Dealing with Dropshipping Product Returns

Chapter 6

While the whole order fulfillment process of purchases made from online dropshipping stores is generally taken care of by the dropship supplier, handling returned products falls on the shoulders of the dropshipping store owner, you. But, how do you handle the return of products that were shipped to the customer directly, without you even being involved aside from the fact that the purchase was made in your dropshipping store?

First of all, the fact that you were not involved in the order fulfillment does not relieve you of the customer care service duties that you obviously have as an online store owner. The fact that your supplier handled the order, does not change the fact that the customer sees you as the responsible party, since he made the purchase in your store. You have to make sure you have an excellent return policy ready to be activated as soon as a return request comes in, because a proper way to handle a return can mean the difference between a lifelong, loyal customer and a disappointed, angry one who will not have anything positive to say about your store.

When looking at the process of handling return items, you can break the process down into two separate parts: the preparation for returns before they happen, and the handling of returns when they happen.

Preparing for returns

Base your return policy on that of your supplier(s)

Having more suppliers makes handling returns harder, because you have to know all the different return policies of those suppliers to make sure your store’s return policy matches what the supplier promises customers. Even if a product is returned to you, and not to the supplier, ultimately, the supplier will have to take care of sending a new article, replacing the returned product, to the customer. This means that your return policy has to offer enough room for the supplier to do their part. Also, the product has to be returned to you in time for you to get it to the supplier within the return time permitted.

So, inform yourself about the return policies of your suppliers:

  • restocking fees, if any
  • return period
  • return shipping fee responsibility
  • mistake orders return acceptance
  • return process handling

Create your store’s return policy

Based on the return policies of your suppliers, you can specify your own return policy. Customers should be able to easily find your return policy when visiting your online store. The purpose is to implement a return policy that fits the different return policies of all the suppliers you’re working with, so you won’t have to work with different return policies for different suppliers, which would complicate matters greatly. When you write down your return policy, keep in mind the following pointers:

Make sure you don’t give customers too much room to return the product

If your supplier provides clients a return window of 30 days, you should make sure to offer your customers a slightly shorter period to send in their return item, to build in a safety margin to be able to cope with unexpected events such as shipping delays, etc.

When you’re working with multiple suppliers, try to fit the specifics of all separate return policies into one return policy that matches all of them

To illustrate: if one of your suppliers gives you a 21-day return period and another gives you 14 days, you can use a general return period for your store of approximately 10 days which would accommodate the policies of both suppliers, instead of using two separate return policies.

Do not provide a return address on your policy page

Instead, instruct the customer to get in touch with you about the issue at hand. At that point, you can give them the address to use to send their return item. That way, you can decide later if you want customers to ship the item to you first, or straight to your supplier.

Returns need to be sent with a tracking number

If customers send their return item without a tracking number, you can get yourself into endless yes-no discussions, with them claiming they shipped the item, but it supposedly got lost in the mail since it never arrived. Make sure to emphasize this in your return policy to avoid problems.

Handling returns

With your return policy taken care of, let’s take a look at the actual process of handling a return. First of all, there are several common types of returns that you will likely have to deal with:

Customer ordered wrong item (i.e. wrong t-shirt size)

Very common, since you cannot try before you buy when shopping online. When situations like this happen, a supplier will generally not cover the return. But, in any case make sure you know your supplier’s policy and decide if you want to cover the instances in your own policy. Obviously, supplying high quality customer service involves you handling these cases and making sure the customer receives a new item in the right size. It will help build your reputation and it creates a high level of loyalty among your customers when they know how you handle this type of situation.

Since the mistake wasn’t made on your end, you can ask the customer to pay for the return shipping.

