Can I create my own website for dropshipping?

Yes, you can easily create a website if you want to run a dropshipping business.

✔How do I find the winning dropshipping products?

If you want to discover highly profitable products for your dropshipping store, then use the below-mentioned dropshipping products research tools.
1. Ecomhunt
2. Niche Scraper
3. Dropispy
4. Intelligynce
5. FindNiche

Wrapping it up | How to handle Dropshipping Returns & Refunds?

Returns are never in the hand of a dropshipper since they are not much aware of the product shipped to its customers. But how to manage returns and refunds is surely in the hand of a dropshipper. And as a dropshipper, you have to build such policies because it's about your brand effectively.

The key here is to treat customers as your king. No matter what the situation is, your business runs all because of your customer, and if a customer lands and orders a product from your space, it's your duty to give them the best experience so that they come again. Be as transparent with your customers as you can; describe what's true in the description.

Understand here, fake it till you make it won't work at all. You have to be polite and true to make things work for you. In this article, we have listed every possible trick and tip to manage dropshipping returns and refunds. And possibly till now, you would have thought a lot about your return policy, hurry up now and make the best one for yourself!

Till then, stay tuned to DropTweaks to explore more such tips and tricks related to dropshipping business!

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