How to Deal With Returns in Dropshipping? EXPERT’s Guide

Dropshipping is the hottest thing in the e-commerce world right now. More and more entrepreneurs are entering this business model that allows you to sell products online without ever actually handling inventory yourself.

However, a small issue might make you hesitate a bit before taking the leap. Just relax.

I’ll show you “How to Deal With Returns in Dropshipping” so that you can jump in without any hesitation.

Here’s the catch. With great power comes great responsibility. And one area that can challenge even the most experienced dropshippers is handling returns.

When you’re not the one physically shipping orders to customers, handling returns can seem difficult to deal with.

Luckily, with the right strategies, you can master the art of managing returns in your dropshipping business.

In this comprehensive guide, we’ll cover everything you need to know, from setting clear refund policies to turning returns into repeat customers.

I’ll share tips on reducing returns by carefully selecting reliable suppliers and maintaining open and proactive communication with your customers.

We’ll also discuss automating returns with the latest apps and software.

By the end, you’ll have the confidence to handle returns like a boss and take your dropshipping business to the next level.

Let’s dive in.

Set Clear Expectations Upfront

Alright, let’s dive right into this critical first step – setting clear expectations with your customers from the start. I cannot emphasize enough how important having a solid return policy is for your dropshipping business.

Think about when you buy something online yourself. What’s one of the first things you look for on the website? That’s right – the returns information. Most customers will check out a company’s refund policy before purchasing anything.

As a dropshipper, having a clear, easy-to-find return policy is crucial for building trust with customers. It shows them you stand behind your products and provides peace of mind that returns will be hassle-free if needed.

What to Include in Your Policy

Your return policy page needs to cover all the key details your customers require:

• Return window – How many days do customers have to return an item? 14, 30, 60? Match this timeframe to your supplier’s policy.
• Return process – Describe how customers should start a return – via email, support ticket, etc.
• Refund method – Will you refund to the original payment method?
• Who pays return shipping – Make it clear if you or the customer covers this. Offering free returns is best.
• Restocking fees – Will you charge a restocking fee for returns? Be upfront if so.
• Exclusions – Call out any products not eligible for returns e.g. personalized, hygiene items.

Prominently Display Your Policy

Now that you’ve crafted an awesome returns policy, make sure customers can find it easily in your store with:

• A link in the footer navigation.
• A link on product pages.
• Pop-ups during checkout.
• Email confirmations after purchase.

The easier you make it for customers to find your returns info, the fewer questions you’ll get. Set clear expectations from the start and avoid surprises down the road.

You might also like:

• How to Deal With Long Shipping Times Dropshipping
• How to Dropship Digital Products

Turn Returns into Repeat Customers

Alright, time for a mindset shift. Many dropshippers see returns as lost revenue and wasted effort. But what if we turned that idea around?

With the right approach, you can turn returns into an opportunity to delight customers and drive even more sales in the long run.

Here are some proven strategies:

It’s All In The Attitude

First things first – adjust your attitude. Instead of getting frustrated when a return request comes in, get excited. This is a chance to wow your customers with amazing service. Kill them with kindness and they’ll remember the experience.

Respond promptly to all return inquiries with politeness and empathy. Put yourself in their shoes. Offer a sincere apology that the product didn’t work out.

Even if you have to ultimately process a refund, do everything you can to ensure the customer feels cared for.

Go Above And Beyond

Sometimes it pays to go above and beyond with returns. Here are a few ways to surprise customers:

• Send a small free gift with their return label – shows goodwill.
• Offer a discount code for their next purchase – an incentive to come back.
• Suggest an upgrade for free on their exchange – increase order value.

The goal is to spark a feeling of joy and appreciation in customers, despite the return.

Follow Up Afterwards

The return transaction doesn’t have to be the end. With some follow-up outreach, you can re-engage those customers and possibly convert them into repeat buyers.

• Send an email thanking them for their business and linking to popular products.
• Target them with remarketing ads showcasing new arrivals.
• Offer an exclusive VIP discount as a loyal customer.

Returns in dropshipping shouldn’t be seen as a failure, but rather an opportunity for relationship-building. The customers who have positive resolution experiences become your biggest promoters.

