How To Deal With Dropshipping Returns & Refunds

How to deal with dropshipping returns & refunds? Returns and refunds are two words that eCommerce entrepreneurs despise.

But refund requests aren't all bad - even if it didn't work out this time, you could still delight your customers when they ask for a refund. That is why you must maintain a positive attitude whenever a customer wishes to return an order or request a refund.

After all, you are the owner of the company. You are the face of your company. Your responsibility is to handle the situation professionally and provide the best service possible to your customers.

But, as a drop shipper, what is the best way to handle refunds and returns? It's a necessary part of running a business, but it's not easy, which is why I wrote this article.

I'll go over everything you need to know to make returns and refunds a pleasant experience for your customers and why a solid return policy can increase conversions and revenue.

What are the products that may not be returnable?

Before learning about the various types of refund requests and how to handle them in your own dropshipping store, it's important to understand that some products may not be worth returning to your dropshipping supplier at all.

Some products may be more expensive to return than to send a replacement to your customer. Also, some dropshipping suppliers charge a restocking fee for returned products.

For example, a customer paid $6 for a headband that didn't fit properly. This customer wishes to return. You are not at fault in this situation. In this case, offer your customer a replacement while allowing them to keep the original product.

This would be much easier than handling the entire returns process.

It would also be less expensive if you followed the headband example. Simply let your customer keep the incorrect one and send a new headband.

Furthermore, your customer may have become a repeat customer for your dropshipping store due to this small act.

The Most Common Reasons For Refund Requests When Dropshipping

Understanding the most common reasons for refund requests is a great way to get fewer refunds.

You'll know what to pay attention to and where to double-check.

1. The product does not match the description in your store.

One of the common reasons for refund requests is that the product your customer received does not match the description on your store's website.

If you believe it is your supplier's fault, send an email or an AliExpress message if you use AliExpress to your supplier inquiring about the problem and requesting that he/she send you a replacement or a refund if they are at fault.

2. The product does not fit properly, or they ordered the incorrect size

This is always possible when you sell clothing or jewelry through your dropshipping store because you cannot try on items when shopping online.

Perhaps you've experienced something similar when shopping online. As if you ordered some pants or t-shirts that didn't fit quite right.

When this occurs, your supplier is unlikely to cover the return costs. Unless, of course, they are fantastic. Knowing your supplier's refund and return policy will make all the difference.

You should inquire if you are unsure about your supplier's refund and return policy. In this case, I recommend that you accept returns regardless of your supplier's policy.

Clothing has one of the highest online return rates. Clothes are returned at a rate of 40%. When dropshipping clothes, it's not uncommon to receive a refund request.

One thing you should make certain of is that your dropshipping store's description includes a sizing guide. Because your customers can double-check if the sizing is correct for them, you may see a significant decrease in refund requests.

Also, ensure that the sizing guide is in the sizing of the country to which you want to dropship and does not include Chinese sizing, which is typically smaller.

3. The product is faulty or damaged.

Although this is unlikely if you have a dependable supplier, it may occur occasionally. What could happen is that the product does not work or is damaged while being delivered to your customer.

Request that your customer send you photos or a video of the damaged product. After that, send these to your supplier.

If you have a great business relationship with your supplier, you may not even need pictures or videos, but they are a great way to determine whether or not your customer is telling the truth.

Then, most of the time, you simply need to contact your supplier and request that they send a replacement to your customer or refund your money.

But what if you don't buy from AliExpress vendors? While the above is true for most AliExpress suppliers, most dropshipping suppliers will not cover return costs for defective products because, in their minds, they did not manufacture the products and thus are not liable for defects. They simply see it as a risk associated with selling products to a retail market.

4. The product was not delivered on time or was lost in transit.

This is primarily for people who dropship from China. Your customer may believe their package has been lost because it has been one week, despite the usual shipping time being between 2-3 weeks.

Or you're looking at your customer's order tracking information and notice that the last update was about a month ago.

The good news is that if you use AliExpress and can't agree with your supplier that the package was lost, you can now open a dispute.

Just take a look at your supplier's guarantee. Most AliExpress sellers will offer a delivery guarantee of 60 days or less.

» Make sure to read my What Should We Not Sell At Dropshipping? post

How should I handle a refund request?

The best advice I can give you for writing the first response is to avoid mentioning a refund because doing so will result in losing all profits from that customer.

This isn't to say you should never refund, but if they agree to wait for a replacement, it's almost always better for you financially.

So, what should I say? First, determine whether it is less expensive for your customer to return the product to your supplier or allow them to keep it and send a replacement. You already knew this at the start of this article!

If your customer responds negatively to your email offering a replacement, offer them a refund in your second email.

Of course, you should not overlook your customer's lifetime value. This means that even if your customer has requested a refund, you can still entice them to return to your dropshipping store.

How? Ensure that your customer service is on point and that you did everything possible to resolve the issue for your customer. Even if, in the end, you did provide a refund.

You now have a chance that customers will return to you because they have fond memories of you.

How to Reduce Refunds and Returns When Dropshipping

You now understand the most common reasons for refunds and returns and how to handle them in your own dropshipping store.

But do you know how to handle refunds and returns appropriately? Of course, get rid of them!

» You might also be interested in How do You Approach a Supplier for Dropshipping

1. Conduct a fraud check

Before shipping any products, ensure that the order is legitimate and that the chances of it being a fraudulent order are low.

Shopify's platform includes a fantastic tool for fraud analysis.

If you have a large order, you can always send an email to the customer asking if the amount they ordered is correct.

However, don't forget to rely on your instincts as well.

As an example, suppose the billing address is in the United States, and the shipping address is somewhere in India. This may be an instance of a fraud order.

One last piece of advice is to be cautious when using PayPal eChecks. Wait until the payment is received in your PayPal account before fulfilling the order. People may cancel their checks once you have delivered the products they ordered.

2. Excellent customer service

This is critical for all of the refund requests listed above. Always make an effort to be as courteous and understanding as possible.

But that's not all; if you provide excellent customer service, you can even avoid refund requests. Furthermore, it will reduce your chances of being banned by PayPal.

This is most likely for people who dropship from China, but it could also apply to people who need shorter delivery times. The most frequently asked question is where their order is.

You may be asked for a refund if you do not respond politely and adequately. Your client may not want to wait any longer.

Why do all these people ask where their package is when we automatically send them an email with tracking information when their order is shipped?

Don't overthink it because some customers clearly don't know, or they may believe you have more information you're not sharing.

» Wondering How to Decrease AliExpress Dropshipping Delivery Times? This post is for you!

The Bottomline

So, now you know everything there is to know about handling refunds and returns on your dropshipping store!

You can see that you may receive various refund requests, but one thing is sure: be polite to your customer so that the chances of you issuing a refund decrease.

If you were concerned about handling refunds and returns on your dropshipping store before reading this, I hope you are no longer!

Remember, it all comes down to you and how you treat your customers. If you treat them well, they may return to buy more!