The item’s description is inadequate

This mistake can refer to two possible scenarios: either you mis-represented the product in the product listing on your website, including its description, or your supplier did. For obvious reasons, it is important to find out on which side the mistake was made. If  you’re responsible for entering product listings manually, you are likely the one who made the mistake. However, if you import listings automatically, the mistake more than likely stems from the original product listing in the supplier’s catalog. In any case, handling returns of this type are your responsibility, even if the mistake wasn’t yours. You can’t brush the mistake off on a supplier and do nothing, you have no other option than to handle the situation and make sure the customer walks away satisfied, with a new item. If the mistake was the supplier’s, you can obviously try getting a refund or get them to send a replacement item to your customer. If they are unwilling to take responsibility, you may want to start looking for a different supplier. Just keep in mind that mistakes like these are a dime a dozen and it is not in your interest to start attacking or accusing the supplier – the one important thing for the continuity of your dropshipping store is that the customer is serviced properly and gets reimbursed or sent a new product. If the supplier rejects your claim and does so repeatedly, draw your conclusions and try a different supplier.

The item is damaged/ defective

This type of return requires the most decisive approach to all possible scenarios. If you want your store to represent quality, you act immediately when the customer contacts you about receiving a defective product. Do what you can to handle the situation as smoothly and pleasantly as possible, which starts by not making the customer pay for the return shipping. You can try to get a return label from the supplier and send it to the customer by email, but if that’s not possible, simply cover the cost of the return shipment. When you’re working with quality dropshipping suppliers, this type of situation should not happen often. When it does happen, handle it as well as possible by letting customer support shine. This approach will surely pay off: customers will remember receiving amazing service and mention it on many occasions, giving your store free and welcome publicity!

Not every situation calls for a return shipment. Sometimes, the article your customer wants to return is not worth the return shipment, simply because it’s so cheap that it makes more sense to just let the customer keep it and send the replacement article without collecting the return item. Costs of this are not high, but your customer service will be revered, which will also boost your store.

Collecting returns yourself

If you want to make sure your customers receive the best possible customer service, you may want to consider handling (part) of the returns yourself. Depending on the amount of return requests you receive and the amount of returns you can actually handle yourself, you can limit the return you handle yourself to the more expensive products (for example all products worth more than $100). If return handling is not an option for you, you should consider going through the process yourself at least once, just to be familiar with all the different aspects of it and the problems you may experience along the way. But that’s not all, handling returns has more benefits:

  • It keeps your supplier honest: If you’ve already established the condition of the article, the supplier will not argue about it. In general, you force the supplier to deliver good service.
  • Process optimization: When you handle returns yourself, you can make sure everything is handled correctly and carefully, ensuring your customer gets the best possible service.
  • Hands on experience: it is always good to know all the processes involved in running a business, even if a particular aspect is not usually handled by you. Having the actual experience makes you better equipped to estimate how long a return process will take and how easy (or difficult) it is.

The returns process

Usually, the actual process goes something like this:

  1. The customer contacts you with a return request: First of all, you determine the reason for the return. Then, you contact your supplier to request a so-called Return Merchandise Authorization (RMA) number. At the same time, you set the customer at ease by ensuring them that you will take care of this situation.
  2. The supplier approves the return: Assuming this will happen, you give the customer the return address to use and the RMA number (if they’re returning it directly to your supplier). Customers will need a reminder they need to purchase a tracking number in case they pay for the return shipment.
  3. The package arrives: If the item is shipped to you, it’s your responsibility to check the item for damage, to take pictures to confirm its condition and by doing so, basically forcing the supplier’s honesty. Then, send the return item to your supplier. If the item was sent to your supplier directly, you should check in with your supplier regularly to make sure you know when the package arrives. After it has arrived, work on either receiving the refund your customer is entitled to, or a confirmation of the sending of a replacement product.
  4. The customer will receive a replacement item or a refund: Check with the customer if the package arrived in good order in case they requested a replacement, or forward the refund you received from your supplier to your customer.

As you can tell from the information above, handling returns is a major part of running your dropshipping business. Not because you’re aiming for that to happen, because you’ll be much better off if you’re not handling returns on a regular basis. But you should expect to at least spend some time on handling returns, which forces you to pick your suppliers with the utmost care and keep close ties with the ones you picked to make the whole process of handling returns as smooth as possible.