So bring on those returns – and turn them into lifetime loyal customers.

Managing Logistics as a Dropshipper

Now let’s get into the logistics of processing actual returns as a dropshipper. This may seem tricky when you don’t have the items on hand. However, there are some best practices you can follow to streamline the workflow.

Getting Authorization

First, you need to request a Return Merchandise Authorization (RMA) from your supplier for any customer return. This provides documentation allowing the return to be accepted.

Many suppliers have self-service RMA portals you can use to instantly generate RMA numbers and labels. Otherwise, a quick email exchange does the trick.

Provide your supplier with the order details, reason for return, and customer request. Save the RMA info to link up later.

Shipping Back to Supplier

Once you have the green light from your supplier, you can give the customer the go-ahead to ship the item back.

• Provide the customer with the supplier’s shipping address and RMA number to include.
• Offer to cover return shipping costs for maximum convenience.
• Ask the customer to send you tracking when shipped so you can monitor it.

Issuing Refunds

To keep your customers satisfied, it’s best to issue their refund as soon as you confirm the return is in transit back to your supplier.

You don’t have to wait until the supplier processes the return and refunds you to take care of the customer. Pay it forward to build goodwill.

Streamlining communication and logistics on returns removes friction for the customer. With the right systems and healthy supplier relationships, you can handle dropshipping returns smoothly.

Leveraging Returns Data

Now that you’re a returns pro, let’s talk about how you can actually leverage returns data to improve your business. Don’t let those refunded orders go to waste.

Returns can provide incredibly insightful feedback if you dig into the details. Here’s how to analyze:

• Look for patterns by product – “Are certain items returned more frequently?” This could indicate flaws.
• Check for sizing issues – Lots of “too small” or “too large” returns signal inaccurate size charts.
• Identify listing discrepancies – “Not as described” = your product copy needs tweaking.
• Note supplier performance – Higher than average returns for one supplier could mean problems on their end.

With this intelligence, you can:

• Update product listings to fix inaccuracies triggering returns.
• Refine size guides so customers order the right fit.
• Swap poor-performing suppliers to decrease defects.

It does require manually tracking and tagging return reasons. Or leveraging a returns management app that automates the analysis.

But, taking the time to learn from returns data will undoubtedly improve your customer experience and minimize refunds in the future. Don’t throw away those lessons. Use them to constantly fine-tune your dropshipping business.

Minimizing Returns From The Start

We’ve covered handling returns like a pro. But it’s even better to avoid returns in the first place. Let’s go over some proven tactics to minimize returns right out of the gate.

Assess Suppliers Thoroughly

Your suppliers make or break the customer experience. A single unreliable supplier can significantly harm your return rate. That’s why thoroughly examining suppliers upfront is crucial.

When evaluating new suppliers, inquire about their return policies and history.

• Look for suppliers with seamless return processes and no restocking fees.
• Check reviews to watch for complaints about defective merchandise or honor issues.
• Ask if the supplier handles returns from dropshippers frequently. Experience matters.

Taking the time to find suppliers with stellar customer service and quality control will pay dividends through lower returns.

Reduce Sizing Issues

Improper sizing is one of the main reasons for returns in the apparel dropshipping industry. But you can minimize these significantly.

• Provide detailed size charts for all garments, not just standard S/M/L/XL. List actual garment measurements.
• Allow customers to view sizing info on product pages, not just at checkout. Make it easy to find.
• Choose suppliers that provide size examples – images of models wearing each size are extremely helpful.
• Advise customers to reference size charts and select the size worn in other brands. Err on the larger size if between.

Giving customers the info they need to choose the right size will prevent the “too small” and “too large” returns.

Curate Accurate Listings

Returns happen when the product received doesn’t match expectations. You can address this issue by creating carefully detailed product listings.

• Feature high-quality images that accurately depict colors, patterns, and details.
• Provide detailed descriptions that capture the fit, feel, and function of the product.
• Personally verify product details instead of copying supplier listings.
• Label potential issues like lack of variety in prints, vegan vs faux leather, or transparency of fabrics.

