Dropshipping is a great way to start an online business without your own inventory. But sometimes, people want to return items they purchase.
They may arrive in the wrong size, variant or may not meet your customer's expectations.
In that case, what's the best way to handle returns for your customers?
It's a question many dropshippers face.
In this article, we will walk you through how to create a dropshipping return policy that satisfies your customers and protects your store. Furthermore, we will include a free return policy template that will help you to create your own return policy!
So, keep on reading, and we will show you every bit of information you need to remove “create a return policy” off of your dropshipping store’s to-do list.
Sounds good?
Then let's get started!
What is a dropshipping return policy?
Before we dive into creating a return policy for your dropshipping store, let's take a look at what a return policy exactly means.
If you feel like you already know what a return policy is, then feel free to scroll a bit further.
A dropshipping return policy is an agreement between you (as the online store owner) and your customer. It is one of a dropshipping store's standard pages and contains a set of rules that determine the "when & how" of returns on your store.
Here is an example of a return policy from Brummell:
This return policy covers the procedures in case of a customer:
- Receives a defective or damaged product(s)
- Wants to return their product(s)
- Wants to cancel their order
- Wants to amend their order
Also, don't worry, "refund policy" and "return policy" basically mean the same thing and cover the same topics. Some stores prefer to call it a refund policy, while others call it a return policy.
Why do you need a return policy while dropshipping?
Let's say you sell a product on your dropshipping store. A customer buys the product, but then decides they don't want it anymore.
So, what should you do now?
Without a return policy, many questions could arise. You will likely think about:
- Whether or not the customer can return the product after more than 14 days of receiving it
- Whether or not they need to contact you first before sending it back
- Who is going to pay for the shipping costs of returning the item
- What happens if your customer decides they want a different size of the same product
I hope you can imagine that getting return requests without a straightforward procedure for processing them can be painful, both mentally and financially.
A return policy will give you and your customers a clear process and set of rules to follow when it comes to anything regarding refunds and returns. Furthermore, a detailed return policy will avoid any discussions with you and your customers because everything regarding returns will be clearly explained in the policy!
Don't make the mistake of ignoring your return policy because you think that you won't need it.
According to research, at least 30% of products ordered on online stores are returned. For brick-and-mortar stores, this percentage is just 8.89%.
Not only that, but 92% of the surveyed customers said they would buy again if a store's return process is easy.
Last but not least, 67% of shoppers will check the return policy before making a purchase!
To conclude, you need a return policy when dropshipping to increase your conversion rate, avoid discussions, and have a clear set of rules to follow in case a customer wants to return anything.
What do you need to cover in a return policy?
Dropshipping is a popular online business model, but when it comes to handling returns and refunds, it has a big downside.
When dropshipping, you don't manage your own physical inventory. Furthermore, dropshipping products often ship from China (except when you're using local suppliers), while most customers are based in countries like the US and UK. Because of this, it can be hard to compete on return policies with big ecommerce companies like Amazon.
And like you've read before, it's crucial to have a return policy on your store. Online stores that offer hassle-free, customer-centric return policies will often see a strong returning customer rate. In contrast, stores with a strict, hard-to-follow return policy will often have to rely on one-time purchases.
So, what should you take into account to create an "easy" and "hassle-free" return policy?
Let's find out!
Note: Keep in mind that there is no single return policy that can be used for all online stores. Your return policy will depend on the products you sell, your supplier, your preferences, and your brand's tone.
1. Specify which items can be returned or exchanged
First of all, you should specify if all the items on your store can be returned/exchanged or if there are some exceptions.
Most stores will offer their return policy for their whole catalog, but in some cases, when selling certain digital items, for example, returns or exchanges are not possible.
It's also possible that you don't want to offer exchange or return possibilities for clearance items in the final sale, as Meowingtons does in their return policy:
2. Think about when things can be returned or exchanged
You will have to decide for how long your customers can return the items after delivery.
Typical durations include the possibility to return items 14, 30, 60, or 90 days after delivery.
By choosing a 90-day period, you give your customers a long time to think about whether or not they want to keep the item. However, you will have to keep in mind that you may get refund requests for purchases made up to 90 days ago and essentially "lose" those sales.
A shorter period is less customer-friendly, but you won't have to worry about refund requests from older purchases.
Important: Keep in mind that certain regions in the world may require you to give customers a minimum amount of days to return their order. For example, if you're selling in Europe, customers have the right to cancel and return their order within 14 days without justification.
3. Specify the required conditions of the item to return it
It makes sense that a customer can't return an item if they already damaged it or fully worn it out.
But what defines the borderline between a non-refundable item and a refundable item?
This is something that you will have to define in your return policy to avoid misconceptions.
Here are some questions that you can think about when it comes to the condition of the item:
- Will you accept returned items that are slightly worn?
- Can the package be opened, or does it still have to be fully sealed?
- What if there are parts or stickers missing?
- Does the item need to be returned with the original packaging?
- Can the item be used before the return?
Try to answer all of these questions and put them in your return policy. Here's an example:
As you can see, they specified that for an item to be eligible for a return, it must be unused and in the same condition a customer received it. Also, it must be in the original packaging.
4. Be clear about how the customer will be paid back
This is another one of those things that various online stores do differently.
Some stores will pay customers back using the payment method and the currency they have used to pay.
Other stores may only give customers a store credit in return, meaning the customer gets a coupon that lets them purchase other products for a discount or for free. And, in rare cases, you may also see stores giving customers items of equal value in return.
