How to Deal with Dropshipping Returns and Refunds

Handling dropshipping returns on eBay and other dropshipping platforms isn’t as difficult as many people think it is.

In this article, you will learn exactly how to handle returns as a dropshipper without losing your customer to your competitors.

But first, we need you to understand why customers actually return dropshipping products or ask for refunds.

Why Do Customers Return a Product or Ask for a Refund?

There are a variety of reasons why customers return their purchases or request that you refund them. In this article, we will discuss the 5 most common reasons customers return a product.

1. The product was damaged or defective

Dropshipping products can get damaged in the process of shipping. There are also cases where the damage happens right in the warehouse. In a situation like this, the vendor is expected to refund the customer.

It’s either you deliver the dropshipping product undamaged and functional or you refund the customer. The easiest way to avoid dropshipping returns of damaged products is to carefully inspect the items and store them using a custom package before shipping.

Oftentimes, most cases of damaged products during shipping are a result of poor packaging. You can still reduce packaging costs while ensuring the safety of the products. If you are selling a dropshipping product that is difficult to find unique packaging for, you can outsource your packaging.

2. The product did not arrive on time

Research has found that 45% of shoppers have changed their minds about making a purchase because they were dissatisfied with the delivery options available. Now imagine what will happen if they eventually place their order and the product is not delivered on time.

According to a consumer study by Oracle Retail, 13% of consumers would never order from the retailer if the delivery is late. This is primarily why most dropshipping experts find it very difficult to retain their customers.

The Consumer Contract Regulations in Scotland state that consumers have 14 days to inform the merchant that they would like to return an item they ordered. As a consumer, you have another 14 days of grace within to return the item or forfeit a refund.

The consumer’s right allows him to demand a refund if an item they ordered didn’t arrive within 30 days. But for you to avoid incessant dropshipping returns and refunds, you must learn how to explain a late delivery to a customer.

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What’s the most perfect way to communicate or respond to delayed delivery to a customer? While it’s possible to ship orders promptly using reliable logistics companies and still experience late delivery, it’s important to learn how to respond to the customer so that you don’t lose him. Firstly, you need to take responsibility and apologize. Secondly, don’t make promises you can’t keep. And thirdly, proffer a solution and follow them up with calls or emails.

3. The product vendor shipped the wrong product or size

If you sell size-sensitive dropshipping items like shoes, clothes and rings, you need to pay rapt attention. Sometimes, the customer places their order correctly, but the vendor will mistakenly ship the wrong item. And in the worst scenario, mix up the order with that of another customer who ordered something similar.

When the fault is totally from the vendor, he or she will have no option but to return the dropshipping product. The cost implication of dropshipping returns like this will be taken care of by the merchant.

4. Buyer’s remorse set in before the product arrived

A lot of customers buy things online on impulse. Oftentimes, emotionally driven purchases always result in buyer’s remorse. This can be a very frustrating situation if you don’t learn how to deal with impulsive buyers in your dropshipping business.

Oftentimes, customers who return products due to buyer’s remorse do that for no obvious justifiable reason. To protect your revenue as a dropshipping expert, you will need to set terms and conditions for product returns. If the customer can’t find enough justification to ask for a refund, they might as well do a chargeback.

5. The purchase was made using a stolen credit card

We all at one point or the other heard of credit card fraud. Credit card fraud can happen in a variety of ways. The most common is when criminal elements use a stolen credit card to make purchases online.

When the rightful owner of the credit card eventually gets to find out, he or she is at liberty to request a refund. There are basically two ways to limit the use of stolen cards to make purchases from your dropshipping store. You can do this by offering refunds only to the original card or through the use of anti-fraud tools that block stolen card transactions.

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Having understand why the case of dropshipping returns is constantly on the increase, let’s discuss how to deal with it.

How to Handle Dropshipping Returns and Refund Requests

While it’s important to have an explicitly written refund policy, it’s also important that you bring your humanity into the dropshipping business. Showing a deep concern regarding a customer’s dissatisfaction can help you retain the customer for life. Giving the best customer service experience can help you increase the customer lifetime value in your business.

In order to handle dropshipping returns in a way that won’t ruin your business, you need to be clear on the products that don’t require returns at all. You need to make this clear in your refund and return terms and conditions.

To make the customer fall in love with your brand, send them an email explaining how you are sorry that the products they bought from you didn’t meet their expectations. Then offer to help.

You can offer to help by doing any of the following to make the customer happy:

Give the customer an exclusive coupon code

Customers love being rewarded. When you show them a sign that you appreciate their patronage of your brand, they will buy more. Give your customer a discount code for their next purchase. This is a great way to get them to come back.

Give the customer store credit

The store credit can come in the form of a gift card or a just special type of store credit coupon. Give them store credit for the refund amount, maybe even with something extra. They will love this kind gesture and go any length to become your brand evangelist.

Offer a product upgrade for free

If you have an upgrade available for that product, now is the time to use it to your advantage. Offer the customer the product upgrade and see their face light up in joy.

Free product 

If your customer accepts waiting for the replacement, you could send them an extra product. This could be low-cost for you, but could mean a lot for your customer because they are getting something for free!