Set proper expectations from the start. Don’t oversell or make assumptions in descriptions.

Proactive Customer Communication

Prevent returns by maintaining proactive communication with customers after they make a purchase.

• Send order confirmations detailing products purchased, delivery timelines, and return policy.
• Provide shipping updates by email when the order is fulfilled and add tracking info.
• Follow up a few days after delivery to ensure satisfaction.
• Remind customers of return window expiration dates.

Don’t disappear after purchase. Guide customers through the post-purchase experience. Returns will be top of mind if communication lapses.

Following these principles from the start results in a smooth customer journey with minimal surprises.

Automating the Returns Process

We’ve covered a lot of manual work around processing returns. But in this day and age, we have the technology to automate much of the hassle.

Introducing returns management software – custom platforms built specifically for streamlining returns workflows. They are a game-changer for dropshipping businesses.

Returns software can handle everything from:

• Automated RMA (return merchandise authorization) generation.
• Instant customer refunds.
• Intelligent routing of returns.
• Centralized returns data.
• Customer self-service portals.

No more searching for RMA numbers through suppliers. No more manually issuing refunds. No more shuffling return items to different locations. You simply set up customized automation rules and let the software take care of the rest.

Popular returns automation platforms include Loop, Return Logic, and Optoro Returns. They integrate with e-commerce stores and marketplace accounts.

Seriously, returns automation is an absolute must-have once your business scales past a certain point. Don’t let manual busywork hold you back. Embrace the technology.

Case Studies – How to Deal With Returns in Dropshipping?

Case Study #1: Home Goods Ventures

James found his home goods niche plagued by sizing issues for bedding and furnishings. Returns piled up from unsatisfied customers.

Introducing detailed sizing guides with actual product dimensions reduced his returns attributable to size mismatches by 92% almost overnight.

James also uses returns data to pinpoint items that are often returned. He either eliminates or enhances problematic products. As a result, his return rate has now dropped to an impressively low 1.3%.

Case Study #2: Auto Outfitters

Tina’s aftermarket auto parts store saw high fraud from customers falsely claiming items were defective.

Implementing returns software streamlined Tina’s process for tracking returns causes and added loss prevention features. By catching fraudulent returns early, she reduced invalid returns by 64%.

The automated workflows also enabled instant refunds and exchanges, improving the customer experience. Her Net Promoter Score increased by 22 points.

The bottom line is that verifying suppliers, optimizing listings, and proactive communication prevent returns.

• Small free gifts and incentives drive additional purchases from returning customers.
• Leveraging returns data identifies issues to fix.
• Automation software saves time and enhances customer satisfaction.

Follow these proven examples on your own dropshipping journey for returns success.

Key Takeaways – How to Deal With Returns in Dropshipping?

We’ve covered a lot when it comes to mastering returns and refunds in your dropshipping business. Let’s recap the key lessons:

• Set clear expectations with well-crafted return policies prominently displayed on your website and order confirmations.
• Focus on customer service – be empathetic and helpful when processing returns to create a positive experience.
• Get creative with incentives like discounts and free gifts to entice returning customers to purchase again.
• Streamline logistics by securing supplier RMAs quickly and issuing timely refunds. Make returns as smooth as possible.
• Leverage returns data to identify problematic products and suppliers as well as list discrepancies. Continuously optimize.
• Assess suppliers thoroughly, emphasizing those with strong return policies and high-quality merchandise. It makes a big difference.
• Refine product listings with detailed descriptions, sizing info, and clear photography to set proper expectations.
• Communicate proactively with customers before and after purchase to guide them through the process. Nip issues early.
• Automate returns with software to simplify workflows, prevent fraud, and delight customers.
• Learn from those crushing it – use case studies for inspiration to step up your own returns game.

By implementing these best practices, you can confidently handle returns and refunds in your dropshipping business like a boss.

The key is staying focused on customer satisfaction. By adopting this mindset and integrating it into your approach, returns can actually help you build loyalty and customer retention in the long run.

Let’s wrap up with answers to some common questions about “How to Deal With Returns in Dropshipping?”.

FAQs – How to Deal With Returns in Dropshipping?

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