As you can see in the example above, they specify how they will pay back their customers.
To be extra clear in your return policy, we also recommend specifying the time it will take you to send the funds back to your customers.
5. Write down who will pay for the shipping costs
In general, you will have two choices here.
You can either offer your customers to pay for their return shipping costs, or you can let them pay for it themselves.
Since most dropshippers use suppliers in China, you will often see return policies where the customer has to pay for the return shipping costs.
However, you may also come across some dropshipping stores that do offer to pay for the return shipping fees, like Warmly:
Keep in mind, that shipping from your customer's country to China is probably way more expensive than the other way around.
6. Specify how your customers can initiate a return
Last but not least, tell your customers how they can initiate a return!
If you don't this, customers will have no idea how to return a product and will send you tons of frustrated emails on this topic.
Some dropshipping stores say that customers should email them if they want to initiate a return, but it's best if you have an address available where customers can directly send their order to return it.
Here's an example of a return policy with return instructions:
As you can see, they provide an address where customers can send their products if they want to initiate a return.
The Do Dropshipping Return Policy Template
[STORE_NAME]’s Return Policy
1. Return eligibility
To be eligible for a refund or exchange, you must have purchased one of the items sold on [STORE NAME].
Our return policy lasts for [NUMBER] days after purchase. If more than [NUMBER] days have passed since your purchase, we can't offer you a refund or exchange.
The item being returned must be in the same condition as you have received it. It must be unused and sent back in the original packaging. If it is not, no or only a partial refund will be granted.
The following items are non-returnable:
- Software
- Gift cards
- Items that are on sale
- [OTHER]
2. Return process
Once your return is received, we will notify you. The package and its content will be inspected, and we will let you know when the return is approved or rejected within [NUMBER] business days.
If the return is approved, we will send you funds equal to the purchase amount to the payment method you have used during checkout.
If you have any questions during the return process, please contact us at [EMAIL].
3. Exchanges
If the item you've received is damaged or defective, we can arrange an exchange for you. If you want to exchange your items, please send us an email and send your items to: [ADDRESS].
4. Shipping
To return a product, you should send us an email at [EMAIL], and send your product to: [ADDRESS].
Shipping fees for return items are your responsibility, and you must pay for them. Your order's shipping costs are non-refundable. If you have paid for shipping in your order, these costs will be deducted from your refund.
If you're shipping items worth over $50, please consider shipping the package using a track&trace number or purchase shipping insurance. We can't guarantee that we will receive your item.
5. Customer service
For questions, support, problems, or warranty claims, please contact us by email at [EMAIL].
Note: Make sure to consider the six things I talked about above and adjust the return policy to them according to your own policy.
Keep in mind that this template is no legal advice. Use it at your own risk. Do Dropshipping is not responsible for any events that may occur due to this template being used by a merchant.
Also, if you don’t have a professional email address yet, then you can check out this article here to learn how to get one for free.
How do you create a return policy in Shopify?
If you are dropshipping with Shopify, setting up a return policy is a piece of cake!
Simply navigate to Online Store -> Pages, and click on “Add Page”.
Then, just copy our Return Policy Template and paste it in Shopify.
Change all words that are located in the square brackets, and make any other modifications to make the return policy suited for your store.
For the final step, head over to Online Store -> Navigation and add your new return policy to your footer menu and/or other menus!
By doing this, your visitors will be able to easily find your return policy.
An extra tip is to add your return policy to Shopify’s “Legal” section.
You can find the “Legal” section by going to Settings -> Legal. Then, just copy and paste your return policy in the designated section.
By doing this, your return policy will be displayed during the checkout process, which will look like this:
How do you deal with returns on your dropshipping store?
If you are running a dropshipping store, you may be unsure about dealing with returns.
In general, ecommerce stores use a return merchandise authorization system (RMA) to manage returns. Among others, an RMA system lets your customers initiate their return and gives them a label with an RMA number. This allows them to ship the returning package without taking up your time.
When running a dropshipping store, a similar system can be implemented. Here's what the process will look like when a customer wants to return a product:
- First contact. The customer contacts you to request a return.
- RMA number request. You request an RMA number from your supplier.
- Return. The customer sends back the product(s) to your supplier and writes the RMA number on the address.
- Supplier refund. The supplier refunds you for the wholesale price of the product(s).
- Customer refund. You refund the customer for the full price of the product(s).
With an app like AfterShip Returns, you can easily manage your dropshipping store's returns.
When using AfterShip's app, here's how your return process will look:
You can check out a demo of the return page here.
Conclusion
After reading this article, you should be better equipped to deal with returns and keep your customers happy!
Using the shared template, app, and things to consider, you are armed with the tools and knowledge you need to create a great return policy for your business.
If you are still looking for more information on how to deal with returns and refunds when dropshipping, check out our full refunds and returns guide for dropshippers.
It will cover things like:
- Common causes of refund requests
- How to get fewer refund requests
- Some extra tips to follow for your return policy
- And more!
Keep in mind that if you don't feel like dealing with these long-distance returns, you can also consider using local dropshipping suppliers.
With dropshipping suppliers from countries like the US or the UK, you will not only have an easier time with returns, but you will be able to benefit from much faster shipping times as well!
Last but not least, if you planned to create a shipping policy for your store as well, then check out this article. It is an article similar to this one but focused on creating shipping policies.
Good luck with your dropshipping store!
