Dropshipping Return Policy: Here’s What to Do

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So things have been going well in your dropshipping business…and out of nowhere, you get an email from a customer asking to return something they ordered from you.

One of your first instincts might be to panic a little bit. The potential for bad reviews might be flashing through your head, or you might be worried about an influx of customers wanting to return things.

I’ve written this guide and video to address these concerns. I’m going to be telling you how to put together a high ticket dropshipping return policy, so you can be prepared when you do get your first customer return.

Don’t Panic

It’s natural to get a bit nervous when you’re dealing with an upset customer. But I’m going to start this post by explaining to you why it’s important for you to stay calm.

I get emails from students asking us how to deal with returns. They say they don’t even know how to get started and they don’t know how to handle those returns.

That’s why the first thing I’m telling you is simple: don’t panic. There are a lot of people who get worked up over problems that haven’t even happened yet, making these problems into things much more terrifying than they actually are.

When that happens, it’s easy to talk yourself out of working on something, because you’re sort of paralyzed by fear. That’s why I’ve always said that perfection is the opposite of done, because you get caught up on this ideal you’ll never achieve, and it stops you from achieving anything at all.

When you have to deal with returns, you’ll deal with them. To put it into the terms of an old adage, you’ll cross that bridge when you get to it.

Returns Aren’t a Huge Deal

Dropshipping Return Policy Tip: You’ll design your return policy in a way that either doesn’t hurt you, or hurts you very, very slightly (but ultimately makes your customer happy). It’s possible you’ll even design a return policy that makes you a bit of money when all is said and done.

If you’ve gotten yourself worked up into a frenzy about the return process, this probably sounds weird to you. You might be thinking to yourself, “Of course it’s a big deal! I hear about unhappy customers all the time online!”

Yeah, it’s true that you see stories about customers who are upset with their orders a lot. They’re sensational, so of course you’d notice these types of stories right away.

But the truth is, these stories are blown out of proportion. Returns will only happen on a very small percent of your orders.

All you’ll do when a return does happen is to follow your store’s return policy, which you get to design. It’s your store, so it’s your return policy.

You’ll design your return policy in a way that either doesn’t hurt you or hurts you very, very slightly (but ultimately makes your customer happy). It’s possible you’ll even design a return policy that makes you a bit of money when all is said and done.

Read Also: Dropshipping Profit Margin: What We Make on a $10K Sale (High Ticket)

How to Set Your Own Return Policy

All right, now that I’ve gotten the pep talk out of the way, I’ll get to the core of this post: how do you set your own return policy?

As you reach out to and begin working with different suppliers, you’ll notice that they each have return policies of their own. Take note of these things, and ask yourself, what happens when you have to return something to the supplier?

This isn’t something you need to demand from them right away. However, as you spend more time talking to them, doing their paperwork, and getting started, call up your rep or account manager and ask them about the return policy. Some suppliers will even give you this information before you ask.

One common possibility is the supplier has a restocking fee. I’ll give you an example with numbers to help you understand.

If the supplier has a 15% restocking fee, what you would do is offer your customer an 85% refund on their order once the item was returned to the supplier. That way, you’re not taking the hit for the fee.

In that case, all you would do is incorporate this into the return policy on your site. By doing that, you ensure that the customer knows in advance that there’s a restocking fee and they’re not unpleasantly shocked by it.

You could even break it down by supplier, if you have multiple suppliers on the site with various restocking fees.

I’m going to examine another type of return problem you’ll get: an incorrect or broken order.

It’s a completely different issue if the supplier shipped the customer something wrong or broken. In that case, the customer should obviously not be held accountable.

What should you do then? You work with the supplier to get the customer a return label and ensure a new (or correct) product is shipped out to them instead.

But Won’t People Refuse to Buy from Me if I have a Restocking Fee?

Dropshipping Return Policy Tip: The bottom line is, restocking fees are a common thing in online businesses. Your customers have seen them before, and they won’t be turned off by it.What matters in the end is that you set a return policy that works best for you and your business.

This is a question I’ll get occasionally, especially if the person who’s asking has been shopping on Amazon in the past. Some people wonder if customers will be turned off by a restocking fee.

Here’s something you might not have known: many products on Amazon actually have restocking fees, too. High-ticket items or items sold by third parties as opposed to Amazon itself are usually the ones with these fees.

Wayfair also has a restocking fee broken down by category.

The bottom line is, restocking fees are a common thing in online businesses. Your customers have seen them before, and they won’t be turned off by it.

What matters, in the end, is that you set a return policy that works best for you and your business.

Wrap Up

I’m going to close out this post by summing up the basics of forming your own return policy.

The first step is to keep level-headed. Then start by examining the return policies of your suppliers, and factoring in what happens when you have to return a product to them.

If there’s a restocking fee, reflect that in your own policy. When the supplier has made a mistake, remember not to hold the customer accountable for it.

Don’t forget, returns will likely be a low percentage of your orders. There’s a good chance you’re thinking about it in terms that are more complicated than it has to be.

We make a lot of sales, so our number of returns is higher than yours, but you can consider doing what we do when you get to that point, too. What we’ve been doing lately is renting a small warehouse space for about $30 monthly. It’s basically a storage unit.

Our customers send returns to this space, and we pick them up to send to the supplier.

You don’t have to worry about this yet, though, especially if you haven’t started a store yet or you only have one store up. It’s something you would do when you’ve got more experience and you’re making millions of sales per year.

At that point, the number of returns you experience will be higher simply because you’re making more sales. But in the end, I think that’s a pretty good problem to have.

You can learn more about how to get to that point by checking out our guide to dropshipping basics.

If you’d like to see more tips, consider signing up for our free Online Assets Playbook here. We also have a full course called Instant eCommerce Assets.

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